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UNCLAS SECTION 01 OF 09 TOKYO 001934 
 
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 07/11/08 
 
INDEX: 
 
(1) Six-party talks resumed: U.S. hurries toward final phase, North 
Korea the on offensive (Asahi) 
 
(2) Lake Toya Summit closes: Hopes pinned on Japan's environmental 
technology (Nikkei) 
 
(3) Future of this planet (Part 2): G-8 nations indicate no resolve 
to share "pain" expected through solution of issues (Tokyo Shimbun) 
 
(4) Prime Minister Fukuda mulling cabinet shuffle (Mainichi) 
(5) Chief Cabinet Secretary Machimura: Decision on dispatch of GSDF 
to Afghan by the end of August (Mainichi) 
 
(6) No need to revise SOFA: Maher (Ryukyu Shimpo) 
 
(7) Gov't begins to provide info about U.S. military fugitives 
(Ryukyu Shimpo) 
 
(8) Interview with Hiroyuki Sonoda, deputy chairman of LDP Policy 
Research Council: Expand domestic demand by compiling second budget 
(Nikkei) 
 
ARTICLES: 
 
(1) Six-party talks resumed: U.S. hurries toward final phase, North 
Korea the on offensive 
 
ASAHI (Page 4) (Abridged slightly) 
July 11, 2008 
 
Satoshi Ukai, Yoshihiro Makino, Toru Tamagawa, Beijing 
 
The United States is hurrying toward the final phase of 
denuclearization, North Korea, having presented a declaration of its 
nuclear programs and activities, is on the offensive, while Japan 
finds it difficult to take action in the wake of the United States' 
decision to delist the North as a state sponsor of terrorism. 
Against such a backdrop, the six-party talks resumed on July 10 
after a nine-month hiatus. 
 
The main topic on the agenda is how to verify North Korea's 
declaration of its nuclear programs. Since arriving in Beijing on 
July 8, U.S. Assistant Secretary of State Christopher Hill has 
repeatedly met with his North Korean counterpart, Vice-Foreign 
Minister Kim Kye Gwan, and vigorously carried out the necessary 
spadework regarding the agreed-upon onsite inspections of nuclear 
facilities and interviews with persons concerned in North Korea. 
 
The administration of President George W. Bush desperately wants to 
achieve results before he leaves office next January by reaching a 
six-party agreement on how to verify the North's long-overdue 
nuclear declaration. Washington's wishes were apparently strong 
enough to brush aside Japan's reluctance to resume the six-party 
talks early in connection with the Lake Toya summit and to strike a 
deal to resume the talks on July 10. 
 
Responding positively to talks with Hill, Vice Foreign Minister Kim 
has acted as though he had aligned himself with the United States. 
According to the source, when Vice Minister Kim met with South 
Korean delegate and special representative for Korean Peninsula 
 
TOKYO 00001934  002 OF 009 
 
 
peace Kim Sook, the chief North Korean negotiator expressed a 
willingness to cooperate in the verification process. The source 
also presented an optimistic outlook, saying, "I felt a positive 
reaction." 
 
North Korea's proactive stance comes from Pyongyang's craving for 
economic and energy aid. The North is supposed to receive aid 
equivalent to 950,000 tons of heavy fuel oil in the second phase of 
denuclearization, but things have not gone as planned. 
 
A South Korean government source thinks that with the Bush 
administration approaching its end, the North will make any move to 
grab whatever is available. 
 
The Korean Central News Agency applied pressure on Washington on 
July 10 by saying in its commentary that the United States must 
fulfill its obligations. The North Korean Foreign Ministry also 
released a press statement on July 4 urging the six-party members to 
fulfill their duties first. On July 10, A/S Hill implied a plan to 
present a specific aid timetable to the North and seek its 
understanding, saying, "North Korea wants to know the contents of 
the aid program." 
 
Japan under pressure 
 
Japan feels pressure from the stances of the United States and North 
Korea. Foreign Ministry Asian and Oceanian Affairs Bureau 
Director-General Akitaka Saiki had to sit at the six-party table on 
July 10 after briefly exchanging notes with his U.S. and South 
Korean counterparts following his arrival in Beijing earlier in the 
day. 
 
Setting the highest hurdle among the participants is Japan's basic 
policy. Saiki in the meeting pointed out the absence of information 
on nuclear weapons from the North's declaration, while underlining 
the need to establish a verification framework including Japan and 
participation by the International Atomic Energy Agency (IAEA). 
 
Other countries might also express discontent with Japan, which has 
not supplied energy aid to the North. Saiki again emphasized Japan's 
standpoint that it will not take part in aid unless there is 
progress on the abduction issue. The United States and South Korea 
have informally presented the idea of temporarily extending aid to 
the North in place of Japan. But some countries are balking at the 
idea, saying that it would turn the six-party framework into a mere 
shell, according to the negotiations source. The reality is that 
Japan has to continue insisting that the six-party members must 
purse the denuclearization and abduction issues simultaneously. 
Japan wants to continue working closely with the United States based 
on President Bush's statement that the abduction issue must be 
addressed under the six-party framework. 
 
(2) Lake Toya Summit closes: Hopes pinned on Japan's environmental 
technology 
 
MAINICHI (Page 11) (Excerpts) 
July 10, 2008 
 
Leaders from the Group of Eight (G-8) nations at the Lake Toya 
Summit agreed to share a long-term target to halve greenhouse gas 
emissions by 2050. The phrase, "The G-8 nations will cooperate for 
the development and dissemination of environmental technology," was 
 
TOKYO 00001934  003 OF 009 
 
 
incorporated in the G-8 statement. Environmental technology is the 
forte of Japan, which has thoroughly promoted energy conservation. 
Voices pinning hopes on Japan's technology are now beginning to be 
heard. Japan will likely be pressed to strengthen joint efforts 
between the government and the private sector in such areas as the 
development of new energies, with the aim of achieving the emissions 
reduction goal. 
 
U.S. President Bush during a press conference held at the White 
House on July 2 expressed expectations of Japan's environmental 
technology, "I am sure the time will come in the near future when 
electric cars will become widely available thanks to Japanese 
technology." 
 
The Japanese government has underscored from way back that technical 
innovation is important in order to curb global warming. Japan in 
May last year incorporated the development of innovative 
technologies in the plan called Cool Earth 50, as proposed by Prime 
Minister Shinzo Abe. The aim was to cut greenhouse gas emissions by 
50 PERCENT  by 2050. However, the Heiligendamm Summit, held right 
after that proposal was made, adopted in its statement abstract 
words "technology is the key to curb climate change." As such, the 
international community did not pay much attention to environmental 
technology. 
 
However, environmental technology is now drawing increasing 
attention due to the steep rise in crude oil prices since last fall. 
Prime Minister Yasuo Fukuda at the World Economic Forum Forum's 
Annual Meeting in Davos in January this year revealed a plan to 
invest about 30 billion dollars (approximately 3.2 trillion yen) for 
R&D in the environment and energy fields over the next five years. 
 
The Ministry of Economy, Trade and Industry (METI) in March this 
year mapped out the Cool Earth - Energy and Innovative Technology 
Plan, which selected 21 technologies, including electric cars, solar 
energy generation and next-generation-type nuclear power generation 
and indicated an implementation road map up to 2050. 
 
The G-8 statement on the environment this time incorporated words 
"in order to map out a road map for environmental technical 
innovation, an international cooperative system will be created." 
The government wants to display international leadership in setting 
measures against global warming, by achieving technical development 
through cooperation between the private sector and the government, 
based on METI's road map. 
 
Many challenges to tackle before achieving emissions goal 
 
METI has expedited technological development, such as the 
development of new energies, for the purpose of achieving energy 
conservation and cutting greenhouse gas emissions. However, there 
remain many challenges to tackle before achieving the reduction 
target. 
 
Automobiles 
 
The government plans to fully disseminate fuel-cell electric 
vehicles, which are considered to be the ultimate eco-friendly car, 
by the year 2010. Honda Motors has released this type of vehicle on 
a leasing basis. The manufacturing cost per unit is tens of millions 
of yen. The government plans to reduce the cost to produce fuel-cell 
electric vehicles to a level similar to or slightly higher than the 
 
TOKYO 00001934  004 OF 009 
 
 
cost to produce gasoline-engine cars. However, this would require a 
considerable degree of technical innovation, according to a leading 
manufacturer. 
 
The manufacturing cost of electric cars is relatively low. Marketing 
for electric cars will start next year or later However, their 
mileage per charge is less than half the gasoline cars. Improving 
the performance of electric cars requires the development of new 
batteries. 
 
Solar power generation 
 
The barrier to the adoption of solar power generation, an 
environment-friendly energy, is the high cost. At present, 
generating 1 kilowatt costs 46 yen, about seven times higher than 
the cost needed for nuclear power to generate the same amount of 
electricity. The government aims at lowering the cost to 14 yen by 
2020 and 7 yen by 2030, the level similar to the cost needed in the 
case of nuclear power generation. Of the solar power generating 
cost, the manufacturing of solar batteries accounts for 60 PERCENT , 
and the cost of building related equipment for 40 PERCENT . 
Manufacturers are making efforts to reduce such costs by reducing 
the amount of silicon, a material used in batteries. However, with 
the price of raw materials soaring, there are no prospects for 
cutting the manufacturing cost. 
 
Nuclear power generation 
 
The government sees nuclear power generation, which does not emit 
carbon dioxide, as the card in adopting measures against global 
warming. Demand for nuclear power generation is on the rise 
throughout the world in the wake of the soaring crude oil prices. 
The government wants to establish small- and medium-size nuclear 
power plants and become able to export such by 2015. It also aims at 
developing a next-generation-type light-water nuclear reactor with 
high energy consumption efficiency by 2030. 
 
Biofuel 
 
The government released a plan to boost the production of biofuel, 
fuel derived from recently harvested plants, from about 30 
kiloliters as of March last year to 50,000 kiloliters by 2011. At 
present, various companies are constructing plants to produce 
bio-ethanol, using rice that is not fit for human consumption. The 
production of bio-ethanol using cellulose materials, such as rice 
straw, which does not affect the food supply, will start next 
summer. An authentication project for the production of bio-ethanol 
using scrap wood has started. However, the project has not yet 
reached the stage for practical application in cost terms. 
 
(3) Future of this planet (Part 2): G-8 nations indicate no resolve 
to share "pain" expected through solution of issues 
 
TOKYO SHIMBUN (Page 1) (Full) 
July 11, 2008 
 
In forming a long-term goal for reducing greenhouse gas emissions at 
the Group of Eight (G-8) Summit (Hokkaido Toyako Summit), it was 
imperative to persuade the U.S. and elicit its agreement. 
 
The U.S. insisted that China, India and other emerging countries 
that are sharply increasing gas emissions should be required to 
 
TOKYO 00001934  005 OF 009 
 
 
commit themselves to attaining a long-term goal. 
 
The challenge of curbing gas emissions may generate business 
opportunities, but at the same time, the challenge could temporarily 
hurt economic activities. China and India are now rivals to the U.S. 
The U.S. could not approve a goal that would leave their greenhouse 
gas emissions unrestricted while affecting adversely only the U.S. 
 
President Bush continued to say: "A long-term goal that does not 
involve China and India would be ineffective," indicating that the 
U.S. did not mind even if an agreement was not reached at the G-8 
summit. 
 
Japan, Britain, and Germany accepted all assertions by the U.S. The 
G-8 nations agreed to note in the leaders' statement that "The task 
(of curbing greenhouse gas emissions) will be implemented for the 
first time if all major economies offer contributions," including 
China and India. The U.S. was satisfied with the agreement, with 
Assistant to the President Daniel Price remarking: "What the 
President said was all reflected in the statement." 
 
The latest summit, however, resulted in underscoring the limits of 
industrialized countries' (now Group of Eight countries (G-8)) 
capability to play a leading role in the international community, 
although they have tried to do so since the first summit was held in 
Rambouillet, France, in 1975. 
 
There undeniably are areas that cannot be coped with only by the G-8 
countries in dealing with climate change and other challenges. 
Consideration must also be given to the historical background of the 
rapid growth of such rising economies as China and India, as well as 
changes in the international community. 
 
But the joint statement stopped short of mentioning what specific 
actions the G-8 nations should take to reduce greenhouse gas 
emissions and instead urged emerging countries and developing 
countries to share the burden and offer cooperation. This shows that 
only the G-8 nations are no longer able to pave the way for 
resolving international issues. 
 
Although calling themselves the leaders of the international 
community, the G-8 nations, which have discharged large volumes of 
greenhouse gases, did not show enthusiasm or determination to take 
the lead in sharing the pain expected from fighting global warming. 
The G-8 summit has long been pointed out as turning into a mere 
formality affair, but this was clearly proved true in the Toyako 
Summit. 
 
Attention was focused on a call for expanding the G-8 framework. 
Setting aside the propriety of the proposal, the U.S., which 
insisted on the involvement of China and India in the regime of a 
long-term goal, is unwilling to include China and India in the list 
of leaders in the international community. Such a stance is rather 
odd. 
 
(4) Prime Minister Fukuda mulling cabinet shuffle 
 
NIKKEI (Page 2) (Slightly abridged) 
July 11, 2008 
 
With the closing of the Group of Eight (G8) summit, Prime Minister 
Yasuo Fukuda has begun to seriously consider whether to shuffle his 
 
TOKYO 00001934  006 OF 009 
 
 
cabinet. In the past, Prime Minister Junichiro Koizumi took 
advantage of cabinet shuffles on par with his right to dissolve the 
House of Representatives, while Prime Minister Ryutaro Hashimoto 
made his popularity decline by exercising such a right. An impact on 
political management cannot be avoided, 
 
Regardless of whether Fukuda shuffles his cabinet or not, his 
administration is reaching a fork in the road. 
 
Considering that ten months have passed since the inauguration of 
the Fukuda cabinet, which he mostly inherited from the previous 
government of Prime Minister Abe, it is safe to say that Fukuda is 
eager to form his own cabinet. The government plans to come up in 
late this month with a set of five policy measures, including 
measures for the elderly and medical services, and it plans to adopt 
budgetary request guidelines for fiscal 2009 (in August). There is a 
rumor that he may shuffle his cabinet after setting the budgetary 
request guidelines for fiscal 2009. 
 
Fukuda probably expects that a cabinet shuffle would have the effect 
of promoting his policies, in addition to improving the image of his 
cabinet. Chances are that his cabinet approval rates may rise. With 
the completion of his duty as chair of the G-8 summit, Fukuda 
reportedly was surprisingly excited. When he telephoned New Komeito 
leader Akihiro Ota yesterday afternoon, he told him: "I am so glad 
that international leaders left Japan feeling satisfied." Fukuda's 
aides anticipate that the Prime Minister would shuffle his cabinet 
and then seek to turn the situation around in the extraordinary Diet 
session that will follow. 
 
There is a view in the ruling Liberal Democratic Party (LDP) that a 
cabinet shuffle should be put off. Since there is no one in the LDP 
ready to succeed Fukuda, a drive to topple him from his post has 
never built up. This is pertinent to the fact that the Fukuda 
government was formed backed by eight factions in the LDP and that 
Fukuda brought faction leaders into his cabinet. 
 
It is reasonable for Fukuda, who is known as a cautious person, to 
think that in order to maintain his administration's stability, he 
should prevent any move that would accelerate the process of someone 
trying to succeed him. There are some who think that Koizumi and 
Yoshiro Mori referred to the possibility of dissolving the Lower 
House in a bid to put the idea into the mind of Fukuda, whom they 
felt had no intention to do so. 
 
When shuffling the cabinet, Fukuda needs to closely examine 
candidates as to whether they may have done something wrong in the 
past. A person close to Fukuda said: "The only thing we can do is to 
check political funds reports." However, fresh in everyone's memory 
is that Prime Minister Abe resigned just three months after the 2007 
G-8 summit due to his cabinet members' scandals "involving money and 
politics." 
 
If a large part of the cabinet is shuffled, the number of ministers 
subject to examination would increase and a risk of discovering 
misconducts will also boost. To prevent uncontrollable situations as 
many as possible, a minor cabinet shuffle would be good. However, a 
senior LDP member said: "If the cabinet is shuffled, all ministers 
should be replaced. Otherwise, those sacked would wonder why were 
they replaced." 
 
There is also a possibility that Fukuda will avoid a cabinet 
 
TOKYO 00001934  007 OF 009 
 
 
shuffle, calculating the loss and gain. In that case, he will not 
escape a difficult situation. Because Fukuda would lose his grip on 
the party as the view that he may quit his post if he does nothing 
will spread in the party. 
 
Late evening, LDP Secretary General Bunmei Ibuki suggested to 
Fukuda: "It would be better not to hear the views of the parties and 
those concerned." Fukuda reiterated as usual: "It is  still a 
completely clean slate. There is no change in my position." 
 
(5) Chief Cabinet Secretary Machimura: Decision on dispatch of GSDF 
to Afghan by the end of August 
 
MAINICHI ONLINE (Full) 
July 11, 2008 
 
At his press conference this morning, Chief Cabinet Secretary 
Nobutaka Machimura said that he thought the government would make a 
decision on the dispatch of the Ground Self-Defense Forces (GSDF) to 
Afghanistan by the end of August, when an extraordinary session of 
the Diet is expected to be convened. "We would like to move ahead 
with this effort while having in mind when the opening of the Diet 
will occur," he stated. At the same time, he said, "There is a 
strong view that we must give serious consideration as to whether 
the oil assistance activity alone is sufficient, so we are studying 
multiple options." 
 
(6) No need to revise SOFA: Maher 
 
RYUKYU SHIMPO (Page 2) (Full) 
July 11, 2008 
 
U.S. Consul General in Okinawa Kevin Maher was invited yesterday 
afternoon to the University of the Ryukyus as a guest speaker at its 
law school to lecture on U.S. military base laws, and he there 
delivered a speech titled "U.S. Military Policy." There are now 
growing calls across the nation, including Okinawa Prefecture, for 
revising the Japan-U.S. Status of Forces Agreement (SOFA). In this 
connection, Maher stressed the United States' logic of keeping the 
SOFA intact with no revisions. "If there are moves (in Japan) for 
revising the SOFA, people in the United States will start out to say 
the Japan-U.S. security pact, which is very asymmetrical, is 
unfair," Maher said. "This matter will be a very difficult problem 
because it involves the security arrangements themselves," he 
added. 
 
Maher also took up incidents involving U.S. military personnel. In 
this regard, he noted that Japan and the United States agreed to 
improve the SOFA's implementation after the 1995 schoolgirl rape 
incident in Okinawa. He explained that there has been no problem 
since then, pointing out such procedures as turning over U.S. 
military suspects to Japanese investigative authorities. He went on: 
"If Japanese authorities arrest a (U.S. military) suspect, they will 
have to decide within a period of 25 days on whether to prosecute 
the suspect. The period of detention on the U.S. side is not 
included in that period. If Japanese authorities enter a base, they 
can investigate, so they can extend their time for investigations. 
Japanese police don't want to arrest the suspect. It is better for 
them if the U.S. military arrests the suspect." With this, he 
asserted that for the convenience of the Japanese side, there may be 
request to turn over the suspect. 
 
 
TOKYO 00001934  008 OF 009 
 
 
(7) Gov't begins to provide info about U.S. military fugitives 
 
RYUKYU SHIMPO (Page 2) (Full) 
July 10, 2008 
 
The Foreign Ministry will now provide local governments with 
information about U.S. military fugitives based on reports from U.S. 
Forces Japan on U.S. military personnel whose whereabouts are 
unknown and are classified as deserters. This information sharing 
system began yesterday through a consultative body of 14 prefectural 
governors hosting U.S. military bases across the nation. Okinawa 
Prefecture's Military Base Affairs Division received a report on 
this system yesterday from the body's secretariat (Kanagawa 
Prefecture). The Okinawa prefectural government has yet to decide on 
whether to disclose the provided information. 
 
The ministry will inform base-hosting local governments about when 
U.S. military personnel deserted, which U.S. military base asked 
Japanese authorities to arrest them, how many U.S. military 
personnel deserted, and whether they are in custody. Kanagawa 
Prefecture, which serves as the secretariat, will transmit 
information to other base-hosting local governments from the Foreign 
Ministry. 
 
In March, a taxicab driver was stabbed to death in Yokosuka, 
Kanagawa Prefecture. In this incident, a Yokosuka-based seaman 
apprentice of the U.S. Navy was arrested on robbery and murder 
charges. The U.S. sailor was classified as a deserter two days after 
he went missing. Nevertheless, the U.S. military did not report his 
case to the Japanese government. 
 
In the wake of the incident, Japan and the United States held a 
meeting of their intergovernmental joint committee in May and agreed 
to improve the Japan-U.S. Status of Forces Agreement in its 
implementation so that the U.S. government will immediately provide 
the Japanese government with information about deserters and ask 
local police to arrest them. 
 
(8) Interview with Hiroyuki Sonoda, deputy chairman of LDP Policy 
Research Council: Expand domestic demand by compiling second budget 
 
NIKKEI (Page 2) (Full) 
July 11, 2008 
 
-- What would you deal with the issue of a hike in the consumption 
tax? 
 
When considering the current political and economic situations, I 
think it will be very difficult to increase the consumption tax 
starting next fiscal year. We must first set clearly what direction 
we will take, and then make efforts to seek public understanding. 
 
-- Will the consumption tax be raised in two to three years? 
 
It probably will be. It might be desirable to raise the rate by 5 
PERCENT , to introduce a reduced rate (between 5 PERCENT  and 10) 
for some commodities, and to keep the current rate for things that 
should be kept the same. The average rate is expected to be about 3 
PERCENT , so some suggest that the government should consider hiking 
the rate several years later again. 
 
-- It will be necessary to raise the share of national treasury 
 
TOKYO 00001934  009 OF 009 
 
 
contributions in the basic pension account in FY2009, isn't it? 
 
No matter which month the government starts increasing the share, 
people will not be directly affected. To reduce national treasury 
contributions as much as possible, the hike might come later in the 
year. 
 
-- Are you considering the option of revising the Pension Revision 
Law, which calls for increasing (national government subsidy rate) 
by FY2009, and putting off the increase to FY2010? 
 
This option cannot be ruled out. 
 
-- What is the purpose of compiling a supplementary budget that is 
now under consideration for this fiscal year? 
 
The major challenges that emerged after the passage of this fiscal 
year's budget included surging oil prices, measures to benefit 
senior citizens, and expansion of domestic demand. Measures to 
expand domestic demand should cover such areas as agriculture, 
fisheries, small businesses, and environment-protection 
technologies. 
 
-- If outlays for domestic demand-expansion measures are 
incorporated in the supplementary budget, the budget will become 
hefty. 
 
I hope to see a considerably large package of measures included. 
Although there are tax system reform and deregulation already on the 
books, I think that measures that require fiscal expenditures should 
also be included to some extent. We must abide by the basic line of 
maintaining fiscal discipline, but fiscal resources might not be 
enough only through spending cuts. 
 
-- How about a cabinet shuffle? 
 
"I don't think there will be a shuffle, because if something 
undesirable crops up after a shuffle of the cabinet, there would be 
a huge (risk). 
 
-- You are positive about political realignment, but with whom in 
the Democratic Party of Japan do you think you can join hands? 
 
"If I mention the names of such persons, it will cause them trouble, 
but they are those who have distanced themselves from President 
Ichiro Ozawa. Yet, it will be very difficult to carry out 
realignment before a House of Representatives election. 
 
SCHIEFFER