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UNCLAS SECTION 01 OF 08 TOKYO 002006 
 
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: JAPANESE MORNING PRESS HIGHLIGHTS 07/22/08 
 
Index: 
 
Defense and security affairs: 
1) Okinawa Prefecture Assembly passes resolution against relocating 
Futenma Air Station, making completion of realignment project on 
time doubtful  (Sankei) 
2) Government, Okinawa Prefecture agree to set up working team to 
find a way to remove the danger of Futenma Air Station  (Mainichi) 
 
3) Deadlock continues on Okinawa's plan to move Futenma relocation 
site into the sea  (Asahi) 
4) Government upset by Okinawa's intransigence on Futenma relocation 
issue  (Asahi) 
 
5) Government plans to send fact-finding mission to E. Timor as part 
of decision on whether to dispatch troops for PKO  (Yomiuri) 
 
ASEAN forum: 
6) Foreign Minister Koumura arrives in Singapore for ASEAN ARF 
(Tokyo Shimbun) 
7) Japan, ROK, China to agree to jointly support ASEAN, including 
agricultural area  (Yomiuri) 
 
WTO Doha Round: 
8) Farm and trade ministers plan negotiation strategy for reaching 
compromise between advanced and developing countries at the WTO 
round  (Nikkei) 
9) WTO agricultural talks: Government considering accepting drop in 
rice tariff of 20 to 50 PERCENT   (Asahi) 
 
10) Survey of 100 top companies in Japan finds 43 expect economic 
recession to set it, led by high costs of materials  (Yomiuri) 
 
Political scene: 
11) Prime Minister Fukuda will make final decision on cabinet 
shuffle on July 29  (Asahi) 
12) Speculation abounds about how Fukuda will come down on Cabinet 
shuffle  (Yomiuri) 
 
Articles: 
 
1) Okinawa assembly adopts resolution against Futenma relocation 
 
SANKEI (Page 2) (Abridged) 
July 19, 2008 
 
The Okinawa prefectural assembly yesterday adopted a resolution 
opposing the government's plan to relocate the U.S. Marine Corps' 
Futenma Air Station in the island prefecture's central city of 
Ginowan to a coastal area of Camp Schwab, a U.S. military base in 
the prefecture's northern coastal city of Nago, with a majority of 
votes from the opposition parties. Okinawa Prefecture's Governor 
Hirokazu Nakaima, who has conditionally accepted Futenma airfield's 
relocation within the prefecture, will inevitably harden his 
attitude to call for the government to modify the Futenma relocation 
plan. Meanwhile, Japan and the United States have agreed to complete 
Futenma relocation in 2014. The government will now face even more 
difficulties in carrying it out as scheduled. 
 
The government plans to complete an environmental assessment by the 
end of July next year and go through procedures by the end of next 
year for land reclamation off the coast of Camp Schwab. However, if 
 
TOKYO 00002006  002 OF 008 
 
 
the government has to suspend its ongoing environmental assessment 
or if the governor is substantially late in his approval of land 
reclamation, it will be impossible to complete Futenma relocation by 
¶2014. In that case, the agreement between Japan and the United 
States may founder. 
 
2) Government, Okinawa agree to establish working group to study 
ways to eliminate danger of Futenma Air Station 
 
MAINICHI (Page 2) (Full) 
July 19, 2008 
 
The council to discuss the relocation of Futenma Air Station among 
the central government and affected local governments in Okinawa met 
on July 18 at the Prime Minister's Official Residence (Kantei). As a 
result, an agreement was reached to set up a working team for the 
central and prefectural governments to jointly study ways to remove 
dangerous aspects of Futenma Air Station before the planned 
relocation, as requested by Okinawa. An accord was also reached to 
set up a working group for the central government and prefectural 
governments to exchange views on a construction plan for the 
relocation site and the environmental impact assessment that began 
in March this year. 
 
The governments of Japan and the United States are in accord to 
relocate Futenma Air Station to the coastal area of Camp Schwab in 
Nago by 2014. But relocation work has been stalled due to Okinawa's 
request for moving the relocation site into the ocean. 
 
Given the situation, to eliminate the danger of Futenma Air Station 
before its relocation, Tokyo and Washington reached an agreement in 
August last year on eight items, including a shift in flight paths 
of U.S. military helicopters. In the council's previous meeting in 
April, Governor Hirokazu Nakaima proposed the establishment of the 
joint working team. The working team to be composed of division 
director-level officials of the Defense Ministry and Okinawa 
prefectural government will begin work before the end of this 
month. 
 
Although Okinawa has called for the closure of Futenma Air Station 
in three years and other matters, the U.S. government has not 
responded to them. Under the circumstances, whether the working team 
can come up with any effective conclusion remains to be seen. 
 
3) Futenma offshore relocation plan hits snag 
 
ASAHI (Page 4) (Abridged) 
July 19, 2008 
 
On the pending issue of relocating the heliport functions of the 
U.S. Marine Corps' Futenma Air Station in Okinawa Prefecture, the 
government explored the feasibility of moving the planned site of an 
alternative facility into the sea. This offshore relocation plan, 
however, has now hit a snag. The government and Okinawa Prefecture 
are still wide apart over how far to move the relocation site to an 
offshore area. Moreover, the United States has reminded Japan that 
the Futenma relocation plan should be carried out as agreed. It has 
been 12 years since the United States agreed with Japan to return 
Futenma airfield. Futenma relocation has yet to find a way out. 
 
"Including the idea of moving the site (of an alternative base to an 
offshore area), if there is a proposal from the governor, we will 
 
TOKYO 00002006  003 OF 008 
 
 
respond in a sincere manner." 
 
On July 18, the government held a consultative meeting with local 
officials from Okinawa's prefectural and municipal governments at 
the prime minister's office over the planned relocation of Futenma 
airfield, with Chief Cabinet Secretary Machimura presiding. In the 
meeting, Machimura touched on Okinawa's proposal to move the 
relocation site into the sea. The government wanted to reach an 
agreement that day. However, the government could not do so. 
 
In 2006, the Japanese and U.S. governments agreed on the current 
plan for Futenma relocation. This plan is to build a V-shaped pair 
of airstrips at Henoko Point in Okinawa Prefecture's northern 
coastal city of Nago. Okinawa has asked the government to move the 
relocation site into the sea for noise abatement and other reasons. 
The planned construction of a new base needs to fill up public 
waters, and the Okinawa governor has authority for approval. If 
Okinawa Prefecture opposes the Futenma relocation, the government 
cannot set about constructing a new base. Consequently, the U.S. 
military's realignment may go under in its entirety. 
 
The government's scenario was to comply with the Okinawa governor's 
request and then to consult with the United States on revising the 
Futenma relocation plan. The government, centering on Machimura, has 
held negotiations with Okinawa Prefecture over the past several 
months. 
 
"It's all right to move the runways to an offshore area. If you say 
the relocation site should be moved 100 meters, then we will study 
it." With this, Machimura sounded out Okinawa Prefecture's Governor 
Hirokazu Nakaima. In this February's consultative meeting, Machimura 
declared, "We want to reach a settlement at an early date, with the 
offshore plan in mind as well." Machimura repeatedly met with 
Nakaima thereafter and told him that the government would consider 
taking additional incentive measures for Okinawa's development. 
According to a government official, Nakaima also consented to the 
government's plan to consult with the United States on revising the 
relocation plan. 
 
However, the government and Okinawa confronted over how far to move 
the planned relocation site. The government, as a result of its 
study, told Okinawa that the relocation site can be moved about 55 
meters without doing an environmental assessment over again. Okinawa 
insisted that the site can be moved further after several 
environmental assessments. However, the government made no 
concessions, maintaining that it is a circumvention of the law. 
 
4) Nakaima growing impatient 
 
ASAHI (Page 4) (Full) 
July 19, 2008 
 
Okinawa Prefecture is growing impatient with the lack of progress on 
its proposal for Futenma airfield's offshore relocation. "I thought 
it would be easy to meet our request at this level even without 
consulting the U.S. government, but I was wrong," Okinawa 
Prefecture's Governor Nakaima told a news conference on July 18. 
 
Since last fall when the Fukuda cabinet came into office, Machimura 
has explored the possibility of moving the planned relocation site 
of Futenma airfield into the sea, relying on his personal channel 
with Machimura, who was Nakaima's junior at the former Ministry of 
 
TOKYO 00002006  004 OF 008 
 
 
International Trade and Industry. However, Nakaima could not find 
any common ground with the government. "When Chief Cabinet Secretary 
Machimura became our counterpart, we were in a mood for talks," a 
senior official of Okinawa Prefecture said. "But," he added, "few of 
our requests have been granted." 
 
As a result of this June's election for the Okinawa prefectural 
assembly, the ruling parties led by the Liberal Democratic Party and 
New Komeito failed to retain a majority. Those affiliated with the 
opposition parties that are opposed to Futenma relocation within 
Okinawa Prefecture won a majority of the seats. On July 18, the 
Okinawa prefectural assembly adopted a resolution opposed to the 
planned relocation of Futenma airfield to Henoko Point in Nago City. 
The assembly's gallery was filled with local residents opposing the 
Futenma relocation. 
 
"It's regrettable," Nakaima said. He went on: "I want to ask them 
when Futenma will be returned to us, and I also want to ask them if 
this possibility is in sight." However, there is still no solution 
in sight for Okinawa in its negotiations with the government. One 
senior official of Okinawa Prefecture said: "The United States has 
not pledged to revise the relocation plan, so I wonder how far our 
proposal is feasible in our talks with the government." 
 
5) Government to send fact-finding team to East Timor before 
discussing advisability of PKO dispatch 
 
YOMIURI (Page 4) (Full) 
July 19, 2008 
 
The government decided on July 18 to send to East Timor a 
fact-finding team composed of eight personnel from the Cabinet 
Office, Foreign Ministry, and Japan Coast Guard to consider 
assistance, including a dispatch of JCG personnel to UN peacekeeping 
operations there. 
 
The team will be dispatched for about a week from late July. Its 
mission will be to collect requests and information on the situation 
of the country from the East Timor government and the United Nations 
Integrated Mission in Timor-Leste (UNMIT), which is conducting 
security operations and assisting the country in its efforts to 
nurture a national police force. 
 
Chief Cabinet Secretary Nobutaka Machimura in a press conference on 
the evening of July 18 said: "We need to grasp what kinds of 
assistance are available and the country's needs. We have yet to 
decide on sending personnel to that country (under the PKO 
cooperation law)." 
 
6) Foreign Minister Koumura arrives in Singapore 
 
TOKYO SHIMBUN (Page 2) (Full) 
July 22, 2008 
 
Yuji Nishimura, Singapore 
 
Foreign Minister Masahiko Koumura arrived in Singapore on the 
evening of July 21 to attend a foreign ministerial of the 
Association of Southeast Asian Nations (ASEAN) members and Japan, 
China and South Korea, which will start on the July 22, as well as a 
conference of the ASEAN Regional Forum. 
 
 
TOKYO 00002006  005 OF 008 
 
 
Besides the ASEAN-hosted meetings, Komura is expected to hold 
bilateral talks on the 22nd with his Chinese and Singaporean 
counterparts Yang Jiechi and George Yong-Boon Yeo. 
 
In an effort to repair strained relations with South Korea due to 
the Japanese government's decision to mention Japan's ownership of 
the long disputed Takeshima Islets, called Dokdo in South Korea, in 
its new teaching guidelines for social studies for junior high 
schools, Koumura hopes to have an opportunity to hold talks with his 
South Korean counterpart Chung Jong Hwan. 
 
7) Japan, China, South Korea to agree on creating ASEAN support fund 
for agriculture and other sectors 
 
YOMIURI (Page 2) (Full) 
July 21, 2008 
 
Japan, China, and South Korea will jointly establish a fund to help 
the Association of Southeast Asian Nations (ASEAN) improve its 
information technology infrastructure and agricultural productivity. 
The three countries are expected to reach an agreement in an 
ASEAN-plus-Three meeting of foreign ministers to be held in 
Singapore on July 22. 
 
The size of the fund will initially be about 300 million yen. Ten 
percent will be covered by ASEAN members. The remaining amount will 
be evenly split by Japan, China, and South Korea. 
 
Instead of directly supporting agriculture and IT projects, the fund 
will be used for related budgets to prepare such projects. 
 
For instance, ASEAN nations could use the fund to hold seminars and 
symposia to consider ways to increase rice production in response to 
the food crisis. Japan, China, and South Korea are aiming to 
strengthen ties with ASEAN. 
 
8) WTO: Both industrialized and developing countries should make 
concessions, say agriculture, METI ministers 
 
NIKKEI (Page 3) (Full) 
July 22, 2008 
 
Japanese ministers at a meeting of the World Trade Organization 
(WTO), which opened in Geneva on July 21, revealed their negotiation 
policies. Agriculture Minister Masatoshi Wakabayashi said, "It is 
necessary for both industrialized countries and developing countries 
to make concessions in order for the ministerial to reach a 
settlement." Economic, Trade and Industry Minister Akira Amari 
noted, "Japan has already accepted pain in the agricultural field. 
We would suffer a setback unless we can achieve results in the 
mining and manufacturing area." 
 
The focus for Japan is whether it can block the introduction of a 
tariff cap system designed to constrain all tariffs on farm products 
below a designated level and secure 8 PERCENT  of all farm products 
as key items whose tariff cuts can be eased as exceptions. 
Wakabayashi said, "I will continue talks until I can obtain 
satisfactory results." 
 
9) Rice tariff:  Government considering accepting 20 PERCENT -50 
PERCENT  cut at WTO talks; Opposed to uniform tariff cap 
 
 
TOKYO 00002006  006 OF 008 
 
 
ASAHI (Page 1) (Full) 
July 21, 2008 
 
The Japanese government has begun considering lowering rice tariffs 
by about 20 PERCENT -50 PERCENT  at the multilateral free trade 
under the World Trade Organization (WTO) with the intention to 
accept proposals by the chairman of the WTO's agriculture 
negotiations. However, it will strongly oppose a proposal for 
uniformly imposing an upper limit on tariffs on farm products. It 
will make its stand clear at a ministerial to be held in Geneva 
starting on July 21 for a settlement before year's end. 
 
Rice became subject to tariffs after the Uruguay Round. The current 
tariff is about 340 yen per kilogram (778 PERCENT  on an ad valorem 
basis). 
 
According to the chairman's latest proposal, farm products of 
industrialized countries will be categorized into general items and 
key items for protection. Tariffs will be lowered accordingly. The 
margin of a cut in tariffs on key items would be within one-third to 
two-thirds of such tariffs on general items. 
 
Each country will likely be able to designate a specific proportion 
of all its trade items as key items. The Japanese government plans 
to include rice in a list of key items. An estimate worked out, 
based on the chairman's proposal, found that a new tariff on rice 
would become approximately 180 yen to 260 yen per kilogram. 
 
Rice grown in Thailand, the largest rice exporter in the world, at 
present is about 80 yen per kilogram. Even if a new tariff is set at 
the lowest level of 180 yen, the import price would become about 260 
yen. Transportation cost would also be added to this price. Japanese 
rice is about 230 yen per kilogram. The government says that since 
its quality is high, it can still maintain competitiveness. For this 
reason, the Japanese government has now almost reached a common 
understanding that it will have to accept a tariff increase in line 
with the chairman's proposal, as one negotiator said. 
 
Regarding a cut in tariffs on farm products, Brazil and other 
exporters are calling for the introduction of a tariff cap system. 
Uniformly setting a tariff cap of 100 PERCENT  has been floated. If 
realized, imported Thai rice would become cheaper than domestic 
rice. The Japanese government is determined not to accept such a 
rate. 
 
Japan has sought to have 10 PERCENT -15 PERCENT  of its farm 
products -- 1,332 -- to be accepted as key products. However, 
following the chairman's proposal of 4 PERCENT -6 PERCENT , it has 
changed to a flexible stance with Agriculture Minister Wakabayashi 
saying, "I want to secure at least 8 PERCENT ." 
 
A ministerial at the WTO is expected to continue for about a week. 
In addition to tariffs, agriculture subsidies will also be on the 
table. A reduction in tariffs on mined and manufactured products is 
also on the table to be tackled in tandem with farm products. The 
WTO is aiming for a general agreement on overall products. If the 
ministerial this time falls apart, reaching an agreement within the 
target of this year will be difficult. 
 
10) Poll: Number of companies that see the economy is in a recession 
increases to 43 
 
 
TOKYO 00002006  007 OF 008 
 
 
YOMIURI (Page 1) (Full) 
July 19, 2008 
 
The Yomiuri Shimbun on July 18 tallied the results of a business 
survey it conducted on 100 leading companies. To a question on the 
current state of the economy, 43 companies, 1.5 times more than the 
number in the previous survey (April, 2008) which was 29 companies 
then, replied that they felt the economy was already in a recession. 
Only two companies thought that the economy was recovering, but the 
pace was moderate.  In the survey carried out in November 2007, 67 
companies replied that the economy was moderately recovering. The 
results indicate a pessimistic view has rapidly spread this year. 
 
 
Survey on 100 leading companies 
 
The survey was carried out from July 7 through 14. As factors 
(multiple replies were allowed) that are having an adverse impact on 
the economy, 92 companies cited the steep rise in the prices of raw 
materials, including crude oil and grain. Replies, such as "sluggish 
consumer spending," given by 47 companies, or "a fall in U.S.-bound 
exports," cited by 46 companies, were noticeable. Only nine 
companies cited "the rapid high yen-weak dollar-trend," compared 
with 39 in the previous survey. 
 
Regarding a consumption tax hike, seven companies thought that the 
consumption tax should be hiked at an early date, while 37 companies 
took a stand that a consumption tax increase would be unavoidable in 
the future. More than 40 PERCENT  of respondents thus approved a 
hike in the consumption tax. In the November 2007 survey, seven 
companies replied that the consumption tax should not be increased. 
However, no companies objected to a consumption tax hike in the 
latest survey. 
 
11) Prime Minister Fukuda considering cabinet shuffle, to make final 
decision by July 29 
 
ASAHI (Page 1) (Full) 
July 21, 2008 
 
Prime Minister Yasuo Fukuda is planning to shuffle his cabinet 
before an extra ordinary Diet session is convened, possibly in late 
August. He will make a final decision by July 29 when the cabinet 
approves budgetary request guidelines for fiscal 2009. Fukuda hopes 
to make clear his political stance by shuffling the cabinet, most 
members of which were kept on from the government of former Prime 
Minister Shinzo Abe. 
 
When Fukuda formed his cabinet last September, he retained 15 of the 
17 ministers of the Abe cabinet. The dominant view in the ruling 
camp is that the cabinet should be shuffled in order to boost the 
Fukuda government's popularity, which has been low. A person close 
to Fukuda indicated on the 20th that Fukuda had decided to shuffle 
the cabinet, saying: "The Prime Minister no longer is wavering on 
that." 
 
Fukuda has been vacationing at his official and private residences, 
as well as at a hotel in Tokyo. The possibility is high that he will 
shuffle the cabinet before coming up with such policy measures as 
ones dealing with medical care for the elderly, a set of five social 
welfare steps, and additional ways to halt soaring fuel prices. 
 
 
TOKYO 00002006  008 OF 008 
 
 
Fukuda appears to be carrying out a shuffle sometime between late 
July and early August at the earliest. The focus is on whether he 
can display his own political identity in handling a bill extending 
the Afghan refueling support special measures law, which will become 
an important issue in the upcoming extra session, as well as in 
picking a minister for a consumer affairs agency minister. Attention 
will be also on how Chief Cabinet Secretary Nobutaka Machimura and 
Health, Labor and Welfare Minister Yoichi Masuzoe will be treated. 
If Fukuda finds it difficult to put his favorites in his new 
cabinet, he may forgo shuffling the cabinet. 
 
12) Prime Minister Fukuda resumes official duties today, may make 
decision to shuffle cabinet 
 
YOMIURI (Page 4) (Full) 
July 22, 2008 
 
Wrapping up his summer vacation, Prime Minister Yasuo Fukuda is to 
resume his official duties today. During the six-day vacation, 
Fukuda appears to have looked into a strategy of managing his 
government in the future, while staying at a Tokyo hotel. The major 
focus of attention is now whether he will carry out a cabinet 
shuffle. 
 
Fukuda stayed at his official residence adjacent to the Prime 
Minister's Official Residence on July 16. Since the 17th, he and his 
wife Kiyoko stayed at the hotel, without going any place far. There 
were no politicians who called on him at the hotel, according to 
sources concerned. He reportedly exchanged views on a political 
timetable on the phone with senior members of the ruling coalition. 
 
In addition to coordination with the ruling parties on a political 
calendar with an eye on the upcoming extraordinary Diet session, 
Fukuda will have to deal with such political issues as the 
compilation of budgetary request guidelines for fiscal 2009, as well 
as a set of five relief measures for social welfare. He is expected 
to discuss with New Komeito leader Akihiro Ota this week a timetable 
for shuffling the cabinet and for convening in the fall an extra 
Diet session. 
 
If Fukuda shuffles the cabinet, it would be the first time for him 
since he assumed office last September. Of the 17 cabinet ministers, 
15 came from the cabinet of former Prime Minister Shinzo Abe. Many 
in the ruling camp have called on Fukuda to shuffle the cabinet to 
display his own political identity. Meanwhile, some have taken a 
cautious stance about a shuffle, fearing that if a scandal involving 
a new cabinet minister is discovered, the new cabinet would grind to 
halt. 
 
ZUMWALT