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UNCLAS SECTION 01 OF 08 TOKYO 001008 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA; 
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION; 
TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE; 
SECDEF FOR JCS-J-5/JAPAN, 
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA 
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR; 
CINCPAC FLT/PA/ COMNAVFORJAPAN/PA. 
 
E.O. 12958: N/A 
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA
 
SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 04/11/08 
 
 
INDEX: 
 
(1) Japan, U.S. reach basic agreement on seeking arrest of U.S. 
military deserters from municipal and prefectural police (Nikkei) 
 
(2) U.S. military housing construction likely to spark controversy 
in Iwakuni (Asahi) 
 
(3) Editorial: Six-party talks: Do not give in on complete 
declaration of nuclear programs (Tokyo Shimbun) 
 
(4) Politics malfunctioning (Part 4-conclusion) - Interview with 
former Prime Minister Yasuhiro Nakasone: Bitter rivalry between 
party heads essential to break political stalemate (Nikkei) 
 
(5) Discussion of distribution of cloned cows begins in Japan but 
lack of debate over their safety (Sankei) 
 
(6) Will China, "the world's factory," change? (Asahi) 
 
ARTICLES: 
 
(1) Japan, U.S. reach basic agreement on seeking arrest of U.S. 
military deserters from municipal and prefectural police 
 
NIKKEI (Page 19) (Full) 
Eve., April 11, 2008 
 
It was learned today that in the wake of a murder in Yokosuka City, 
Kanagawa Prefecture, by a U.S. military deserter, the Japanese and 
American governments have reached a basic agreement for the U.S. 
side to inform the Japanese side with all information about 
deserters who flee U.S. bases. Foreign Minister Koumura revealed 
this at a press conference after a cabinet meeting.  He said that 
when the information was provided, the U.S. would request the 
prefectural or municipal police in the concerned locality to arrest 
(taihou) the deserter. 
 
According to Foreign Minister Koumura, the plan will be formally 
decided soon at a Japan-U.S. Joint Committee meeting. Under the 
current Status of Forces Agreement (SOFA), there is no obligation on 
the U.S. side to inform the Japanese side information on deserters. 
The suspect who was arrested for the murder of a taxi driver in 
Yokosuka City was a deserter, but the U.S. side never informed the 
Japanese side about the deserter until the incident occurred. 
 
After the incident, Foreign Minister Koumura and U.S. Ambassador to 
Japan Schieffer agreed that the way information was shared about 
deserters should be improved. This measure does not require a 
revision of the SOFA but can be dealt with by improving the SOFA's 
operation. 
 
According to the Foreign Ministry, the U.S. forces consider a 
soldier a deserter when that person leaves his or her unit without 
permission for more than thirty days. It is the same as saying "when 
an individual has been confirmed as no longer under the control of 
the military." For that reason, it is also possible that even though 
the whereabouts of the soldier may be unknown, until the soldier is 
declared a deserter, no report would be sent to the Japanese side. 
 
In criminal cases, even though there is nothing comparable to the 
crime of desertion that exists under the special criminal law that 
 
TOKYO 00001008  002 OF 008 
 
 
accompanies the implementation of the Japan-U.S. SOFA, if there is a 
request from the U.S. side to arrest (the deserter), there are 
provisions allowing the Japanese side to arrest the individual if 
the U.S. requests such. 
 
(2) U.S. military housing construction likely to spark controversy 
in Iwakuni 
 
ASAHI (Page 5) (Abridged) 
April 10, 2008 
 
There is another problem cropping up in Yamaguchi Prefecture's 
Iwakuni City, which hosts the U.S. Marine Corps' Iwakuni Air 
Station. The government is looking into the possibility of building 
quarters for Iwakuni-based U.S. military personnel on a flattened 
basin in the city's hillside part. Meanwhile, the waterfront Iwakuni 
base is now being extended to an offshore landfill reclaimed from 
the sea. Yamaguchi Prefecture and Iwakuni City developed the 
hillside area to use dirt there for the offshore extended landfill 
and planned to prepare large-scale residential sites in that area. 
However, this project failed. Instead, the developed land is now 
being considered for U.S. military housing. The city is now in the 
economic doldrums, while the Iwakuni base's buildup is going on. 
What lies behind this is the Iwakuni base's presence that has edged 
out the local business community and fettered the local economy. 
 
The Iwakuni base's offshore extension is to be completed by the end 
of fiscal 2008. After that, the Iwakuni base will be markedly 
reinforced with a wing of 59 carrier-borne fighter jets to be 
relocated from the U.S. Navy's Atsugi base in Kanagawa Prefecture. 
As if to overlap this timetable, the housing construction plan for 
U.S. military personnel came up. 
 
The most likely candidate site for the prospective construction of 
housing for U.S. military personnel is in Atagoyama, a hillside area 
across the JR Sanyo line and on the opposite side of the Iwakuni 
base. Dirt was gathered there for the base-contiguous landfill. 
Yamaguchi Prefecture and Iwakuni City once planned a joint venture 
project for housing developments. However, the plan hit a setback 
due to the infeasibility of local demand for housing. As a result, 
the prefecture and the city are now saddled with a total debt of 
25.1 billion yen. Atagoyama has flatlands covering a total area of 
60 hectares. Iwakuni City decided to sell 45 hectares to the 
government. The Defense Ministry says this Atagoyama area is "a 
likely candidate site for U.S. military housing." 
 
Many of the local communities near Atagoyama were opposed to that 
move. Jungen Tamura, a member of Iwakuni City's municipal assembly, 
lives near Atagoyama. "The government might have expected the 
housing development project's setback," Tamura said. Former Iwakuni 
Mayor Katsusuke Ihara, who was defeated in this February's mayoral 
election, says there would be a "big campaign" against the housing 
construction plan. 
 
In February, a group of local residents instituted a class action 
lawsuit for a court injunction to revoke the Yamaguchi governor's 
approval of the Iwakuni base's offshore extension. One of the 
plaintiffs, Toshio Fujikawa, 60, was an engineer of the 
Iwakuni-based Teijin group. "We can't forgive the government's foul 
play." So saying, Fujikawa voiced his anger. 
 
The offshore extension project was originally intended to avoid the 
 
TOKYO 00001008  003 OF 008 
 
 
risk of aircraft crashes and also to abate the noise of aircraft. It 
was an "earnest wish" of the city's local communities. According to 
former Iwakuni Mayor Yoshimitsu Kifune, the base's landed portion, 
which is equivalent to the offshore landfill, was to have been 
returned to the city. 
 
In 1996, Yamaguchi Prefecture approved the government's proposal of 
offshore reclamation for the Iwakuni base's offshore extension. The 
government disbursed 240 billion yen. The offshore reclamation site, 
currently covering an area of 574 hectares, will be enlarged with an 
additional landfill of 213 hectares. However, the government will 
return only 5 hectares. "There will be more new facilities," a 
senior official of the Defense Ministry said. The government is also 
planning to construct a large berth with a depth of 13 meters for 
battleships. The earnest wish of local people has been ignored. 
Fujikawa and other local residents therefore went to court. 
 
(3) Editorial: Six-party talks: Do not give in on complete 
declaration of nuclear programs 
 
TOKYO SHIMBUN (Page 5) (Full) 
April 11, 2008 
 
There have been some new developments in the six-party talks on the 
North Korean nuclear issue. A declaration of all nuclear programs 
means no omissions. Japan, the United States, and South Korea must 
step up their cooperative relations so as not to create problems for 
the future. 
 
Following U.S.-DPRK talks in Singapore, delegates to the six-party 
talks met in Beijing. There, the U.S. delegate simply reported that 
"there are many things that must be done before reaching a final 
settlement" on the question of presenting a declaration of nuclear 
programs, now in focus. 
 
It has been six months since the six-party members reached an 
agreement on the second-phase actions for the denuclearization of 
North Korea. North Korea was supposed to disable the Yongbyon 
nuclear facility and declare all its nuclear programs by the end of 
¶2007. 
 
The disablement is in progress, albeit slow. Pyongyang has yet to 
make a declaration, which holds the key to the denuclearization of 
North Korea. It is more than three months overdue. 
 
As a party to the agreement, the North must fulfill its 
responsibility. Pyongyang must deliver on its promise at the 
earliest possible time. 
 
In the U.S.-DPRK talks, the two countries seem to have agreed to 
produce an unofficial document specifying the North's uranium 
enrichment program and its nuclear cooperation with Syria. 
 
The amount of plutonium held by North Korea is one of the 
differences (in claims between North Korea and the United States). 
The North has reportedly admitted storing only two-thirds of what 
the United States estimates. A concession must not be made easily in 
this area. 
 
Under the agreement reached last November, the North is required to 
present a "full, complete and correct" declaration of its nuclear 
programs. 
 
TOKYO 00001008  004 OF 008 
 
 
 
At the same time, as a result of the Singapore meeting, the North 
has also reportedly agreed on a political compensatory measure by 
the United States and a declaration of its nuclear programs. A 
compensatory measure seems to imply delisting the North as a state 
sponsor of terrorism. 
 
True, the delisting is specified in the agreement, though as a step 
in normalizing relations between the United States and North Korea. 
The Japanese government has repeatedly asked the United States to 
handle the matter carefully until the abduction issue is settled. We 
hope the United States will keep that in mind. 
 
Further, the working group on normalizing Japan-DPRK relations has 
not met since last September. The government will decide at a 
cabinet meeting today to extend its economic sanctions against the 
North for another six months. Given slow progress on the nuclear and 
abduction issues, such a step seems only natural. 
 
To break the gridlock, close cooperation between Japan, the United 
States and South Korea, as well as China, is indispensable. 
 
Fortunately, in South Korea's parliamentary elections, the ruling 
party led by President Lee Myung Bak, who advocates a pragmatic and 
reciprocity approach toward North Korea, has won a majority. 
Starting next week, President Lee is also scheduled to visit Japan 
and the United States to hold summit talks. It will be a golden 
opportunity to rebuild cooperative relations. 
 
(4) Politics malfunctioning (Part 4-conclusion) - Interview with 
former Prime Minister Yasuhiro Nakasone: Bitter rivalry between 
party heads essential to break political stalemate 
 
NIKKEI (Page 1) (Slightly abridged) 
April 11, 2008 
 
-- It has become a problem that nothing is being decided in the 
divided Diet. 
 
Nakasone: Prime Minister Fukuda may be an introvert. He is a person 
who tries to keep driving safely. He lacks aggressiveness and is 
slow to take action, for he prefers the status quo. It is often the 
case that any cabinet whose approval ratings fall to the 20 PERCENT 
level will resign within one year according to precedent. The 
question is how he will recover from this situation. 
 
(The major opposition Democratic Party's (DPJ) President) Ichiro 
Ozawa has yet to focus on what he should focus on. The government 
failed to promptly cope with the nomination of a Bank of Japan (BOJ) 
governor, the refueling service to the U.S. forces in the Indian 
Ocean, and the collision of a Self-Defense Forces (SDF) vessel and a 
fishing boat, but what Mr. Ozawa did in dealing with them was no 
more than simply denouncing the government. He was unable to come up 
with a clear goal and an ideal and show them to the public. 
Certainly, there is a problem about the ruling Liberal Democratic 
Party (LDP), but the DPJ's response to the government has also 
caused politics to be adrift. 
 
Fierce battle likely to come after G-8 Summit 
 
-- What do you think is a good idea to break the political impasse? 
 
 
TOKYO 00001008  005 OF 008 
 
 
Nakasone: I presume the primary reason for it stems from the 
character of the heads of the LDP and the DPJ. The DPJ leader tends 
to be self-righteous and favor solitude, so it would be difficult 
for him to organize a coalition among the opposition parties. 
Meanwhile, the LDP leader is quiet and inward-looking. The heads of 
the parties need to engage in rivalry in order for them to shift to 
a two-party system. 
 
-- There are no signs, however, of someone emerging to replace the 
two in either party. 
 
Nakasone: The LDP wants to keep its current two-thirds majority in 
the Lower House, so it is unlikely that the party will make a move 
to dissolve the Lower House even after the G-8 Toyako Summit. 
Meanwhile, I think Mr. Ozawa can't attack (the Fukuda 
administration) in a blunt manner before the G-8 Summit, for the 
summit greatly concerns the state's honor. I think this has in a way 
helped the Fukuda administration. If the administration makes a 
political misstep, that could lead to calls for a resignation of the 
Fukuda cabinet growing in the LDP. I wonder whether the Fukuda 
cabinet is the one that will make a serious blunder. 
 
-- It seems necessary to consider measures to resolve the current 
divided Diet by forming a partial coalition before the next Lower 
House election. 
 
Nakasone: Mr. Ozawa's term of office as president of the DPJ is to 
expire in one year. He is less likely to move to form a cabinet in 
cooperation with the LDP unless he thinks doing so will be very 
advantageous for his party. Meanwhile, the LDP can't easily move to 
do so, given the question of whom it will endorse as candidates. 
Given these things, the current lopsided Diet will not be resolved 
so easily. After the G-8 Summit, the political situation in Japan is 
likely to head for a dissolution of the Lower House in one year. 
 
Good opportunity for diplomacy now lost 
 
-- The dysfunction in politics is greatly affecting diplomacy. 
 
Nakasone: Japan has been placed in a good environment on the 
diplomatic front, for China and South Korea have turned their 
previous policies toward Japan around and have now become friendly 
to Japan. On the part of Japan, it's high time to positively 
collaborate with them to deal with economic and security issues in 
East Asia. But Japan lacks policy. It seems to me that Japan in this 
sense has lost a very good opportunity. This has led to lowering 
Japan's international status. Seeing America's response to Japan, I 
even feel that the United States has been losing enthusiasm toward 
Japan. 
 
Commentary 
 
Hiroyuki Akita 
 
Why has politics become dysfunctional? Is this an unavoidable 
phenomenon under the divided Diet? Or is it attributable to the 
leaders' inability to overcome the current situation? Nakasone takes 
the latter view. In the interview, Nakasone repeatedly took a 
critical view of Fukuda's and Ozawa's insufficient leadership 
capabilities. 
 
It may be time to stop blaming the divided Diet for its failure to 
 
TOKYO 00001008  006 OF 008 
 
 
decide anything. It is true that the divided Diet shackles debate on 
bills, but if the prime minister is bold enough to demonstrate his 
leadership and then the opposition parties, including Ozawa, take a 
broad view, they can keep politics from continuing to be stalled. 
 
(5) Discussion of distribution of cloned cows begins in Japan but 
lack of debate over their safety 
 
SANKEI (Page 25) (Full) 
April 10, 2008 
 
Shintaro Sugahara 
 
Discussion of domestic distribution of cows cloned from somatic 
cells, which are still in the research phase, and discussion of 
procedures for distribution have begun in Japan, following a series 
of reports confirming the safety of cloned cows released by U.S. 
authorities and European and Japanese research institutions. But 
there are questions left to be resolved, such as the high death 
rates. Many point out the lack of debate on ethical aspects and 
legal steps. Once the Cabinet Office's Food Safety Commission (FSC) 
decides that cloned cows are safe, their distribution for human 
consumption could begin without a full debate. 
 
 ASTERISK    ASTERISK    ASTERISK    ASTERISK    ASTERISK 
 
"The Japanese public is not positive about cloned cows. Their death 
rates are also high." One FSC member made this comment at an FSC 
meeting on April 3. 
 
According to a report by the National Institute of Livestock and 
Grassland Science (NILGS), which is under the supervision of the 
Ministry of Agriculture, Forestry and Fisheries (MAFF), the 
still-birth rate of ordinary cows was 4.6 PERCENT  but that of 
cloned cows was 16.4 PERCENT . The rate of death from disease for 
2-day-old to 150-day-old ordinary cows was 4.3 PERCENT  with that of 
cloned cows 23.5 PERCENT . 
 
The report, however, notes that "the gap seems to shrink 200 days 
after birth", and concludes that "there was no biological 
difference." The report cites one of the causes of death as a 
breathing disorder, but it is unknown why such a disorder arises. 
 
"Why can it confirm the safety even if it is unable to grasp the 
reasons." This concern was voiced by Hiroko Mizuhara, secretary 
general of the consumer organization Food Safety Citizens' Watch 
(FSCW). 
 
After discussion of cloned animals at the government's Council for 
Science and Technology Policy in 1997, Japan decided to study cloned 
animals on the grounds that studying cloned animals is of great 
significance, that doing so does not directly concern ethical 
questions involving human beings, and that Japan will promote such 
studies appropriately. 
 
Meanwhile, however, there is a deep-seated criticism in Japan that 
ethical questions are not discussed in ways understandable to the 
general public. 
 
A small number of cows cloned from embryonic stem cells instead of 
somatic cells are already distributed on the ground that they are 
almost the same as twins, but there was a strong backlash from the 
 
TOKYO 00001008  007 OF 008 
 
 
public when the distribution of such cows came to light. Even 
genetically-modified food meets with "a strong rejection from 
consumers," an importer said. So such food is hardly distributed in 
Japan. 
 
Cloning technology makes it possible to massively "copy" cows of the 
same quality. This means that it makes high-grade wagyu beef, which 
is highly expensive, available to general consumers at low prices. 
 
Livestock farmers, however, are less interested in cloned cows 
because of the expensive cost. MAFF notes that breeding cattle in a 
normal way is less costly at present. 
 
Furthermore, discussion has not been held on such questions as to 
how to label cloned cows when they are distributed. And will it be 
required to show cows cloned from somatic cells or what channels 
will be allowed for their distribution? Meanwhile, because Japan 
lacks any import restrictions on cloned cows, they may come in from 
other countries. Japan now faces the need to discuss measures 
swiftly on how to deal with cloned cows. 
 
(6) Will China, "the world's factory," change? 
 
ASAHI (Page 2) (Excerpts) 
April 11, 2008 
 
The yuan hit the 6 to the dollar line yesterday, breaking 7. The 
value of the Chinese currency has been surging since last fall 
because the People's Bank of China (central bank) has allowed a 
stronger yuan leading to lower import prices, with the aim of 
reducing inflation. The additional factor is the global decline in 
the value of the U.S. dollar. The yuan's rise, which is likely to 
continue for some time, is bound to take a toll on Japanese 
companies with production bases in China. Will China as "the world's 
factory" that has been growing due to exports now change? 
 
Japanese companies shifting production bases for low costs 
 
Since the 1990s, Japanese companies have been providing inexpensive 
products to countries across the world, including the world's 
largest market, the United States, by manufacturing them in China. 
The yuan's further appreciation against the dollar will push up 
prices of products made in China for exports and force Japanese 
companies to review this model. 
 
In the textile industry, domestic production has reportedly been 
replaced largely by Chinese production. A person in charge of a 
major trading firm undertaking production in China for a large 
Japanese apparel maker said: "The yuan's value against the dollar 
has risen nearly 20 PERCENT  since three years ago. To add insult to 
injury, labor costs have also increased 20 PERCENT ." 
 
At present, against the Japanese yen, the yuan is not as strong as 
against the U.S. dollar, so the prices of Japan-bound products are 
less affected. But the weak-dollar-strong-yen trend could change 
anytime. The yuan's appreciation against the yen would elevate 
import prices, thereby affecting Japan significantly. The 
aforementioned person took this view: "It would be difficult for 
apparel makers in Japan to raise prices, and some companies would 
find it difficult to keep up production." 
 
The approach called "China plus one" to secure a production center 
 
TOKYO 00001008  008 OF 008 
 
 
in addition to China in anticipation of risk factors is becoming a 
mainstream tactic. An Itochu Corp. source explained, "Being close to 
the Japanese market, China keeps an advantageous position. Still, 
shifts to Vietnam and Thailand are also underway." For the Western 
markets, production in India is also an option, according to the 
source. 
 
Following the frozen dumpling poisoning case in January, the food 
industry is also reviewing its heavy reliance on China. In February, 
Prima Meat Packers, Ltd. decided to build its first ham and sausage 
factory in 13 years in Thailand. "We have considered factors 
comprehensively, such as rising costs in China and diversifying 
safety risks," a company executive said. 
 
Many electronics companies assemble their products in China. 
Although the yuan's rise adversely affects exports, a Sony 
representative said, "We still don't regard it as a risk factor." 
The reason is because sales in the Chinese market is large and also 
because in many cases, core components to be assembled in China come 
from abroad. But the company is unable to read the yuan's effects in 
the future. 
 
According to the Japan External Trade Organization (JETRO), Japan's 
investment in China peaked in 2005 at 6.53 billion dollars and 
dropped to 3.59 billion dollars in 2007. China and North Asia 
Division Chief Minoru Arahata noted: "There is a possibility that 
the manufacturing industry's method of producing products in China 
for exports will decline while the approach of selling products in 
the Chinese market will gain momentum on the back of the yuan's 
rise." 
 
MESERVE