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UNCLAS SECTION 01 OF 08 TOKYO 001828 
 
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 07/03/08 
 
INDEX: 
 
(1) Nuclear threat to Japan -- Repercussions from Korea's nuclear 
declaration (Part 3 - conclusion): Success of verification 
determined by Six-Party Talks members (Yomiuri) 
 
(2) Interview with Masaharu Kohno, G-8 Sherpa: Pessimistic about an 
agreement on long-term emission-cut goal; Global warming talks may 
retreat (Asahi) 
 
(3) Japanese vacuum pumps found at Yongbyon nuclear facility were 
imported by North Korean trading firm headed by former liaison with 
IAEA inspection team (Yomiuri) 
 
(4) Agriculture minister pledges to set target of achieving food 
self-sufficiency of over 50 PERCENT  at order of premier (Asahi) 
 
(5) Regulatory Reform Council releases interim report: Calls for 
deregulation in seven areas, including medical services and 
agriculture, but driving force for reform wanes (Nikkei) 
 
(6) Interview with former LDP Secretary General Koichi Kato on 
divided Diet (Tokyo Shimbun) 
 
ARTICLES: 
 
(1) Nuclear threat to Japan -- Repercussions from Korea's nuclear 
declaration (Part 3 - conclusion): Success of verification 
determined by Six-Party Talks members 
 
YOMIURI (Page 1) (Full) 
June 30, 2008 
 
The Unites States has obtained North Korea's declaration of its 
nuclear programs in return for its decision to delist Pyongyang as a 
state sponsor of terrorism. The chief negotiators of the Six-Party 
Talks on North Korea's nuclear programs will have to verify whether 
or not the DPRK has lied in its nuclear declaration in their meeting 
expected to take place in early July. According to Secretary of 
States Condoleezza Rice, a group of nuclear experts from the United 
States, China, and Russia, which are all nuclear powers, will visit 
North Korea to verify the declaration by conducting spot inspections 
at the nuclear facilities and interviewing North Korean nuclear 
experts. 
 
The initial focus is on the amount of plutonium North Korea has 
produced. The DPRK has reportedly declared that about 30 kilograms 
of plutonium was produced. It has said that the 30 kg of plutonium 
was produced in 1992, 203 and 2005. The U.S. estimate is about 45 
kg. There is a 15 kg difference, which corresponds at least to three 
to four nuclear bombs, between the DPRK's declaration and the U.S. 
estimate. Washington appears to have included in its estimate the 
amount remaining in spent nuclear fuel rods and that disposed of 
during the process of reprocessing spent nuclear fuel rods, besides 
the amount Pyongyang wrote in its nuclear declaration. The U.S. 
administration therefore intends to carry out thorough investigation 
into from waste storage facilities to plumbing. 
 
However, it is uncertain how far North Korea will cooperate with the 
investigation, which will take several months at least. 
 
Secretary Rice stated: "If Pyongyang's cooperation is insufficient, 
 
TOKYO 00001828  002 OF 008 
 
 
the United States will resume sanctions and apply more sanctions." 
She even referred to the possibility of Washington cancelling its 
decision to remove the DPRK from its terrorist blacklist before the 
delisting is implemented on August 11. Larry Niksch, an expert at 
the Congressional Research Service (CRS), said however: "If 
sanctions are imposed, North Korea will withdraw from the 
negotiating table. So it will be impossible for the U.S. to make 
such a decision." 
 
After the accuracy of the declaration is confirmed thorough the 
verification, the process of disabling North Korea's nuclear 
facilities, the most challenging part, will finally start. The 
declaration, however, does not include how many nuclear weapons 
North Korea has and where it stores them. It is certain that 
Pyongyang will demand the provision of light-water reactors, in 
addition to energy assistance. The reason is that even though the 
building of two light-water reactors was promised in the framework 
of the 1994 U.S.-North Korea Agreement in return for the DPRK 
abandoning its nuclear development program, the construction of 
light-water reactors was cancelled because the agreement was 
nullified. 
 
There is a possibility that Japan, which took part in the 
construction of  light-water reactors along with the United States 
and South Korea, will be strongly urged to bear a commensurate 
burden if debate on whether to provide light-water reactors to North 
Korea starts moving on a full-scale. 
 
Meanwhile, North Korea neither considers the Six-Party Talks "an 
arena for negotiations on nuclear disarmament nor is it regarded 
abandoning nuclear weapons as a precondition. Therefore, the more 
negotiations go into the final stage, the more gaps will widen 
between North Korea and the five other members of the Six-Party 
Talks on denuclearization of North Korea. 
 
Sung Kim, director of the Office of Korean Affairs of the U.S. 
Department of State, said that the Bush administration, which is in 
office until next January, "has not enough time to complete the 
entire process" during its tenure. Although the Six-Party Talks will 
enter a new stage, it has become increasingly difficult to drive 
Pyongyang to disable its nuclear weapons in the limited time left. 
 
(2) Interview with Masaharu Kohno, G-8 Sherpa: Pessimistic about an 
agreement on long-term emission-cut goal; Global warming talks may 
retreat 
 
ASAHI (Page 7) (Full) 
July 3, 2008 
 
Foreign Ministry's Deputy Minister Masaharu Kohno, who will serve as 
Sherpa of Japan at the Lake Toya Summit to open in Hokkaido on July 
7, responded to an interview with the Asahi Shimbun yesterday. On 
the controversial issue of global warming, he stated: "Negotiations 
on a certain challenge might retreat from the situation of last 
year," indicating that negotiations on signing an agreement on a 
long-term global goal to reduce greenhouse gas emissions are 
proceeding with difficulty. 
 
In the Group of Eight (G-8) Summit last year in Germany, the G-8 
leaders agreed to earnestly look into the long-term goal of halving 
greenhouse gas emissions by 2050. The focus of attention is on 
whether an agreement will be reached on this goal at the Lake Toya 
 
TOKYO 00001828  003 OF 008 
 
 
Summit. 
 
But in a meeting held in preparation for the Conference of Major 
Greenhouse Gas Emitters by 16 state leaders on the last day of the 
Summit, the participants failed to come up with a shared numerical 
target. Since the U.S. was saying that an agreement at the G-8 
Summit alone will be ineffective, attention was being paid to what 
moves the U.S. would make. 
 
Kohno said: "An agreement on a long-term goal must be reached 
without fail," but he added: "With their stances remaining apart, 
there are wide discrepancies." He said: "No there is no nation that 
suggests the preparatory work be stopped. There should be leeway to 
create something," emphasizing that the countries will continue 
efforts to find common ground. 
 
Kohno indicated a pessimistic view about the possibility of an 
agreement on the mid-term goal set forth by Prime Minister Fukuda to 
have the growth of global greenhouse gas emissions peak out in the 
next 10 to 20 years, saying: "There is still far to go before an 
agreement is reached." On the Japan-proposed sector-specific 
approach to determine potential reduction volumes in each industry, 
he remarked: "There certainly is a gradually growing awareness that 
this approach is important." It is expected that a declaration to be 
issued at the G-8 Summit will specify the sector-specific approach 
as "useful." 
 
On the issue of soaring food prices, the G-8 leaders will adopt an 
independent special document. The document will specify long-term 
assistance measures, for instance, to improve developing countries' 
productivity. Kohno said: "It will be possible to compile arguments 
into a report with a strong message." The special document is also 
expected to urge food exporters to eliminate and relax export 
restrictions and to stress the need to promote the development of 
second generation biofuel technologies. 
 
Concerning skyrocketing oil prices, Kohno stated: "We will send out 
a message expressing a sense of crisis about the current situation." 
The declaration by the G8 leaders will present measures to make the 
oil market more transparent, but it is unlikely to refer to 
restrictions on investment money. Kohno said: "It will be difficult 
to find common terms on the issue." 
 
Some countries have suggested that such emerging countries as China 
and India should be included in the Summit framework, but Kohno 
indicated a negative view, remarking: "The current G-8 framework is 
the most appropriate forum for the world's major industrialized 
countries." 
 
Statements by Kohno 
 
 Summary 
 
Recent sharp rises in oil and food prices, both closely connected 
with each other, and climate change are taking place simultaneously. 
The G-8 countries must show measures and a political will to deal 
with these issues, serving as a driving force to move the world 
forward. Although (an agreement) might be a mirage, we are 
conducting discussions from various angles in an effort to find 
common ground. The G-8 leaders are climbing the last steep slope, 
holding hands in a line. If they lose their holds, everything will 
be thrown out. They are still holding hands. 
 
TOKYO 00001828  004 OF 008 
 
 
 
 Global warming 
 
It is important for us to show a low-carbon society vision and 
discuss a roadmap for this initiative. Progress has been made to a 
considerable extent since the German Summit last year, but 
negotiations on some tasks might retreat. We are making utmost 
efforts to bridge the gap up until the last minute. 
 
 Soaring food prices 
 
We would like to build common perceptions on the stability of food 
supplies and improvement in productivity, export restrictions, as 
well as biofuel technologies. Russia has lifted export restriction 
since July 1, so the G-8 countries are now fall in step with each 
other on the policy of eliminating and easing export restrictions. 
The countries will find it easier to share a common perception on 
the development of next generation biofuels. Regarding current 
biofuels (because such products threaten food supplies), countries 
have different positions. 
 
 Rising oil prices 
 
We will deliver a strong message. It is imperative to improve 
transparency in the oil market and to avoid a murky flow of money. 
The G-8 should not intervene in the market. 
 
(3) Japanese vacuum pumps found at Yongbyon nuclear facility were 
imported by North Korean trading firm headed by former liaison with 
IAEA inspection team 
 
YOMIURI (Page 1) (Full) 
July 3, 2008 
 
Japanese-made vacuum pumps were found at a North Korean nuclear 
facility during an International Atomic Energy Agency (IAEA) 
inspection (in 2007). It has been found through Kanagawa police 
investigations that those pumps were first exported to Taiwan and 
then shipped to a trading company in North Korea headed by a person 
who served as the liaison with the IAEA inspection team. It has also 
come to light through investigations in Germany that the trading 
company in question bought devices that could be used at nuclear 
facilities from a German company and that it exported them to Syria. 
It has become clear that North Korea has been procuring WMD 
components through the company closely connected with Pyongyang. 
 
According to a senior investigator, the company in question is Nam 
Chongang Trading (TN: phonetic) in Pyongyang. The company is 
reportedly headed by a former diplomat who served as the North 
Korean point of contact with the IAEA for its inspection of nuclear 
facilities at Yongbyon. 
 
The Kanagawa prefectural police yesterday sent to the Yokohama 
District Public Prosecutors Office papers on the 66-year-old 
president of Nakano Corp., a trade agent of Minato Ward, Tokyo, on 
suspicion that the company exported eight items, including the 
vacuum pumps, that might be used in developing nuclear weapons, 
without the economy, trade and industry minister's permission in 
violation of the Foreign Exchange and Foreign Trade Control Law. The 
pumps were first exported to Trans Merits Co., a trading firm in 
Taipei, in July 2003. They were found at a plutonium-reprocessing 
facility at Yongbyon during the IAEA inspection in the spring of 
 
TOKYO 00001828  005 OF 008 
 
 
¶2007. 
 
(4) Agriculture minister pledges to set target of achieving food 
self-sufficiency of over 50 PERCENT  at order of premier 
 
ASAHI (Page 7) (Full) 
July 3, 2008 
 
Prime Minister Fukuda on July 2 met with Agriculture Minister 
Wakabayashi at the Kantei and ordered him to look into specific 
measures to raise Japan's food self-sufficiency, which now stands at 
39 PERCENT . Wakabayashi replied, "I will map out a set of measures 
with the target rate set at over 50 PERCENT ." The prime minister 
appears to be aimed at indicating a stance of tackling to improve 
food self-sufficiency with the Lake Toya G-8 summit in Hokkaido, 
where the food issue will become a main item on the agenda, close at 
hand. 
 
According to Wakabayashi, the prime minister urged him to make 
efforts to boost food self-sufficiency, noting, "Where does the 
blame for the decline of self-sufficiency to 39 PERCENT  lie? Are 
there measures to raise the rate?" 
 
(5) Regulatory Reform Council releases interim report: Calls for 
deregulation in seven areas, including medical services and 
agriculture, but driving force for reform wanes 
 
NIKKEI (Page 2) (Almost full) 
July 3, 2008 
 
The government's Regulatory Reform Council, chaired by Takao 
Kusakari, chairman of Nippon Yusen Kabushiki Kaisha (NYK Line), 
released on July 2 an interim report on the third set of 
recommendations to be finalized at year's end. The report lists 
issues up for consideration in seven areas, including the medical 
services and agricultural areas. Consultations on those issues with 
concerned government agencies are now expected. Moves to strengthen 
regulations are gaining ground in the employment and environment 
areas. It is viewed that Prime Minister Fukuda, who advocates 
promoting a consumer-driven administration, is cautious about 
further deregulation. There has been a clear decline in the panel's 
ability to promote reform. 
 
Chairman Kusakari emphatically told reporters after the meeting: 
"Talks will not progress unless government officials have awareness 
that it is necessary to boost growth through regulatory reform. The 
panel is pinning its hopes on the prime minister's leadership." The 
showcase of the interim report is that it gives priority to such 
viewpoints as a better quality of life and the revitalization of 
regional areas. Regarding the child-care area, the report proposes 
establishing child-care centers in a flexible way as part of 
measures to address the declining birthrate, by revising the 
existing minimum standards for the establishment of such. 
 
For the reform of the tightly-regulated agricultural area, the 
report proposes a broad-based plan aimed at revitalizing rural areas 
and improving food self-sufficiency. Calls for revising the policy 
of reducing the amount of land devoted to rice cultivation are 
growing. In response, the report proposes establishing a market 
where farmers can trade production quotas, based on the presumption 
that the rice-acreage reduction policy should be abolished in the 
future, as Acting Chairman Hatta has said. The panel wishes to 
 
TOKYO 00001828  006 OF 008 
 
 
promote new entries into the agricultural sector by scrapping 
restrictions on the use of farmland, with the aim of putting an end 
to the perennial lack of young farmers to work in the fields when 
their elders retire. 
 
However, all the proposals included in the interim report are ones 
that the panel has failed to put into practice. The prevailing view 
among government officials is that the panel has run out of 
proposals, as one government source put it. The economic logic that 
deregulation is growth has vanished from the report. There is 
instead a stronger element of a wavering of the structural reform 
line that has been in place since the Koizumi administration. 
 
The Transport Ministry has started looking into reviving a 
regulation on supply and demand adjustment, which was abolished in 
2002, to address the issue of the oversupply of taxis. The ruling 
parties are planning to place a ban on the dispatch of day workers, 
as such a system is considered to be contributing to the growth of a 
working- poor population. 
 
Major points of interim report compiled by Regulatory Reform 
Council 
 
Measures on social security, declining birthrate 
? Medical services: The government will take a second look at the 
enrollment limit of medical departments at universities 
? Social welfare, child-care, nursing care: Establish child-care 
centers, according to a situation in each area 
 
Agriculture, forestry, fisheries and areas for those industries 
? Agriculture, forestry and fisheries: Scrap a regulation on the use 
of farm land; Establish a nationwide market for trading rice 
production quotas. 
 
Basis for human life 
? Anti-monopoly policy: Unify sanctions against violations of the 
Antimonopoly Law into an administrative surcharge system 
 
Improvement of international competitiveness 
? Transport: Disclose payments balance of each airport for the 
purpose of privatizing airports and introducing a self-support 
accounting system to them; introduce free competition to the taxi 
business 
 
Social infrastructure 
? Labor: Easing conditions for the application of employment 
insurance 
 
(6) Interview with former LDP Secretary General Koichi Kato on 
divided Diet 
 
TOKYO SHIMBUN (Page 2) (Abridged slightly) 
July 3, 2008 
 
-- You have indicated that political realignment is inevitable. 
 
"I think political realignment will occur in two stages. First, the 
Liberal Democratic Party will become the largest party in the 
parliament after the next Lower House election. Next, another 
political realignment will occur in order to eliminate the 
lopsidedness in the parliament based on principle." 
 
 
TOKYO 00001828  007 OF 008 
 
 
-- What is the key principle that will trigger realignment? 
 
"The question is no longer about socialism or anti-socialism. It's 
about market principles or liberalism and whether to put high 
priority on Asia diplomacy. There are similarities between being 
liberal and attaching importance to Asia diplomacy. This can be a 
definite factor." 
 
-- What is the definition of liberalism? 
 
"In my view, liberalism is not economic rationalism based on market 
fundamentalism but political thought to revive political functions 
to restore humanness. Simply put, it's about the heart." 
 
-- Is the revival of political functions oriented toward a big 
government? 
 
"The government could be somewhat big in size as long as it is 
equipped with proper political functions and can build a society in 
which people can afford to think of others. We cannot leave 
everything to the private sector. I want to remake Japan into a 
people-oriented, community-based country." 
 
-- Do you think the LDP will be able to remain the leading party 
after the next Lower House election? 
 
"If this situation persists, that's difficult" 
 
-- Why is that? 
 
"People were unhappy with market-oriented politics that lasted six 
years under the Koizumi and Abe administrations. They expected 
people-oriented politics under Prime Minister Yasuo Fukuda that is 
distinct from the Koizumi policy course. But the divided Diet has 
prevented him from exhibiting his own policy imprint." 
 
-- Some think they cannot fight the next Lower House election under 
Prime Minister Fukuda. 
 
"It would be meaningless just to change the front page; the contents 
should also be changed. Prime Minister Fukuda should shuffle his 
cabinet in order to display his policy imprint. If he can put an end 
to the Koizumi policy course, he can quite possibly enjoy high 
popularity." 
 
-- What should be done specifically? 
 
"He should review the healthcare system for people 75 and older and 
promote environmental measures in order to prove that he is 
different from Mr. Koizumi. Further, in order for the LDP to retain 
its dominant political position, the prime minister should also put 
off dissolving the Lower House for a snap general election until the 
Lower House members' term expires next year." 
 
-- Are you going to aim at bringing LDP and DPJ liberal forces 
together after the Lower House election? 
 
"Political realignment will not proceed dynamically unless the two 
sides need each other. If the DPJ, which controls the Upper House, 
has a majority in the lower chamber as well, it will no longer need 
the LDP." 
 
 
TOKYO 00001828  008 OF 008 
 
 
-- You held a meeting with former Prime Minister Yoshiro Mori the 
other day. 
 
"I offered an apology for my attempt eight years ago to vote for a 
no-confidence motion against the then Mori cabinet. I also told Mr. 
Mori that I will firmly support Prime Minister Fukuda." 
 
-- In the party, there are active moves by some to become candidates 
to replace Prime Minister Fukuda. 
 
"People are free to express their views, but we must remain united 
and pull through this critical situation; otherwise (we will not be 
able to remain as the leading party) and become unnecessary in 
political realignment." 
 
(Interviewed by Yuji Shinogase) 
 
SCHIEFFER