VZCZCXRO7267
PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #2058/01 2100114
ZNR UUUUU ZZH
P 280114Z JUL 08
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 6102
INFO RUEKJCS/SECDEF WASHDC PRIORITY
RHEHAAA/THE WHITE HOUSE WASHINGTON DC PRIORITY
RUEAWJA/USDOJ WASHDC PRIORITY
RULSDMK/USDOT WASHDC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC//J5//
RHHMUNA/HQ USPACOM HONOLULU HI
RHHMHBA/COMPACFLT PEARL HARBOR HI
RHMFIUU/HQ PACAF HICKAM AFB HI//CC/PA//
RHMFIUU/USFJ //J5/JO21//
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
RUAYJAA/CTF 72
RUEHNH/AMCONSUL NAHA 1418
RUEHFK/AMCONSUL FUKUOKA 9044
RUEHOK/AMCONSUL OSAKA KOBE 2774
RUEHNAG/AMCONSUL NAGOYA 7248
RUEHKSO/AMCONSUL SAPPORO 9627
RUEHBJ/AMEMBASSY BEIJING 4562
RUEHUL/AMEMBASSY SEOUL 0552
RUCNDT/USMISSION USUN NEW YORK 0941

UNCLAS SECTION 01 OF 11 TOKYO 002058 
 
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 07/28/08 
 
Index: 
 
Political agenda: 
1) Prime Minister Fukuda increasingly cautious about shuffling his 
cabinet, may delay a decision  (Nikkei) 
2) Fukuda to decide cabinet shuffle date after meeting today with 
New Komeito head Ota  (Sankei) 
3) Key questions in possible cabinet shuffle will be whether former 
LDP Secretary General Taro Aso will be offered a position and if so, 
whether he will accept it  (Tokyo Shimbun) 
4) Coalition partner New Komeito aiming at end of year Diet 
dissolution  (Mainichi) 
 
Defense and security issues: 
5) DPJ Secretary General Hatoyama reiterates party's opposition to 
extending the new antiterrorist law that allows MSDF refueling 
service in Indian Ocean  (Tokyo Shimbun) 
6) Hatoyama conditionally willing to reconsider aid to Afghanistan 
(Asahi) 
7) Okinawa governor acknowledges that prefecture's proposal to shift 
Futenma relocation site into the ocean has deadlocked  (Asahi) 
8) Defense Ministry admits improper use of money  (Tokyo Shimbun) 
9) Defense Ministry to seek outlays to upgrade F-15s in next year's 
fiscal budget, delaying FX choice  (Yomiuri) 
 
10) Government considering placing tax on airplane tickets and use 
the revenue as a fund for developing countries  (Tokyo Shimbun) 
 
Doha Round: 
11) Japan to accept Lamy arbitration proposal in WTO farm trade 
talks  (Nikkei) 
12) WTO's Lamy proposal would be harsh on Japanese farmers 
(Nikkei) 
 
Relations with South Korea: 
13) Row over Takeshima isles taking its toll on Japan-ROK exchanges 
with over 100 events cancelled  (Tokyo Shimbun) 
14) First Takeshima, now Tsushima being claimed by ROK politicians 
as South Korean territory, with proposal now before the national 
assembly  (Sankei) 
 
Articles: 
 
1) Prime minister slow to make up mind for cabinet shuffle 
 
NIKKEI (Page 2) (Excerpts) 
July 28, 2008 
 
It is high time for Prime Minister Yasuo Fukuda to shuffle his 
cabinet. But the prime minister continues to keep mum in defiance of 
calls from his aides to launch "his own cabinet" to bolster his 
administration in the wake of the G-8 summit. Putting off a cabinet 
shuffle to avert risks is certain to raise questions about the prime 
minister's decision-making capability. The delay might also fuel the 
race to replace Fukuda. 
 
The prime minister stayed at his official residence on July 26 and 
¶27. Over the weekend, he kept his silence, meeting only with an 
American political scientist, an old friend. 
 
An LDP executive meeting was held on July 22, the day after the 
prime minister's vacation was over. In the session, Fukuda 
 
TOKYO 00002058  002 OF 011 
 
 
underlined the need to consider matters comprehensively, irritating 
party executives. But the prime minister soon sealed off any comment 
indicative of a cabinet shuffle, saying to the press on July 25, 
"It's difficult to tell you when I will make a comprehensive 
decision." 
 
The prime minister is extra cautious because his decision is 
directly connected with his administration's strategy toward the 
next extraordinary Diet session, next year's regular Diet session, 
and Lower House dissolution for a snap general election. The 
cabinet's support ratings have not markedly increased after the 
summit. Once the next extraordinary Diet session is convened, the 
ruling coalition is certain to find itself on the defensive with the 
Diet divided. With the term of office of the Lower House members 
scheduled to expire in September 2009, a cabinet shuffle is one of 
the few offensive means. A veteran LDP noted: "A partial cabinet 
reshuffle would be tantamount to firing some cabinet ministers. If 
the cabinet is to be shuffled, it has to be shuffled as a whole." 
 
What is being questioned is the administration's policy line. On 
economic and fiscal policies, how is the prime minister going to 
treat Hidenao Nakagawa and others who are advocating a "rising tide 
policy" and Kaoru Yosano and others who are calling for fiscal 
reconstruction? The prime minister has flip-flopped his view on a 
consumption tax hike himself. He has to make up his mind in 
selecting new cabinet ministers. 
 
The prime minister thinks the current cabinet is well-balanced. For 
this reason, some think the prime minister would replace only a few 
of the 15 cabinet ministers he inherited from his successor, Shinzo 
Abe, such as Economic and Fiscal Policy Minister Hiroko Ota and 
Economy, Trade and Industry Minister Akira Amari. But a minor change 
would blur the significance of a cabinet shuffle. Some cabinet 
ministers even indicated that resorting to a cabinet shuffle for 
bolstering support ratings is improper. 
 
Under the current political timetable, shuffling the cabinet before 
the end of the month already seems difficult. An informal World 
Trade Organization (WTO) cabinet ministerial has been extended, and 
MAFF Minister Masatoshi Wakabayashi and MITI Minister Amari, who are 
attending the meeting, will not return home until July 31. 
 
2) Cabinet shuffle could slip until after LDP, Komeito heads meet 
after July 28 
 
SANKEI (Page 1) (Excerpts) 
July 26, 2008 
 
Prime Minister Yasuo Fukuda on July 25 announced that he did not 
play to meet with New Komeito Representative Akihiro Ota over the 
weekend to discuss a cabinet shuffle and the timing of convening the 
extraordinary session of the Diet. Accordingly, the meeting with Ota 
will now likely be after July 28, making it unavoidable that there 
will be an impact on the timing of the cabinet shuffle, which the 
Prime Minister had aimed to be at the end of the month. 
 
The Prime Minister on the evening of the 25th told the press corps 
at his official residence, "There is nothing strange about the 
representatives of the ruling coalition meeting together," adding, 
"There is no particular plan for us to meet this weekend, and it has 
not been decided when we will meet." At the same time, he also 
stressed: "I have never once uttered the word 'shuffle', for the 
 
TOKYO 00002058  003 OF 011 
 
 
decision will be made comprehensively based on many factors. I would 
be in an awkward position if it were said when that comprehensive 
decision will be made." 
 
On the other hand, a government source close to the Prime Minister, 
commenting on the cabinet shuffle, indicated that it may have to 
slip until after the end of the month, with consideration being 
given to the WTO Doha Round ministerial meeting having encountered 
rough going, and the need to quickly come up with measures to deal 
with agricultural issues. 
 
3) Will Taro Aso be in the shuffled cabinet or will he reject an 
appointment? 
 
TOKYO (Page 2) (Abridged) 
July 28, 2008 
 
With speculation rampant in the ruling camp that Prime Minister 
Fukuda will soon shuffle his cabinet and Liberal Democratic Party 
(LDP) executive lineup, all eyes are turned with attention to the 
moves of former LDP Secretary General Taro Aso, a candidate for 
Fukuda's post once he steps down. 
 
Since he ran and lost against Fukuda in the LDP presidential race 
last September, Aso has been content not to have an official post, 
but he has been actively stumping around the country, making 
approximately 150 stops in 10 months, or an average of one stop 
every two days. 
 
For Prime Minister Fukuda, whose approval ratings in the polls have 
been low, if he appoints the extremely popular Aso to an important 
cabinet post or party executive position, he can expect a boost in 
his administration's ratings, while displaying party unity. But 
there is a possibility he might be shut our over his campaigning to 
topple the cabinet. 
 
Actually, when the Prime Minister last September was forming his 
cabinet, he sounded out Aso on a cabinet seat, but the view then in 
the Machimura faction (Aso's faction) was that he would not accept a 
position at that time. 
 
However, for Aso, who wants to sit in the prime minister's seat, in 
case the Prime Minister sounds him out for a cabinet post, how he 
will respond will be an important issue. 
 
4) New Komeito eyeing Lower House dissolution late this year or 
early next year 
 
MAINICHI (Page 2) (Full) 
July 28, 2008 
 
The New Komeito, the junior coalition partner of the ruling Liberal 
Democratic Party (LDP), is now taking a stance of making specific 
requests of the way Prime Minister Yasuo Fukuda is managing his 
administration, having in mind dissolution of the House of 
Representatives and general election late this year or early next 
year. The party has called for convening the next extraordinary Diet 
session in mid-September or later, aiming to put off the issue of 
extending the New Antiterrorism Special Measures Law, which allows 
Japan to conduct refueling operations in the Indian Ocean. It has 
also asked the government to change the policy of curbing 
expenditures that has been in place since the government of Prime 
 
TOKYO 00002058  004 OF 011 
 
 
Minister Junichiro Koizumi. In order to display its own political 
presence, the party wants to have spare time between the next Lower 
House election and the Tokyo Metropolitan assembly election to be 
held next June or July. 
 
New Komeito leader Akihiro Ota in a speech on July 25 in the city of 
Tajimi, Gifu Prefecture, stressed: "It is important for us to change 
to a policy of helping the socially weak and the people's 
livelihoods rather than a policy of advocating the principle of 
market mechanisms." In a meeting on the 24th of the party's Policy 
Research Council, many participants said that they were unable to 
agree to the government's policy of reducing by 220 billion yen per 
year the level of social security spending. 
 
Secretary General Kazuo Kitagawa, referring to the issue of 
extending the new antiterrorism law at a press conference on the 
24th, sought to counter a view in the LDP calling for convening the 
extra Diet session in late August, expecting resistance from the 
opposition camp. He stated: "It is important to secure the 
understanding of the Democratic Party of Japan (DPJ) and the 
public." 
 
The reason for the New Komeito calling on the Fukuda administration 
to shift its policy is because many supporters of the party have 
increasingly become unhappy with the fact that the Komeito's 
principle of placing importance on social welfare and peace has been 
blindsided under the LDP-New Komeito coalition regime. Since the 
term of the Lower House members will expire next September, a senior 
New Komeito member expressed concern, saying: "The LDP lacks a sense 
of tension toward the election. If nothing is done, the Prime 
Minister will be forced to dissolve the Lower House, in which the 
possibility is that we will be defeated." 
 
In the New Komeito, some have now questioned that the Lower House 
will be carried out the leadership of Fukuda, whose popularity has 
been low. As senior party member said: "Since the Prime Minister's 
view is similar to that of our party, we cannot openly urge him to 
step down. However, we have indirectly warned the LDP to consider 
the situation." 
 
5) DPJ to oppose antiterror law extension: Hatoyama 
 
TOKYO SHIMBUN (Page 2) (Full) 
July 26, 2008 
 
The leading opposition Democratic Party of Japan (Minshuto) will 
oppose a government-planned bill revising the new Antiterrorism 
Special Measures Law for continuing the Maritime Self-Defense 
Force's refueling activities in the Indian Ocean, DPJ Secretary 
General Hatoyama told a press conference yesterday. "We're basically 
unlikely to vote for that bill," Hatoyama said. 
 
The government is planning to present the bill to the Diet at its 
forthcoming extraordinary session, which is expected to be convened 
in late August. However, Hatoyama criticized the MSDF's refueling 
mission. He said: "For the sake of peace and stability in 
Afghanistan, it makes no sense at all. We should stop." He also 
revealed that he has told his party's foreign affairs and defense 
division to work out a plan for Japan's contribution to 
Afghanistan's reconstruction. 
 
6-1) DPJ Secretary General Hatoyama reveals plan to reconsider 
 
TOKYO 00002058  005 OF 011 
 
 
Afghanistan assistance 
 
ASAHI (Page 4) (Full) 
July 26, 2008 
 
Democratic Party of Japan Secretary General Yukio Hatoyama, speaking 
to the press on July 25, indicated that his party would reconsider a 
set of Afghanistan support measures put together last year by the 
party. Hatoyama said: "We will closely examine the package and will 
add new measures if necessary. Whatever the situation, it's our 
responsibility to crystallize the party's thinking. If necessary, we 
will cooperate (with the government). We will not oppose plans 
devised by the government simply for the sake of opposition." 
 
Late last year, the DPJ submitted to the Diet an antiterrorism bill 
including Afghanistan support measures. The bill is now in the Lower 
House for deliberations. The bill is designed to allow SDF personnel 
to carry out strictly humanitarian and reconstruction assistance, 
such as medical services, in Afghanistan once a ceasefire agreement 
is reached between the Afghan government and the Taliban. 
 
6-2) DPJ Secretary General Hatoyama: If Government presents new 
proposal, DPJ would approve that proposal 
 
MAINICHI (Page 2) (Full) 
July 28, 2008 
 
Democratic Party of Japan (DPJ) Secretary General Yukio Hatoyama at 
a press conference on July 25 revealed that his party was studying 
counterproposals toward the government's plan to extend the New 
Antiterrorism Special Measures Law, which will become a major issue 
at the next ordinary Diet session. He stated: "If the government's 
plans do not run counter to ours, we have no intention to oppose all 
government ideas just because they are proposed by the government." 
 
Hatoyama indicated the possibility that if the government presented 
a new proposal to replace the Maritime Self-Defense Force's (MSDF) 
refueling operations in the Indian Ocean, the DPJ would approve it. 
 
 
The DPJ submitted to the previous regular Diet session a bill 
dispatching Self-Defense Force (SDF) personnel overseas limiting to 
reconstruction activities in cease-fire agreed areas. The House of 
Representatives has decided to carry it over for further 
deliberations. With this bill in mind, Hatoyama stated: "After 
examining carefully, if necessary, we will incorporate new policy 
measures." 
 
However, the government has judged that it would difficult to 
dispatch the SDF to Afghanistan based on the result of a report by a 
fact-finding team. The New Komeito, the junior coalition of the 
ruling Liberal Democratic Party (LDP), has begun showing reluctance 
to extend the New Antiterrorism Special Measures Law by taking a 
revote in the Lower House. However, a DPJ policy official said: "Our 
party has not actually carried out the study of counterproposals." 
 
7) Nakaima points to tacit understanding on moving Futenma 
replacement facility offshore 
 
ASAHI (Page 4) (Full) 
July 26, 2008 
 
 
TOKYO 00002058  006 OF 011 
 
 
Okinawa Governor Hirokazu Nakaima in a regular press conference on 
July 25 indicated that the government's plan to relocate Futenma Air 
Station to Nago would be revised in response to Okinawa's call for 
moving the envisaged replacement facility offshore, saying: "My 
understanding it that we have reached a tacit understanding (with 
the government)." 
 
Nakaima touched on a Futenma relocation consultative council meeting 
held on July 18 between the central and Okinawa governments. 
Referring to the decision to set up working teams for eliminating 
the danger of Futenma Air Station and for an environmental impact 
assessment of the replacement facility, Nakaima explained: 
"Working-level talks will start because there is a tacit 
understanding on removing the replacement facility." 
 
8) Defense Ministry admits to inappropriate spending 
 
TOKYO SHIMBUN (Page 1) (Abridged) 
July 26, 2008 
 
The Defense Ministry yesterday announced a plan to improve its 
spending in connection with its practice of pooling money with 
fictitious receipts mainly for the purpose of gathering 
intelligence. This announcement means that the Defense Ministry has 
effectively admitted to its inappropriate control of incentive 
money, which used to be separately in the hands of each section's 
head. According to the announced plan, the defense minister's 
secretariat will handle and control such incentive money. The plan 
also says the Defense Ministry will clarify for what purpose the 
money is used. When it comes to the pooled money, however, the plan 
goes no further than to say the Defense Ministry is "still checking" 
such off-the-book money. 
 
The Defense Ministry has now set forth such an improvement measure 
without unveiling the facts about its practice of making 
off-the-book money and pooling money. This response, however, is 
rather unnatural. The Defense Ministry's ability to clean itself up 
will likely be called into question again. 
 
9) Defense Ministry to make budget request for F-15 upgrade 
 
YOMIURI (Page 2) (Abridged) 
July 28, 2008 
 
The Defense Ministry has decided to make a budget request for next 
fiscal year to upgrade the Air Self-Defense Force's F-15 fighter 
jets. The amount of expenditures required for more than 10 F-15 
fighters would exceed the framework set for improvement outlays 
under the government's current midterm defense buildup plan for 
fiscal 2005-2009. However, the Defense Ministry deemed it 
indispensable to upgrade the F-15s because it has been falling 
behind schedule in screening and selecting the follow-on mainstay 
fighter (FX) for the ASDF. 
 
The Defense Ministry has plans to modernize the F-15, including 
enhancing the performance of its radar and computer systems. This 
upgrade is considered for a total of about 40 F-15s or two squadrons 
in order to cope with China's growing air power and other 
situational changes. The Defense Ministry has already earmarked 
improvement costs for 26 F-15s within the current midterm defense 
buildup plan's framework, and it had planned to make a budget 
request for the remaining more than 10 F-15s under the next midterm 
 
TOKYO 00002058  007 OF 011 
 
 
defense buildup plan. 
 
The Defense Ministry planned to acquire seven FX planes under the 
current midterm defense buildup plan, with the F-22 Raptor, a 
U.S.-developed state-of-the-art stealth fighter, as a likely 
candidate. However, the United States has placed an embargo on 
foreign sales of the F-22. This has made it difficult for the 
Defense Ministry to select the FX model. The Defense Ministry will 
therefore put off its FX selection to the next midterm defense 
buildup plan. Instead, the ministry decided to move up the F-15 
upgrade plan. It will earmark upgrade costs for more than 10 F-15s 
in its next fiscal year budget, and their upgrade is estimated at 
around 30 billion yen or so. 
 
10) Japan considering introduction of international solidarity 
levies to be imposed on airline tickets, etc.: Financing development 
assistance eyed 
 
TOKYO SHIMBUN (Top Play) (Excerpts) 
July 28, 2008 
 
The government on July 27 launched discussions on the propriety of 
introducing an international solidarity tax for currency trading 
activities and airline ticket purchases to help finance assistance 
to development countries. It will shortly join an international 
organization formally that is promoting the so-called international 
solidarity levy. 
 
The aim is to achieve the UN's Millennium Development Goals (MDGs) 
aimed at resolving poverty in developing countries and secure funds 
to help developing countries promote measures against global 
warming. Since funds from the official development assistance (ODA) 
program alone do not suffice to finance development assistance, the 
establishment of an innovative method of procuring funds, such as 
the solidarity levy, has become an international challenge. 
 
Specifically, the government is mulling introducing a currency 
transaction development tax of as low as 0.005 PERCENT  on foreign 
currency trading activities. It also plans to implement an airline 
ticket levy, which allows it to collect taxes from relatively 
affluent people. 
 
11) Japan set to accept mediation plan in WTO trade talks 
 
NIKKEI (Page 1) (Excerpts) 
July 28, 2008 
 
(Baba, Geneva) 
 
The Japanese government yesterday started discussing the possibility 
of accepting a mediation plan presented by WTO Director-General 
Pascal Lamy and others in a ministerial meeting of the World Trade 
Organization (WTO). Japan, which had complained of a lack of 
measures to protect farm products during seven years of 
negotiations, judges that making a concession is now unavoidable. 
Participants are aiming to reach a general agreement next week, 
after ironing out differences in their positions. 
 
The new round of WTO global trade talks (Doha Round) has brought 
together 153 countries and regions. The Doha Round is tasked with 
setting rules to uniformly cut tariffs on farm and industrial 
products in a bid to expand global trade. 
 
TOKYO 00002058  008 OF 011 
 
 
 
In an effort to bring about a general agreement, Lamy submitted the 
mediation plan on July 25. The plan included specific numerical 
targets for about 20 items, such as a measure to set the maximum 
ratio of "sensitive" agricultural products for which high tariffs 
are exceptionally allowed to the total at 4 PERCENT  and at 6 
PERCENT  with conditions. Economy, Trade and Industry Minister 
Toshiaki Amari indicated on July 26 that negotiations were moving 
toward a general agreement, remarking: "Argentina alone is raising 
opposition. Countries' views are being gradually unified." 
Agriculture, Forestry and Fisheries Minister Masatoshi Wakabayashi 
acknowledged yesterday that the round has reached a decisive phase. 
 
 
If countries agree, Lamy intends to present a formal plan for 
agreement possibly on the afternoon of the 28th. He plans to conduct 
discussions in the ministerial meeting and a plenary session to be 
held by all participant countries and seek their agreement. 
 
12) WTO chairman's mediation plan presses Japan to make tough choice 
in farm sector 
 
NIKKEI (Page 2) (Full) 
Evening, July 26, 2008 
 
(Ichimura, Geneva) 
 
In an effort to strike a broad agreement on rules for liberalizing 
trade in agricultural and industrial products, World Trade 
Organization (WTO) Director General Pascal Lamy and others compiled 
a mediation plan. This chairman's report urges countries to make a 
difficult choice. Specifically, the report requires Japan to set the 
maximum ratio of mainstay or "sensitive" farm products, for which 
high tariffs are exceptionally allowed, to 6 PERCENT  of the total 
and change its conventional policy of agricultural protection. 
Agriculture, Forestry and Fisheries Minister Masatoshi Wakabayashi 
has said: "Japan will aim at securing 8 PERCENT ," but Japan may be 
pressed for a compromise in the end. 
 
In the farm sector, the Agriculture Ministry is concerned most about 
the number of mainstay items. The mediation plan sets the ratio of 
such items to the total at 4 PERCENT  in principle for 
industrialized countries in accordance with a proposal by Western 
countries but at 6 PERCENT  only for Japan and Switzerland. In the 
case of Japan, however, the number of farm products on which a more 
than 100 PERCENT  tariff has been imposed, such as rice, dairy 
products, and sugar, is 125, accounting for 9.4 PERCENT  of the 
total. Japan is set to continue insisting that the proposed 6 
PERCENT  is not enough to protect such sensitive items. 
 
In exchange for reducing the margin of tariff cuts for mainstay 
items, expanding low-tariff import quotas is required. Japan 
requested that the ratio of expansion be at up to 4 PERCENT  of 
domestic demand. The mediation plan accepted Japan's request. The 
report notes that the special safeguard system, under which domestic 
farm products will be protected with higher tariff rates introduced 
when imports sharply increase, be phased out in seven years, 
dismissing Japan's call for maintaining the system. 
 
In the industrial sector, in which Japan is aiming to expand 
exports, the Ministry of Economy, Trade and Industry (METI) is 
dissatisfied with the proposed tariff cuts for emerging countries. 
 
TOKYO 00002058  009 OF 011 
 
 
The mediation plan allows emerging countries to choose one of these 
upper limits on tariff rates in compliance with the scope of 
exceptional tariffs - 20 PERCENT , 22 PERCENT , and 25 PERCENT  - 
but METI is aiming to have the rates lowered further. Indian 
Commerce and Industry Minister Kamal Nath, however, said that these 
rates are acceptable. Stormy negotiations are expected. 
 
The ratio of items under the application of a provision on 
minimizing exceptional items from tariff reductions to the total 
items in a specific industry is set at 20 PERCENT  in terms of 
quantity and at 9 PERCENT  in terms of value in the mediation plan. 
To make this provision stricter and to prevent a loophole, Japan 
wants to raise the ratio in terms of import value to over 10 PERCENT 
 at least. 
 
However, emerging countries that give priority to growing domestic 
industries, such as Brazil and India, are complaining about this. In 
future negotiations, heated debate is expected on this point. 
 
13) Japanese-South Korean exchanges frozen due to Takeshima issue; 
104 events cancelled or put off 
 
TOKYO SHIMBUN (Page 1) (Abridged) 
July 28, 2008 
 
Following the Ministry of Education, Culture, Sports, Science and 
Technology having included in a teaching guideline for social 
studies for junior high schools a claim of sovereignty over the 
islets called Takeshima in Japan (Dokdo in South Korea), which the 
South Korean government also claims, the Kyodo News Agency learned 
on July 27 that 104 exchange events between Japan and South Korea 
planned by municipalities in 33 prefectures have been cancelled, put 
off or scaled own. 
 
The requests came from the South Korean side. Although Japan-South 
Korea relations were previously strained because of the visits to 
Yasukuni Shrine by then Prime Minister Junichiro Koizumi, ties later 
appeared to have got better. Now, the Takeshima issue has had a 
negative impact on the grass-root level exchanges. One municipal 
official in charge made this comment with annoyance: "It is 
regrettable that the political issue has affected children who 
looked forward to visiting South Korea in the summer vacation." 
 
Kyodo conducted a survey on the matter in prefectures and 
government-designated cities on July 25. Most of the events that 
have been cancelled are visits to South Korea by elementary and 
junior high school students, and by teachers and school heads, as 
well as sports events. Of the 104 events, 63 have been cancelled, 16 
have been postponed, and another 16 have been suspended or are under 
coordination. The South Korean side has decided not to participate 
in five events that were expected to be held in Japan. Four events 
that also were planned to be held in Japan have been scaled down. Of 
the events that Tottori Prefecture had planned, 12 have been 
cancelled and four have been under coordination. A total of 16 that 
have been cancelled or under coordination is a largest number among 
those of the prefectures, followed by seven events of Gifu 
Prefecture, six of Akita, Kanagawa and Fukuoka prefectures. 
 
One of the events cancelled is Fukuoka Municipal Fukuoka Girls 
School's plan to visit a sister school in Pusan City from July 25. 
 
14) Fifty South Korean lawmakers propose submitting resolution 
 
TOKYO 00002058  010 OF 011 
 
 
claiming that Tsushima is also their territory 
 
SANKEI (Page 2) (Excerpts) 
July 28, 2008 
 
Seoul, Katsuhiro Kuroda 
 
Anti-Japanese movements generated by the Takeshima issue are 
continuing in South Korea to protest Japan's describing in its 
teaching manuals for school curriculums guidelines for social 
studies for middle schools confrontation between Japan and South 
Korea over the Takeshima Island (known as Dokdo by South Korea). 
Meanwhile, fifty South Korea lawmakers of the ruling and opposition 
parties have proposed submitting a resolution demanding the return 
of Tsushima Islands, claiming that Japan's Tsushima is also South 
Korea's territory. 
 
Overheated 
 
Tsushima Islands (Tsushima City, Nagasaki Prefecture with a 
population of about 50,000) are islands located north of Kyushu. 
They are also only 50 kilometers away from South Korea's 
southernmost city of Pusan. The islands have had deep relations with 
the Korean Peninsula since early times. South Koreans have recently 
come to assert that Tsushima also belongs to South Korea, when they 
want to express retaliatory feelings against Japan over Takeshima 
Island. The claim has nuisance value and is almost humorous. 
 
The Masan City Assembly established the Tsushima Day several years 
ago as retaliation against the Takeshima Island Day Ordinance 
enacted by the Shimane Prefectural Assembly. The South Korean press 
extensively reported that members of groups calling for defending 
Dokdo at all cost visited Tsushima and marched in front of the city 
hall, holding up banners carrying a slogan that "Tsushima is South 
Korea's territory." 
 
However, this is the first time for such a large number of lawmakers 
to seriously propose submitting a resolution to the National 
Assembly. When they will formally submit such a resolution is 
unclear. Some lawmakers are critical of the move, saying, "If they 
do that, some may think our country's justifiable claim may be 
groundless." 
 
Grounds 
 
The envisaged resolution notes that South Korea's documents from the 
Yi Dynasty so claim,  that the genes of Tsushima residents are 
identical with those of South Koreans, that South Korea's first 
President Rhee Syng Man once stated that Tsushima had been its 
territory with a long history of tributary diplomacy to South Korea, 
and that a resolution demanding the return of Tsushima was submitted 
to the first National Assembly in 1949. 
 
All those claims are sheer nonsense. In South Korea, however, when 
it comes to confrontation between Japan and South Korea, the South 
Korean public is given only self-centered and unilateral information 
as can be seen in the case of the Takeshima (Dokdo) issue. There is 
a rumor around that South Korean tourists visiting Tsushima are 
already openly claiming that Tsushima is South Korea's territory. 
 
The writer of the relic "Dokdo is our land," a popular song known to 
everybody in South Korea, in an interview given recently said that a 
 
TOKYO 00002058  011 OF 011 
 
 
phrase in the song that "Tsushima is Japan's land" should be changed 
to "Tsushima is also our land." The fixed notion that Tsushima is 
also South Korea's territory may spread in the South Korea society. 
 
SCHIEFFER