Wednesday

23rd Aug 2017

Opinion

Mr. Johnson goes to Tokyo

  • Johnson posing with an Aston Martin painted with the Union Jack to showcase his country’s successful business ties with Japan. (Photo: UK in Japan FCO)

In the 1939 classic movie “Mr. Smith Goes to Washington”, its idealist protagonist overcomes the obstacles of a corrupt political class through sheer determination and with a twenty-four-hour filibuster.

Britain's foreign secretary, Boris Johnson, was less naïve when he arrived in Tokyo last week, and his obstacles are of a different nature, but the key to the success of his broader mission lies in similar levels of commitment.

The news on the agreement in principle of an EU-Japan free trade deal two weeks before his visit shows the UK should not take its partnership with the second largest economy in Asia for granted.

Johnson officially came to Japan to discuss increased foreign, security and economic cooperation, and to share his experience of hosting the Olympics as mayor of London five years ago, ahead of the 2020 Tokyo Olympics.

However, the ultimate goal of his three-day visit was to reassure the UK’s fourth largest direct investor globally – and the second one in Asia, after Singapore – that Britain remains open for business, and will reward its faithful partners after the Brexit process is completed.

As a result, Japan is finding itself in the unexpected position of being courted by two rich markets (the EU and UK) following the rejection of the Trans Pacific Partnership (TPP) by US president Donald Trump's administration.

Troubling news on Brexit talks

It is telling that Japan was the first country Johnson visited on this trip, and the only non-Commonwealth country in his itinerary, which also included New Zealand (23-24 July) and Australia (25-27 July).

The leaders of all three countries publicly expressed their opposition to Brexit before the 23 June referendum last year, and all three countries viewed the UK as the gateway to a EU single market of 500+ million (relatively) rich consumers.

Political and business leaders in Japan and beyond have warned against the negative impact of a “messy” Brexit on foreign direct investments in the UK, and expressed their strong preference for the softest outcome possible, as well as transparency and predictability in the negotiations along the way.

However, the first two official rounds of Brexit negotiations and news about British domestic politics since the 8 June general elections have done fairly little to reduce Tokyo’s concerns about unpredictability.

Indeed, to expand on the Mr. Smith analogy, some observers in Tokyo see something like a self-harm conducive filibuster in the UK’s Brexit negotiators’ apparent unpreparedness for the talks.

One of the few elements of certainty is that the Brexit clock is ticking, and businesses need to be prepared to soften the blow of any potential outcome.

The Japanese response has been to devise plans to relocate part of their businesses to continental Europe, and to deepen relations with third partners, including with the other side in the Brexit negotiations: the EU.

Indeed, the prospect of Brexit played an important role in stimulating the recent conclusion of an agreement in principle of an Economic Partnership Agreement (EPA) between Japan and the EU.

Charm offensive

This is where Mr. Johnson’s mission of reassurance comes in. If Mr. Smith had a twenty four-hour speech, the British politician had an ambitious three-day agenda packed with high-level meetings, photo ops, and various other activities.

More than in his subsequent trips to New Zealand and Australia, Johnson engaged in a full-scale charm offensive in Tokyo, and looked like he had a lot of fun in the process.

He held political discussions with Japanese prime minister Shinzo Abe, foreign minister Fumio Kishida, the newly-elected governor of Tokyo, Yuriko Koike, and Olympics minister Tamayo Marukawa, and had meetings on trade issues with Japanese and British business leaders in Tokyo.

In addition, he visited Waseda University to shake hands with their bipedal humanoid robot, Wabian2, which the British media promptly mocked, and posed with a Union Jack-coloured Aston Martin, and raved about the “truly unique and global partnership” between the two countries on Twitter.

Discussions about Brexit and the broader cooperation on foreign and security issues were at the top of the agenda, as part of the strategic dialogue with the Japanese foreign minister, but also to highlight the benefits of business access to the UK. “We’re leaving the EU but not leaving Europe,” he stressed during his trip.

Johnson lauded record high levels of Japanese direct investments in the UK last year – even though the “record” was set by only one additional deal involving a Japanese company compared to the previous year – and indicated his country would like a free trade agreement with Japan that goes even further than the EU's deal.

In his joint press conference with foreign minister Kishida, Johnson talked about the many things the two sides have in common, including a “steadfast determination” to stop North Korea’s nuclear program.

He reiterated a similar message the following day, when he met prime minister Shinzo Abe, saying that his country stands “shoulder to shoulder” with Japan in response to the “reckless provocation” posed by North Korea’s missile launches and nuclear program.

Japan in need of reassurance

Japan is a stable and reliable international partner, but it is also pragmatic and risk-averse.

The alliance with the US takes precedence over all its other relationships, but in the constellation of Japanese foreign policy ties, the partnership with the UK shines brightly.

Many representatives from the political and business communities in Tokyo often reference the UK-Japan alliance from 1902 with pride, praise the relative ease of doing business in the country today, and believe in the UK’s ability to make the best of every situation, including Brexit.

That being said, Japanese firms share the same concerns as all other global businesses about the potential impact of Brexit on their profits – and their response has been similar to that of other third parties affected by this process.

The British strategy to date has been to use all the tools of diplomacy to reassure its Asian partner, but it is unclear whether this approach will be sufficient over the medium to long-term.

In addition to periodic diplomatic interactions at different levels, prime minister Theresa May met with prime minister Abe several times, including on the sidelines of the G20 summit in Hamburg earlier this month, and at her official residence in Chequers on 28 April, making him only the second Japanese prime minister to visit.

In both instances, the topic of Brexit featured high on the agenda as May thanked Abe for continued investments of Japanese companies in Britain. However, there is little evidence that she has been able to offer anything more concrete than elusive promises about post-Brexit plans.

Like other parties not directly involved in the Brexit negotiations, this situation leaves Japan in the uncomfortable position of guessing what the specific arrangements may be.

Actions louder than words

The UK cannot legally conclude bilateral free trade deals with third parties before officially exiting the EU, but that has not stopped British officials from discussing post-Brexit arrangements.

For example, foreign secretary Johnson’s trip to Asia coincided with British trade secretary Liam Fox’s visit to the US and Mexico, to test the ground for post-Brexit bilateral trade agreements.

Their efforts are laudable. However, because the final EU-UK arrangement will affect the shape of relations with third countries in the greatest degree, third-country partners, like Japan, would rather see British officials fully engaged in more transparent, predictable, and decisive Brexit negotiations with Brussels.

Meanwhile, the uncertainty of the Brexit process and the US withdrawal from TPP has convinced Japan that it cannot afford to “wait and see.”

The conclusion of the agreement in principle of the EU-Japan EPA has provided a big psychological boost for both partners.

There is a sense in Tokyo that the hard-fought negotiations will offer new business opportunities in continental Europe, set standards internationally, and could be used as a template for post-Brexit arrangements with the UK.

In the meantime, Japan hopes UK officials will approach Brexit negotiations with the same passion Mr. Smith showed during his 24 hour filibuster exercise, convincing Brussels and all other parties involved about the merits of a deal that is good for business.

Irina Angelescu is a Council on Foreign Relations (CFR) Hitachi Fellow at the Japan Institute of International Affairs (JIIA) in Tokyo. The views expressed in this piece are her own.​

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