Cablegate: Japanese Morning Press Highlights 02/26/10

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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 02/26/10

INDEX:

1) Top headlines
2) Editorials

Futenma issue:
3) Gov't to propose inland Camp Schwab plan to U.S. next month
(Yomiuri)
4) Gov't prepares second plan in case U.S. rejects first one
(Yomiuri)
5) SDP also proposes relocation site within Japan (Tokyo Shimbun)
6) Hirano vows Futenma conclusion by end of May (Nikkei)

Defense & security:
7) Mini-Security subcommittee meeting discusses "sympathy budget"
(Yomiuri)

Foreign relations:
8) Japan, U.S. to begin talks on Iran's nuclear program next week
(Nikkei)

Toyota's travails:
9) Toyota proposes joint investigation of ETCS (Yomiuri)
10) Maehara: "Toyota problem will not affect free trade between
Japan and U.S." (Mainichi)

Politics:
11) Prime minister aims for Japan's accession to Hague Convention
(Tokyo Shimbun)

Economy:
12) METI launches discussions on vision of industrial structure
(Asahi)
13) Vice foreign minister says Australia's proposal to IWC
regrettable (Asahi)
14) Research whaling becoming source of diplomatic controversy
(Nikkei)

Articles:

1) TOP HEADLINES

Asahi:
Toyota still faces hurdles after president's testimony at U.S.
congressional hearing

Mainichi:
"Secret pact" among government agencies on building power plants
hindering environmental policies

Yomiuri:
Toyota to call on U.S. auto industrial group for joint probe of
electronic throttle system problem

Nikkei:
Daiichi Sankyo to make generic drugs in Japan

Sankei:
Hatoyama indicates Korean schools are unlikely to be covered by
tuition-free program

Tokyo Shimbun:

TOKYO 00000390 002 OF 008

Figure skating - women's free skate today

Akahata:
In Toyota president's testimony at a U.S. congressional hearing,
chairman claims that Toyota ignored report on sudden acceleration

2) EDITORIALS

Asahi:
(1) Toyoda testimony: "Kaizen" essential to make the company's
management more open
(2) Labor unions and elections: Dependence on labor unions outdated

Mainichi:
(1) Toyoda testimony: Truth is still shrouded in fog
(2) New interpretation of "agreement" on restricting foreign sumo
wrestlers inappropriate

Yomiuri:
(1) Congressional testimony by Toyota president: Sincere efforts
necessary for restoring public trust
(2) Economic recovery is the key to increased hiring

Nikkei:
(1) Fundamental reform essential for Toyota to restore public trust

(2) Give impetus to growing mood of peace in Darfur

Sankei:
(1) LDP returns to Diet deliberations: DPJ's efforts to cover up
allegations must be pursued
(2) Toyota president's testimony: Create a sound electronic control
system to eliminate concerns

Tokyo Shimbun:
(1) Toyota hearing: Company must make a fresh start based on bitter
lessons
(2) Panel recommendation for scrapping statute of limitations
contains many problems

Akahata:
(1) Toyoda testimony before U.S. Congress: Company needs to
thoroughly reexamine itself as a manufacturer

3) Futenma relocation: Gov't to propose Camp Schwab inland plan to
U.S. next month

YOMIURI (Page 1) (Full)
February 26, 2010

On the pending issue of relocating the heliport functions of the
U.S. Marine Corps' Futenma Air Station from its current location in
Japan's southernmost island prefecture of Okinawa, the government
will formally propose its most promising plan to the U.S. government
in March. This Futenma relocation plan, revealed yesterday, is to
build a 500-meter-long tarmac on the premises of Camp Schwab,
another U.S. military base straddling the Henoko area of the
prefecture's northern coastal city of Nago and other municipalities
in the prefecture, and to train Okinawa-based Marine Corps troops on
other islands in Japan. The U.S. government, however, is expected to
oppose this plan for such reasons as a possible impact on the
training exercises. The government is therefore considering

TOKYO 00000390 003 OF 008

proposing another plan as the second best one, which is to construct
a 1,500-meter-long airstrip in an inland area of the base.

Defense Minister Kitazawa attended a party held yesterday in Tokyo
for a House of Representatives member of the People's New Party, one
of the ruling Democratic Party of Japan's two coalition partners,
where he touched on the PNP's advocacy of this relocation plan and
revealed that the government was considering a plan to relocate the
Futenma airfield facility to an inland area of Camp Schwab as the
most promising plan. "The PNP's direction is basically the same (as
mine)," Kitazawa said, "and we're now moving in that direction."

The idea of building a land-based replacement facility for Futenma
airfield on the premises of Camp Schwab was once discussed at a
bilateral consultative meeting between the Japanese and U.S.
governments in 2005. At the time, the U.S. government rejected the
idea, reasoning that the U.S. military's training exercises would be
affected and that Futenma relocation to Camp Schwab's inland area
would end up increasing aircraft noise and environmental
deterioration. At that time, the U.S. government pointed to
technical drawbacks, asserting that it would be difficult to use the
shooting range on Camp Schwab. The Japanese government is therefore
considering building a shooting range on another U.S. military base
in Okinawa Prefecture at its own expense.

Specifically, the Japanese government is considering the island of
Tokunoshima in Kagoshima Prefecture and outlying islands in Okinawa
Prefecture as candidate sites for training exercises.

However, the U.S. government is highly likely to disapprove of any
other plans, maintaining that the current relocation plan to
relocate Futenma airfield to a coastal area of Camp Schwab based on
a 2006 bilateral agreement is the best option. Meanwhile, Okinawa
Prefecture and Nago City have been calling for the Futenma facility
to be relocated outside Japan or outside Okinawa. The leaders of
three local communities, including Nago City's Henoko district,
filed a petition with the government yesterday against the option of
building a land-based facility on Camp Schwab.

4) Futenma relocation: U.S. negative on inland siting option

YOMIURI (Page 4) (Full)
February 26, 2010

The government is giving heed to the idea of relocating the U.S.
military's Futenma airfield facility from its current location in
Okinawa Prefecture's central city of Ginowan to an inland area of
Camp Schwab, another U.S. military base straddling the island
prefecture's northern coastal city of Nago and other municipalities
in the prefecture. This inland plan has now become the most likely
option. This is because that inland area is geographically close to
Camp Schwab's coastal area, the currently planned relocation site
for Futenma airfield under an intergovernmental agreement reached
between Japan and the United States. The government judged that it
can easily make to the United States the claim that the U.S.
military will be able to maintain its deterrence even if Futenma
airfield is relocated to the inland area.

The idea of siting an alternative facility for Futenma airfield in
an inland area of Camp Schwab is now being mulled by Chief Cabinet
Secretary Hirano and Defense Minister Kitazawa. In the government,
however, few believe that the U.S. government will accept a plan

TOKYO 00000390 004 OF 008

other than the current one to relocate the Futenma airfield to a
coastal area of Camp Schwab in the city of Nago, which is based on
an intergovernmental agreement of 2006. The government is therefore
looking into the feasibility of two options: 1) building a
500-meter-long runway in an inland area of Camp Schwab and
relocating to Japan's outlying islands the on-base training
exercises for which this runway is too short; and 2) constructing a
1,500-meter-long airstrip in an inland area of Camp Schwab. The
government is thinking of proposing the second option should the
U.S. government reject the first one.

However, the U.S. government has been consistently negative about
the option of laying down a land-based tarmac on the premises of
Camp Schwab. Besides, Okinawa is strongly opposed to relocation of
the Futenma facility to Nago. A senior Defense Ministry official
said: "In the end, the Futenma airfield will remain where it is" if
the inland plan is rejected. There is growing resignation.

5) SDP will also propose Futenma relocation sites within Japan

TOKYO SHIMBUN (Page 2) (Full)
February 26, 2010

The proposals to be submitted by the Social Democratic Party (SDP)
to the Okinawa base issues examination committee of the government
and the ruling parties on the relocation of the U.S. forces' Futenma
Air Station (in Ginowan City, Okinawa) have been revealed. While its
first option is relocation out of Japan to the U.S. territory of
Guam or Tinian in the Commonwealth of the Northern Mariana Islands,
relocation out of Okinawa to mainland Japan will also be included if
the first option is not approved. Coordination is underway to
identify six or seven specific relocation sites within the country.

The SPD's proposals will consist of a Plan A - relocation to Guam or
Tinian, Plan B - relocation to Guam plus rotation of training
exercises on mainland Japan, and Plan C - relocation to mainland
Japan. Plans A and B will require the building of infrastructure in
the relocation sites or providing high-speed ships to the U.S.
forces for troop transfers.

Plan C calls for selecting the relocation site from Self-Defense
Forces bases or local airports outside of Okinawa. The use of the
new U.S. military facility will be limited to 15 years or so. The
eastern area of Tomakomai (Hokkaido), the Maritime Self-Defense
Force's Omura air base (Nagasaki Prefecture), Saga airport (Saga
Prefecture), and other locations have emerged as candidate sites,
but there are objections in the party to naming specific
localities.

All three plans will allow ad hoc use of the Futenma Air Station for
the U.S. forces' training and supplies or in an emergency even after
the base's closure. They also call for the deployment of the Ground
Self-Defense Force to provide deterrence after the U.S. Marines are
withdrawn from Okinawa.

The SDP had planned to only submit plans for relocation out of
Japan, but the party's executive meeting on Feb. 25 authorized SDP
members of the examination committee to submit plans for relocation
to the Japanese mainland as their personal proposals.

6) Chief Cabinet Secretary Hirano tells SDP leader Futenma
relocation decision will be made by May

TOKYO 00000390 005 OF 008

NIKKEI (Page 2) (Full)
February 26, 2010

Chief Cabinet Secretary Hirofumi Hirano had dinner with Social
Democratic Party (SDP) leader Mizuho Fukushima at a Japanese
restaurant in Tokyo on the evening of Feb. 25. The two discussed the
relocation of the U.S. forces' Futenma Air Station in Okinawa and
other issues. Hirano told Fukushima that a relocation site "will be
selected by May; this is an issue that bears on the fate of the
administration." At a news conference on Feb. 24, Fukushima made
comments on the deadline for making a decision, saying "the timing
is secondary to a true solution to the problem."

Fukushima stressed (at the dinner) that "great consideration should
be given to the feelings of the Okinawan people," but Hirano
responded with, "We will study the issue from scratch."

7) Discussions begin on "sympathy budget"

YOMIURI (Page 4) (Full)
February 26, 2010

The governments of Japan and the United States conducted a
mini-Security Subcommittee meeting of foreign and defense officials
at the Foreign Ministry yesterday. The event is part of talks to
deepen the bilateral alliance on the occasion of the 50th
anniversary of the revision of the U.S.-Japan Security Treaty. The
two countries have also begun discussions on a review of Japan's
host nation support (omoiyari yosan, literally "sympathy budget")
for U.S. forces in Japan.

8) Japan, U.S. to discuss Iranian nuclear issue next week

NIKKEI (Page 2) (Full)
February 26, 2010

The governments of Japan and the United States yesterday started
making arrangements for a plan to discuss the Iranian nuclear issue
in Tokyo next week. Deputy Secretary of State James Steinberg is
expected to visit Japan on March 4 and hold talks with Foreign
Minister Katsuya Okada and other officials.

9) Toyota to call on U.S. auto industrial group for joint probe of
electronic throttle-control system problem

YOMIURI (Top Play) (Excerpt)
February 26, 2010

Toyota Motor Corp. revealed yesterday that it would ask the American
Automobile Manufacturers Association to jointly probe the problem of
the electronic throttle-control system (ETCS). The ETCS is a
suspected cause of the problem of unintended sudden acceleration,
which has caused accidents. Toyota aims to regain consumers' trust
by conducting a more objective joint investigation with a
third-party organization to which rival companies belong. There have
also been complaints of sudden acceleration in the case of other
manufacturers' cars. Therefore Toyota intends to call on the U.S.
association to jointly probe ETCS problems of other companies'
vehicles as well.

10) Transport minister: I am not worried about impact of Toyota

TOKYO 00000390 006 OF 008

issue on Japan-U.S. relations

MAINICHI (Page 4) (Full)
February 26, 2010

Land, Infrastructure, Transport and Tourism Minister Seiji Maehara
spoke yesterday on Toyota Motor corp. President Akio Toyoda's
testimony before a U.S. congressional committee: "It was very good
that he attended the hearing." In reference to the impact of the
Toyota recall issue on Japan-U.S. relations: he said: "I met U.S.
Ambassador John Roos the other day, and we affirmed that this issue
should not be allowed to distort free trade between Japan and the
U.S. I am not worried (about a negative impact)."

Economy, Trade and Industry Minister Masayuki Naoshima also
commented: "The president offered his sincere apology." But he
added: "I think it will take a little more time" until the criticism
in the U.S. calms down.

11) Government to aim at acceding to Hague Convention; Hatoyama
orders legislative measures

TOKYO SHIMBUN (Page 1) (Full)
February 26, 2010

Given the increasing number of cases in which a Japanese parent
moves a child outside the country without the consent of the other
parent after an international marriage ends in divorce, the
government decided yesterday to aim at acceding swiftly to the Hague
Convention on the Civil Aspects of International Child Abduction,
which prescribes a system to return the abducted child to the
country of his or her habitual residence. Prime Minister Yukio
Hatoyama, calling Foreign Minister Katsuya Okada and Justice
Minister Keiko Chiba to the Prime Minister's Official Residence
(Kantei) yesterday, instructed them to expedite the process of
establishing a law specifying a set of procedures for reclaiming
abducted children.

"The world is beginning to regard Japan as a peculiar country," the
Prime Minister said to the press corps at the Kantei last night. "It
is important to reach a conclusion as soon as possible regarding the
Hague Convention in order to show that is not the case." He also
said, "It is not possible to do so during the current Diet session,"
indicating that Japan's accession to the pact will not occur until
2011 or later.

The Hague Convention was adopted by the Hague Conference on Private
International Law in 1980 and it entered into force in 1983.
Eighty-one countries, including the United States and European
countries, are signatories to the convention. Japan alone among the
group of seven industrialized countries has not signed the treaty.
The United States and European countries have repeatedly urged the
Japanese government to accede to the convention.

During his visit to Japan earlier this month, U.S. Assistant
Secretary of State Kurt Campbell pressed Tokyo to swiftly join the
convention, saying: "The U.S. Congress, too, is concerned about the
matter. It might escalate into a major issue in U.S.-Japan
relations."

At the same time, there are many hurdles before acceding to the
convention. Domestic violence by the former husband is said to be

TOKYO 00000390 007 OF 008

behind many cases of child abduction.
Cautious views are dominant in the government. In Japan custody of
the child is often awarded to the mother after a marriage ends in
divorce. Another hurdle is the difference in views of the family
between Japan and Western countries. "The situation in Japan is such
that it can't accede to the convention for a year or two," a Foreign
Ministry official said.

12) METI to draw up vision for industrial structural change

ASAHI (Page 6) (Full)
February 26, 2010

The Ministry of Economy, Trade, and Industry (METI) has launched
discussions toward drawing up a "vision of industrial structure" for
2020. The first meeting of the Industrial Competitiveness
Subcommittee of the Industrial Structure Council was held on Feb.
25. The subcommittee will meet about four more times and draw up a
vision in May.

At the meeting on Feb. 25, METI gave a report on the present state
and issues of Japan's industry, indicating that "the decline in
Japan's economic power is a structural problem." Japanese companies
used to enjoy around 80 percent market share for such products as
liquid crystal display panels, DVD players, and lithium batteries,
but their market share has declined rapidly from the second half of
the 1990s. The reason cited by METI is that while one or two
companies typically monopolize each sector in Western countries or
the Republic of Korea, multiple Japanese companies engage in fierce
domestic competition, with a consequent delay in their overseas
investments.

Japan's per capita GDP has dropped from number three in the world in
2000 to number 23 in 2008. METI believes that this is not a
temporary phenomenon. It intends to include in the vision of
industrial structure measures to strengthen the competitiveness of
Japanese companies and to support overseas ventures of small and
mid-sized businesses.

13) Takemasa: Australia's proposal is regrettable

ASAHI (Page 6) (Abridged)
February 26, 2010

In connection with Australia's submission of a new proposal to the
International Whaling Commission (IWC) requiring Japan to gradually
discontinue its whaling in the Southern Ocean, Senior Vice Foreign
Minister Koichi Takemasa said at a press conference yesterday: "It
is regrettable that the proposal was submitted despite the fact that
some progress has been made (owing to the chairman's new proposal)."
Takemasa also indicated that his ministry will continue to make
efforts to reach an agreement at the IWC annual meeting in June.

14) Research whaling likely to become source of diplomatic conflict;
New Zealand may follow Australia

NIKKEI (Page 2) (Full)
February 26, 2010

Japan's research whaling in the Southern Ocean and elsewhere is
fomenting a fresh diplomatic conflict. This is because New Zealand
has hinted that it could fall in line with Australia, which has

TOKYO 00000390 008 OF 008

insisted that it will bring a case before the International Court of
Justice (ICJ) if Japan rejects its call for gradual discontinuation
of research whaling. With the annual meeting of the International
Whaling Commission coming up in June, maneuvering by each country
will likely intensify.

Foreign Minister Katsuya Okada held a telephone conversation
yesterday with his New Zealand counterpart, Murray McCully. During
the conversation, Okada stressed: "We are disappointed at
Australia's stance. We will continue to seek a diplomatic settlement
through the IWC and bilateral talks." McCully then responded: "We
share with Japan the position that a diplomatic settlement should
take precedence."

Japan has enjoyed friendly relations with Australia and New Zealand.
"The whaling issue is the only diplomatic thorn," said a senior
Foreign Ministry official. However, if the issue becomes more
serious, it could affect economic relations as well as joint efforts
in such areas as nuclear disarmament. In order to adopt a new rule
at the IWC annual meeting in June, approval of more than
three-quarters of the 88 IWC member countries is required. There is
fear that the issue may be protracted.

ROOS

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