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UNCLAS SECTION 01 OF 13 TOKYO 002978 
 
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 10/24/08 
 
INDEX: 
 
(1) Prime Minister Aso meets with Chinese leaders: Japan-China 
hotline to be reopened (Mainichi) 
 
(2) Prime minister instructs ruling parties to study raising 
consumption tax after economy recovers (Asahi) 
 
(3) With eye on general election, Aso posits consumption tax hike, 
aiming at displaying leadership, as well as to underscore difference 
from DPJ (Asahi) 
 
(4) New Komeito keeps silence, while concealing its real desire for 
early Lower House dissolution for sake of campaign cooperation 
(Asahi) 
 
(5) North Korea, aiming at obtaining energy aid after delisting, 
takes hard-line stance toward Japan for not paying its share 
(Sankei) 
 
(6) Japan-India nuclear cooperation: Dialogue needed for nuclear 
nonproliferation (Asahi) 
 
(7) NPT at greater risk due to U.S.-India nuclear agreement; Japan 
must take initiative in nuclear nonproliferation (Mainichi) 
 
(8) TOP HEADLINES 
 
(9) EDITORIALS 
 
(10) Prime Minister's schedule, October 23 (Nikkei) 
 
ARTICLES: 
 
(1) Prime Minister Aso meets with Chinese leaders: Japan-China 
hotline to be reopened 
 
Mainichi Online (Full) 
13:16. October 24, 2008 
 
Beijing, Reporter Tamotsu Takatsuka 
 
Prime Minister Taro Aso, who is now visiting China to attend the 
Asia-Europe Meeting (ASEM), on the morning of October 24 separately 
met with President Hu Jintao and Premier Wen Jiabao at the Great 
Hall of the People for about 30 minutes each. This is the first time 
for him to meet with both leaders. They agreed to reopen the hotline 
between the two countries. Leaders of the two countries vowed to 
continue to develop mutually beneficial strategic relationship with 
the aim of building the relationship of trust. They also exchanged 
views on the financial and economic situations, as well as signed a 
Japan-China Consular Agreement designed to improve the protection of 
the citizens of both countries. 
 
This is the fourth bilateral summit with Hu Jintao and second with 
Wen Jiabao this year, if those held during the previous Yasuo Fukuda 
administration are included. Aso took the stance of stressing the 
close relationship between the two countries. 
 
During his meeting with Hu, Aso called for building a relationship 
of trust in which the presence of the leaders of the two countries 
would be prominent. The reopening of the hotline is expected to 
 
TOKYO 00002978  002 OF 013 
 
 
enable the leaders of the two counties to be in immediate and close 
contact, according to a Foreign Ministry source. The hotline between 
the two countries was established when then Premier Zhu Rongji 
visited Japan in October 2000. However, with bilateral relations 
deteriorating due to former Prime Minister Junichiro Koizumi's 
visits to Yasukuni Shrine, it was hardly ever used. 
 
Aso sought countermeasures from the Chinese side regarding the 
incident of poisoned frozen gyoza dumplings made in China, by 
conveying to him Japan's domestic views about food safety. 
 
He also brought up the North Korea issue and confirmed cooperation 
between the two countries at six-party talks for the 
denuclearization of that country. He asked for cooperation from the 
Chinese side for the settlement of the abduction issue as well. 
 
In the meeting with Wen, the two leaders signed a Japan-China 
Consular Agreement, which is designed to improve the protection of 
the citizens of each country, including the event that citizens are 
detained in the other country, the concerned country is obligated to 
notify the consular office of the incident within four days. They 
also exchanged a paper ratifying a Japan-China Treaty on Cooperation 
on Criminal Matters, which enables investigative officials of the 
two countries to exchange information without using a diplomatic 
channel. 
 
Aso gave a speech at a ceremony commemorating the 30th anniversary 
of the Japan-China Peace and Amity Treaty held on the afternoon of 
the same day. He stressed that common benefit is important both for 
Japan and China. Regarding the history issue, he stressed that 
modestly looking back on the past and building the future together 
is the responsibility of the present generation in preparation for 
the next generation. 
 
At the outset of the talks, Wen said, "Your attendance at ASEM is 
the manifestation of your attaching importance to cooperation 
between Asia and Europe, and between Japan and China. We welcome 
your visit to China from the bottom of our hearts." Aso replied, 
"Thank you for your welcoming me. I would like to congratulate you 
on the success of the Beijing Olympics." 
 
(2) Prime minister instructs ruling parties to study raising 
consumption tax after economy recovers 
 
ASAHI (Top Play) (Full) 
October 24, 2008 
 
In compiling a new economic stimulus package, Prime Minister Aso 
instructed the LDP and the New Komeito to look into a mid-term 
program for securing stable fiscal resources to finance social 
security measures. He gave this order with a hike in the consumption 
tax after the recovery of the economy in mind. In the meantime, as a 
measure for regional areas, he also ordered them to consider the 
largest-ever housing loan tax break, by allocating approximately 1 
trillion yen to them from special road-construction funds. He thus 
indicated a stance of doing his utmost to shore up the economy over 
the short term. 
 
The prime minister appears to aim to clarify differences in campaign 
pledges with the DPJ, by putting up economic stimulus measures as 
one of the commitments for the upcoming general election. 
 
 
TOKYO 00002978  003 OF 013 
 
 
He on the 23rd met with LDP Secretary General Kosuke Hori, his New 
Komeito counterpart Natsuo Yamaguchi, and others at the Kantei. The 
two secretaries general briefed him on the ruling parties' plan for 
the new economic stimulus package, which includes an increase in 
highway tolls and a fixed-rate tax cut. 
 
The prime minister ordered them to include the following four items 
in the package: 1) compiling a mid-term tax system program for a 
future hike in the consumption tax; 2) allocating approximately 1 
trillion yen to local governments; 3) implementing the largest-ever 
housing loan tax cut; and 4) reducing the tax burden, by expanding 
areas eligible for depreciation regarding investment for energy 
saving and new energies. 
 
The government and the ruling parties will formally decide on the 
size of the budget and funding resources on the 30th, after 
readjusting the new economic stimulus package. The prime minister 
will release the final plan at a press conference the same day. 
 
After the talks the prime minister said, "Nobody would consider 
hiking the consumption tax when the economy is rapidly losing 
steam."  He also told reporters, "It is clear that when the economy 
has recovered over the mid-term, fiscal resources to finance social 
welfare-related areas, such as nursing care and welfare, will be 
running short. In that sense, it is likely that a hike in the 
consumption tax will be considered." The prime minister thinks that 
it will take three years for the Japanese economy to recover. He 
thus apparently indicated his intention to consider raising the 
consumption tax after putting the economy on a recovery track in 
three years' time. 
 
According to one participant, the prime minister categorically said 
to ruling-party members, "It is not until the economy recovers that 
conditions for a tax hike are met. The consumption tax will serve as 
a stable funding resource. I must make it clear that I will raise 
the consumption tax when conditions are met." He thus reportedly 
instructed the ruling parties to consider mentioning a road map for 
tax system reform, including the consumption tax, in the mid-term 
program. 
 
The DPJ is keeping mum about the consumption tax. It appears that 
another aim of Aso is to highlight differences with the DPJ by 
referring to a consumption tax hike, thereby indicating a stance of 
the LDP, which is tackling tax code reform as a responsible party. 
 
In the meantime, Aso ordered participants to expand the scale of the 
housing loan tax break from the current maximum 1.6 million yen 
deduction from taxable income to the largest-ever amount. The 
largest-ever deduction of 5.875 million yen was implemented in 1999 
and 2000. 
 
Regarding measures to shore up regional areas, the prime minister 
reportedly said, "Use special-purpose road construction funds. They 
can be used without restrictions, if they are reallocated for other 
uses. I will give 1 trillion yen to local governments. If they want 
to build roads, they can do so." 
 
Concerning a hike in highway tolls, Aso said, "The DPJ said that 
they would make expressways toll-free." He then told participants to 
consider far-reaching measures in preparation for the upcoming 
election. The government and the ruling parties agreed to implement 
a time-limited cut in the corporate tax rate targeting small- and 
 
TOKYO 00002978  004 OF 013 
 
 
medium-size businesses. 
 
(3) With eye on general election, Aso posits consumption tax hike, 
aiming at displaying leadership, as well as to underscore difference 
from DPJ 
 
ASAHI (Page 2) (Full) 
October 24, 2008 
 
Prime Minister Aso, who predicts that the Japanese economy would 
require three years to reach as state of recovery, said yesterday 
that the government would raise the consumption tax in the future. 
Aso ventured to step into the "taboo" area of lawmakers by talking 
about a consumption tax hike before a general election. He 
apparently wants to underscore the differences in his policy stance 
from that of the Democratic Party of Japan (DPJ). He is also aiming 
to impress people with his leadership in having the government and 
the ruling coalition lay out a new package of economic stimulus 
measures by the end of this month. 
 
In meeting with Liberal Democratic Party (LDP) Policy Research 
Council Chairman Kosuke Hori, New Komeito Policy Research Council 
Chairman Natsuo Yamaguchi, and others at the Prime Minister's Office 
last evening, Prime Minister Aso said: "If we fail to announce the 
revenue sources, our stance will be the same as the DPJ's." 
 
Although Aso had indicated that he would not hike the consumption 
tax for three years in line with his policy of giving priority to 
first boosting the economy, he asked senior LDP members to draw up a 
plan to raise the tax in the future. His prediction of three years 
to bring about a recovery indicates that the "seal" could be removed 
three years from now. 
 
Lawmakers hesitate to take up the issue of raising the taxes before 
a general election. Former Prime Minister Fukuda once voiced 
eagerness to raise the consumption tax just after assuming office, 
but he sidestepped the issue in the end, saying: "We will consider 
the possibility, with a span of two to three years in mind." Aso, 
however, is aiming to lay the groundwork for Lower House dissolution 
by highlighting the main point at issue with the DPJ. 
 
The DPJ's policy pledges include a 26,000 yen monthly child-rearing 
allowance, state subsidies for individual farm households, and other 
costly measures. Prime Minister Aso has criticized the main 
opposition party since the LDP presidential election campaign, 
saying: "Calculated roughly, 17-20 trillion yen will be needed to 
implement its pledges, but the DPJ has yet to explain where the 
fiscal resources will come from." 
 
In a policy speech on Sept. 29, Aso unprecedentedly posed questions 
to the DPJ about fiscal resources to realize its policy pledges, but 
DPJ President Ozawa said the party would completely restructure the 
government's fiscal management structure. The exchange of words 
between them went nowhere. 
 
The new economic package due out later this month includes a number 
of pork-barrel-nature tax-cut measures, such as flat-sum tax cuts 
and a reduction of taxes on home mortgages. The government plans to 
finance these measures with reserve funds for the time being. But if 
it can announce specifics on where the necessary revenues would come 
from, the package will become more acceptable to people. With the 
difference stressed between the LDP and the DPJ over the issue of 
 
TOKYO 00002978  005 OF 013 
 
 
fiscal resources, the way will be paved for the Lower House 
election. 
 
In accordance with this calculation, the government appointed 
National Conference on Social Security Chairman Hiroshi Yoshikawa as 
a private-sector member of the Council on Economic and Fiscal Policy 
early this month. A close aide to the prime minister said: "We 
tapped him in anticipation of his playing a mediatory role between 
the economic panel and the social security panel." 
 
The social security panel announced estimated medical and care 
costs, as well as the case of introducing a system of using tax 
revenues to pay basic pension benefits. To cover these expenses, it 
would become necessary to hike the consumption tax to a level as 
high as 20 PERCENT . An aide to the prime minister said: "Discussion 
of fiscal resources should be conducted in the social security 
council, and the economic panel should come up with a plan for 
consumption tax hike." 
 
The theme of discussion in the first meeting on Oct. 17 of the 
economic panel after Prime Minister Aso assumed office was how to 
reform the social security system, the tax system, and the fiscal 
system simultaneously. In this meeting, Aso made this statement: 
"When asked about the fiscal resources for our economic stimulus 
measures, we must properly explain where the revenues would come 
from. Our party, as the governing party, must prepare itself to be 
able to do so." 
 
Citing in this meeting the results of the opinion poll conducted in 
2001, when he was LDP Policy Research Council chairman, Aso said: 
"Some 50 PERCENT  of respondents said that it would be unavoidable 
to raise the consumption tax to 10 PERCENT  to finance social 
security and pension payments." He showed that the public can be 
expected to show understanding about a consumption tax hike to pay 
social security outlays. 
 
Even so, the consumption tax rate has stayed at 5 PERCENT  since 
¶1997. The focus of attention is on whether Aso would be able to step 
into this difficult challenge, an area in which even the former 
popular prime minister, Junichiro Koizumi, refrained from setting 
foot. An aide to Aso said: "I think there is no other lawmaker than 
Prime Minister Aso who can raise the consumption tax. He can be 
expected just before the general election to come up with a policy 
leading to raising the consumption tax." 
 
(4) New Komeito keeps silence, while concealing its real desire for 
early Lower House dissolution for sake of campaign cooperation 
 
ASAHI (Page 4) (Abridged slightly) 
October 24, 2008 
 
By Hisashi Ishimatsu, Hiroshi Samejima 
 
Prime Minister Taro Aso has been unable to determine when to 
dissolve the Lower House, while the New Komeito, which has loudly 
called for early dissolution of the chamber, is now quiet. The 
party, though irritated with the prime minister's indecisiveness, 
cannot afford to suggest a departure from the ruling coalition. As 
such, the New Komeito seems to have no other option but to wait 
patiently for the prime minister's decision, believing that he will 
dissolve the chamber at the end of October. 
 
 
TOKYO 00002978  006 OF 013 
 
 
The New Komeito held an executive meeting on Oct. 23. In the 
session, the members confirmed the maintenance of the party's 
campaign setup for the envisioned election on Nov. 30. The voice of 
Secretary General Kazuo Kitagawa, who regards himself as Prime 
Minister Aso's close friend, was constrained. He simply said: "The 
LDP is split over whether to dissolve the Lower House." 
 
The New Komeito still pins hopes on Lower House dissolution at the 
end of October when additional economic measures would be put 
together and the refueling assistance legislation is expected to 
clear the Diet. The New Komeito relies heavily on its local chapters 
and its support organizations and requires a long period of time 
making preparations for an election. To such a party, it is 
difficult to take the heat out of its organizations that are in high 
gears for an election, and once they geared down, it is even more 
difficult to heat them up again. The party's powerful support 
organization, Soka Gakkai, too, thinks early dissolution provides a 
chance of victory, with a senior member saying, "The cabinet's 
support rates are somewhat low, but we still can turn the tables 
with thorough preparations." 
 
The party eyes a flat-sum tax cut as a showcase step, but there is 
no guarantee that it can win a huge tax cut to satisfy low- and 
middle-income earners, the party's core supporters, in the year-end 
tax reform discussion. New Komeito Representative Akihiro Ota thinks 
his party should assert that there will be no fixed-amount tax cut 
unless the New Komeito wins the next election. 
 
To begin with, it was the New Komeito that opened the door to Lower 
House dissolution for a snap general election. Former Prime Minister 
Yasuo Fukuda walked off the job because the New Komeito demanded the 
dissolution. The party pressed Fukuda hard to dissolve the Lower 
House before the end of the year from its desire to focus on next 
summer's Tokyo Metropolitan Assembly election. 
 
The party had envisioned replacing Fukuda with the nationally 
popular Aso as the figurehead of the ruling coalition and holding a 
general election under him. The plan came true up until the 
establishment of the Aso administration. Prime Minister Aso gave a 
nod to the flat-sum tax cut and the Soka Gakkai geared up, assuming 
that the election would take place in early November. But the 
cabinet's support ratings remained unexpected low, and the financial 
crisis also occurred. Given the situation, the prime minister 
dropped a plan to dissolve the Lower House at the beginning of the 
current extraordinary Diet session. 
 
The New Komeito pressed former Prime Minister Fukuda hard for 
dissolving the lower chamber, but it does not show any signs of 
doing so for Aso now. A loud call for early dissolution in the 
closing days of the Fukuda administration left ill feelings between 
the LDP and its coalition partner. Another invasion of the prime 
minister's right to dissolve the Lower House might harm the 
relationship between the two parties beyond repair. 
 
A senior New Komeito lawmaker commented: "Even if the prime minister 
decides to postpone the dissolution, we will have to accept it. We 
cannot press him by dangling the possibility of dissolving the 
coalition arrangement. LDP votes are especially vital for 
Representative Ota and Secretary General Kitagawa who are scheduled 
to run in single-seat constituencies. As long as the New Komeito 
cooperates with the LDP in campaigns, the former cannot think of 
dissolving the coalition. Further, the party cannot find anyone who 
 
TOKYO 00002978  007 OF 013 
 
 
can replace Prime Minister Aso as the "face" of the LDP-New Komeito 
administration. 
 
At the same time, Aso's failure to meet the New Komati's 
expectations for an early dissolution is likely to result in 
mistrust in the prime minister. Secretary General Kitagawa, who has 
served as a go-between, is under heavy pressure from within the 
party and Soka Gakkai because the prime minister has been slow to 
determine when to call the next general election. If the major 
opposition Democratic Party of Japan takes a confrontational stand, 
calls for Diet testimony by former Komeito Chairman Junta Yano and 
Soka Gakkai executives might grow louder. 
 
"With a delayed election, we won't be able to assist the LDP because 
we will be busy just taking care of our own campaigns." There is no 
guarantee that these words by a New Komeito executive intended to 
apply pressure on Aso by alluding to an ill effect on campaign 
cooperation will reach the prime minister. 
 
(5) North Korea, aiming at obtaining energy aid after delisting, 
takes hard-line stance toward Japan for not paying its share 
 
SANKEI (Page 7) (Full) 
October 24, 2008 
 
By Takashi Arimoto in Washington 
 
In connection with the nuclear issue, North Korea is taking a 
hard-line stance toward Japan's paying its share of energy 
assistance promised that country.  After having achieved its 
long-time goal of being removed from the U.S. list of states 
sponsoring terrorism (SST) list, North Korea is now reacting 
strongly toward the Japanese government for holding back aid unless 
the abduction issue first makes progress. The DPRK even wants to 
exclude Japan from the Six-Party Talks on the nuclear issue.  A U.S. 
government-source said the U.S. is trying to solve the problem of 
Japan not providing energy aid by requesting Australia to supply 
Japan's share. There is new concern, however, as to how seriously 
North Korea will now work on the abduction issue. 
 
The Six-Party Agreement in February 2007 stipulated that financial 
and energy aid equivalent to one million tons of heavy oil would be 
provided to North Korea in exchange for its declaration of its 
nuclear program and the disablement of its nuclear facilities.  The 
share of each country is not specifically stated in the agreement, 
but there is an implicit understanding that five countries would 
equally share 200,000 tons (equivalent to approximately 16 billion 
yen) (of heavy oil). 
 
Japan, because of its abduction issue with North Korea, has been 
saying that it would participate (in providing aid) as soon as 
possible, once the situation was settled.  Prime Minister Taro Aso 
told President Bush who notified him on the removal of North Korea 
from the SST list that (Japan) would not participate in the energy 
aid, since there had been no progress in resolving the abduction 
issue. 
 
North Korea reacted sharply to this and demanded that Japan should 
be excluded from the Six-Party Talks.  A source in the talks, 
referring to this reaction, pointed out: "North Korea knows well 
that the U.S. would never agree to the exclusion of Japan, which 
would lead to a collapse of the Six-Party Talks.  After the country 
 
TOKYO 00002978  008 OF 013 
 
 
was successfully de-listed from the SST list, North Korea is just 
taking the offensive for quick practical gains during the term of 
the Bush administration." 
 
The U.S. understands Japan's "special situation," but it has 
requested Australia to provide Japan's share to solve the problem of 
the energy aid.  The U.S. is seeking Australia's participation in 
providing energy aid from the view point of regional security. There 
is also the fact that Australia has already provided some assistance 
to North Korea, but the U.S. remains reluctant to change the 
framework of the Six-Party Talks by adding Australia. 
 
U.S. State Department Spokesman McCormack took an optimistic view 
about the resolution of the issue by saying that the five countries 
have strong confidence that they can fulfill their duty (of 
providing heavy oil as aid).  However, one U.S. government source 
said: "Although we hope Japan-North Korea negotiations will resume 
before the next round of Six-Party Talks, we are concerned as to how 
seriously North Korea will engage in them. 
 
(6) Japan-India nuclear cooperation: Dialogue needed for nuclear 
nonproliferation 
 
ASAHI (Page 11) (Full) 
October 24, 2008 
 
Yukifumi Takeuchi, senior writer 
 
The Oct. 22 Japan-India summit did not step into the issue of 
concluding a nuclear agreement on cooperation in such areas as 
atomic power generation. However, the United States and India have 
now reached a nuclear accord, which has now come into effect. In 
addition, some other countries are also apparently geared up to make 
market inroads. Meanwhile, it also looks like there will be strong 
pressure from within Japan's business community. However, a negative 
impact of nuclear cooperation between the United States and India is 
already looming. The Japanese government will have to make a 
difficult decision. 
 
The Nuclear Suppliers Group (NSG), including Japan, has so far taken 
a 'north wind' policy of embargoing nuclear-related materials to 
India, which is not a signatory of the Nuclear Nonproliferation 
Treaty (NPT). India has therefore been falling behind in developing 
atomic power plants. In September, however, the NSG accepted the 
option of calling off its embargo on nuclear fuel and reactors to 
India in the wake of the U.S.-India nuclear deal. "It's a sunshine 
policy toward India," explains a senior official of the Foreign 
Ministry. 
 
The International Atomic Energy Agency (IAEA) also endorsed the NSG 
decision, because the IAEA thought it would be better to inspect at 
least commercial nuclear facilities and expand the network of 
supervision for nuclear nonproliferation instead of leaving India 
outside the nonproliferation regime. Nuclear development is under 
way in such countries as Iran and Pakistan, so the IAEA thought it 
would be effective to involve India in order to sew up one tear in 
the nonproliferation regime. 
 
In addition, given the exhaustion of petroleum and the progress of 
global warming, the IAEA also thought it would be better to let 
India build more nuclear power plants instead of having it 
mass-consume fossil fuels. The United States and some other 
 
TOKYO 00002978  009 OF 013 
 
 
countries want India to become a power strong enough to vie with 
China. If India grows into a huge nuclear market, there will be 
business chances. This is why such countries as France are following 
the United States. 
 
Japan is the only atomic-bombed nation. The NSG's acceptance itself 
was therefore a tough choice for Japan. If Japan enters into an 
agreement with India at this point, such a course of action would 
face a strong backlash from the public. 
 
However, the government is also beginning to think it would be in 
the medium- and long-term interests of Japan to conclude an 
agreement and cooperate with India. 
 
Meanwhile, the sunshine policy is having more repercussions. 
Pakistan announced in the middle of this month that it had reached 
an agreement with China on bilateral cooperation on building nuclear 
power plants. Obviously, this is a response tot the U.S.-India deal. 
Pakistan is not an NPT signatory and was a black-market player. 
 
The NPT Review Conference is scheduled to take place in two years. 
Ahead of this event, Iran, which is an NPT signatory, would also cry 
out against that move. 
 
There are some doubts about India as well. Michael Krepon, a U.S. 
expert on nuclear disarmament and nonproliferation, notes that 
India's nuclear test in 1998 yielded an insufficient result. Krepon 
presumes that India would need to conduct another nuclear test. He 
criticized the U.S.-India nuclear pact, claiming that it remains 
vague about India resuming nuclear testing. "If Japan is going to 
push for nuclear cooperation with India," he added, "that should be 
preconditioned on signing the Comprehensive Nuclear Test Ban Treaty 
(CTBT)." 
 
Of course, it would be difficult to persuade India to sign the CTBT, 
which the United States has yet to ratify. However, the United 
States could change its response to the CTBT if the Democratic Party 
takes office and calls the shots in Congress. Japan should endeavor 
to shape international public opinion. At the same time, Japan 
should try every possible means and tenaciously push ahead with 
nuclear disarmament and nonproliferation dialogue with India. 
 
(7) NPT at greater risk due to U.S.-India nuclear agreement; Japan 
must take initiative in nuclear nonproliferation 
 
MAINICHI (Page 4) (Abridged slightly) 
October 23, 2008 
 
By Takuji Nakao, Vienna office 
 
A nuclear embargo against India, which has conducted nuclear weapons 
tests, was lifted last month for the first time in over 30 years. 
India, which is not a party to the Nuclear Nonproliferation Treaty 
(NPT), is now allowed to import atomic power technology and nuclear 
fuel. Given the fact that no questions were raised about its 
possession of nuclear weapons, this is tantamount to India being 
recognized as a nuclear power by the international community. I 
believe the NPT is indeed in crisis. This might end up dampening the 
motivation of countries making serious efforts in nuclear 
nonproliferation and making North Korea and Iran -- countries 
suspected to have nuclear weapons programs - even more arrogant. As 
the world's only atomic-bombed country, Japan should play an active 
 
TOKYO 00002978  010 OF 013 
 
 
role in maintaining the NPT regime. 
 
The latest series of developments was triggered by the United 
States. In 2005, the United States began talks with India on a 
bilateral nuclear agreement aimed at nuclear trade with that 
country. The pact was signed on Oct. 10 and immediately came into 
effect. Behind the move is the eagerness of American companies to do 
nuclear business with India. The Bush administration kept pushing 
the Congress for speedy deliberations in order to ratify the pact 
before it leaves office in January 2009. As if to vie with the 
United States, France, too, inked a nuclear pact with India last 
month. Russia is also conducting talks with India. 
 
To the United States, the largest obstacle was the Nuclear Suppliers 
Group (NSG, with a membership of 45 countries, including Japan) that 
regulates nuclear exports. Established in response to a nuclear test 
carried out by India in 1974, the NSG is a framework that regulates 
nuclear trade in order to prevent nuclear proliferation. NSG members 
met in September in Vienna. Their discussion on the second day of 
the meeting lasted until 2 o'clock in the morning, an unusual case. 
 
In the session, such countries as Australia and New Zealand demanded 
India's assurance that it would not conduct nuclear tests. Calling 
representatives of countries opposing (an NSG waiver) into a 
separate room, the United States pressed them, asking, "Should 
India, a country with a population of 1 billion, be left as is?" The 
countries cautious about such a decision were steamrollered by the 
United States, and Japan failed to stop it. On Sept. 6, the NSG 
finally decided to allow a waiver for India, a non-NPT signatory, 
opening the door for its members to export nuclear fuel and 
technology to that country. 
 
What is particularly troublesome is that the imports of nuclear fuel 
for civilian-sector nuclear power generation would make it possible 
for India to use home-grown natural uranium to produce nuclear 
weapons. An anti-waiver country predicted that the measure would 
increase India's capability to produce nuclear weapons from the 
current level of seven to 40 to 50 a year. The International Atomic 
Energy Agency (IAEA) Board of Governors approved in August India's 
nuclear inspection agreement with the nuclear watchdog. India is 
expected to agree to open only 14 out of 22 nuclear facilities to 
the IAEA. 
 
Meanwhile, the NPT is calling for the efforts of the five nuclear 
powers (United States, Russia, Britain, France, and China) for 
nuclear disarmament. India has only announced the continuation of 
its moratorium on nuclear testing. The United States explained that 
India, the world's largest democracy, would join the mainstream of 
nuclear nonproliferation. It can be said that the NPT effectively 
confirmed the possession of nuclear weapons of India, a non-NPT 
state. 
 
Japan's response was problematical, as well. Throughout the NSG 
negotiations, Japan exhibited an ambiguous attitude, with then Chief 
Cabinet Secretary Nobutaka Machimura saying, "We will judge it 
comprehensively." True, a shift from coal-fired power generation to 
atomic power generation can contribute to containing global warming, 
as was asserted by Japan. But that does not mean nuclear 
nonproliferation can wait on the sidelines. 
 
India's credibility could be called into question, as well. The 
Institute for Science and International Security, a U.S. 
 
TOKYO 00002978  011 OF 013 
 
 
private-sector think tank, has shed light on the Indian government's 
lax business practices that include its disclosing of the designs 
for uranium-enrichment centrifuges to bidders. The Institute has 
pointed out, "The management of nuclear data is unbelievably 
sloppy." 
 
Such questions all concern the basic issue of nuclear 
nonproliferation. But which country should be the one to give candid 
advice to the world's sole superpower, the United States, which has 
made a clear distinction in its response between India, its ally, 
and Iran and North Korea, the "rogue states." That role should be 
played by Japan, whose national policy is to eliminate nuclear 
weapons. It is necessary to give advice even to the United States 
when the NPT regime is shaking. 
 
The NPT regime, which is reviewed every five years, is at a 
crossroads. Now that the waiver for India has been adopted, the NPT 
review conference to be held in New York in 2010 is likely to fall 
into confusion. 
 
At this conjuncture, Yukiya Amano, ambassador to the Permanent 
Mission of Japan to the International Organizations in Vienna, has 
decided to run to become the next IAEA secretary general (beginning 
in December 2009). I believe Japan's leadership and comprehensive 
ability in nuclear nonproliferation is now being tested. 
 
(8) TOP HEADLINES 
 
Asahi: 
Aso instructs ruling parties to study raising consumption tax 
 
Mainichi: 
Government estimates consumption tax hike up to 15.5 PERCENT 
necessary 
 
Yomiuri: 
Maximum 94 trillion yen seen necessary for medical, care costs in 
fiscal 2025 
 
Nikkei: 
Japan, U.S., Europe to move to set up mechanisms for disposing of 
losses at financial institutions 
 
Sankei: Tokyo Shimbun: 
Woman sickened by Cup Noodle soup: Nisshin to recall 500,000 cups 
 
Akahata: 
Grand coalition between LDP and DPJ will destroy Constitution, says 
Chairperson Shii 
 
(9) EDITORIALS 
 
Asahi: 
(1) ASEM heavily responsible for making effort to put end to 
financial crisis: 
(2) Estimate for medical cost: Show road map to increased burden 
 
Mainichi: 
(1) Prime minister's night meetings: Self-awareness as public 
official questioned 
(2) Estimate for medical, and care costs: Reform scenario without 
words 
 
TOKYO 00002978  012 OF 013 
 
 
 
Yomiuri: 
(1) Medical services, nursing care, pensions: We want to see deeper 
discussions 
(2) Death of MSDF member during exercise: Correct bad habits and 
proclivity 
 
Nikkei: 
(1) Take economic effects, instead of election into account, when 
mapping out additional economic stimulus package 
(2) Emergency medical service system that can give peace of mind 
needed 
 
Sankei: 
(1) Hospitals refuse to accept pregnant woman: Improve emergency 
system 
(2) Easing market-value accounting system: Effort needed to secure 
transparency 
 
Tokyo Shimbun: 
(1) Medical and nursing care cost: Improve the system to live up to 
increased burden 
(2) Drowning of inmate: Situation in prisons is still unknown 
 
Akahata: 
(1) It has been 80 years since the Great Depression: Make most of 
the lessons learned from history 
 
(10) Prime Minister's schedule, October 23 
 
NIKKEI (Page 2) (Full) 
October 24, 2008 
 
07:31 
Took a walk around his private residence in Kamiyama-cho. 
 
11:02 
Met at the Kantei with participants in the Ship for Southeast Asian 
Youth Program and others. 
 
11:49 
Met Foreign Ministry's Vice Minister Yabunaka, Deputy Foreign 
Minister Sasae, and Economic Affairs Bureau Director General Otabe. 
Yabunaka and Sasae stayed behind. Joined by Asian and Oceanian 
Affairs Bureau Director General Saiki. 
 
13:46 
Attended a garden party at the Imperial Garden. 
 
15:25 
Met Foreign Minister Nakasone and Finance Minister Nakagawa at the 
Kantei. Followed by LDP Tax Commission Chairman Tsushima. 
 
16:10 
Met Foreign Ministry's Sasae, Saiki, Vice Minister of Finance for 
International Affairs Shinohara, and METI Deputy Vice Minister 
Ishige, with Deputy Chief Cabinet Secretary Matsumoto present. 
 
16:42 
Met Toyama Governor Ishii. 
 
17:32 
 
TOKYO 00002978  013 OF 013 
 
 
Met Japan Credit Rating Agency President Utsumi. Followed by LDP 
Policy Research Council Chairman Hori, New Komeito Policy Research 
Council Chairman Yamaguchi, Project Team on Global Financial Crisis 
Chairman Yanagisawa, Economic and Fiscal Policy Minister Yosano, and 
others. 
 
20:23 
Let Haneda Airport by a government plan for the ASEM summit. 
 
Night 
Arrived at the international airport in Beijing. Stayed at a hotel. 
 
SCHIEFFER