Japan: As Tokyo Focuses on Security, British Prime Minister Prepares to Talk Trade

2 MINS READAug 30, 2017 | 20:44 GMT

As the United Kingdom plans its exit from the European Union, British and Japanese officials plan to hold informal talks this week on a bilateral trade agreement. British Prime Minister Theresa May, accompanied by a trade delegation, arrived in Japan on Aug. 30 for her first official visit to the country. She was greeted by Japanese Prime Minister Shinzo Abe, who hosted the prime minister for dinner. Formal talks are set to begin Aug. 31 in Tokyo and will include post-Brexit plans and security issues.

Japan is reaching the final stages of free trade talks with the European Union. It also wants to secure a post-Brexit deal with the United Kingdom, but it appears to have adopted a "wait-and-see" approach regarding these negotiations. Japan was vocal in the months leading to the Brexit decision, voicing fears that a Brexit would negatively affect the bilateral trade relationship it has with the country. British trade is important to Tokyo, given that Japan has used the British market as a launch point for access to the EU market. Around 1,000 Japanese businesses operate in the United Kingdom, and many Japanese banks maintain their global operations offices in London.

Japanese businesses employ around 140,000 British workers. For the United Kingdom, foreign direct investment by Japanese automotive makers such as the Nissan plant in Sunderland is politically and economically important because it provides well-paying jobs. After the Brexit referendum, the British government made private assurances to Nissan that it would help the company sustain its competitiveness if it kept its factories in the United Kingdom, and as a result Nissan seems to have doubled down — Sunderland production is expected to increase by a fifth.

Still, Japan is reluctant to talk trade with the United Kingdom right now: Before it defines its future trade strategy toward the United Kingdom, it wants to see what kind of U.K.-EU trade relationship emerges from Brexit negotiations. Besides, Japan is more focused on security at the moment, especially given how uncertain the trade issue still is. During her trip, May will become the second foreign leader ever to attend a Japanese National Security Council meeting and will also tour a Japanese warship, the Izumo. More than trade, security is Japan's most urgent priority. It wants to increase defense ties with the United Kingdom in the wake of North Korea's Aug. 29 missile test over northern Japan.

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