“I am delighted to be back in Japan for what is my 42nd visit to the country. I consider myself a sincere friend of Japan and I have learnt over the years that this is a country that demands and rewards long-term friendships, as I’m sure you can all attest.
Britain too has been a long-term friend to Japan. Indeed it was 100 years ago that we signed the third and final Anglo-Japanese Alliance Treaty, in what for many was a golden period in relations between our two countries. But while Japan has long been Britain’s closest partner in Asia, and Britain Japan’s best friend in Europe, you will all be aware that this Government is determined to build an even stronger UK-Japan relationship. Today I’d like to explain why by setting out briefly the geopolitical significance of a reinvigorated UK-Japan relationship and then saying a few words about what the Government is doing to develop that relationship.
British Foreign Policy in a networked world
Our Foreign Secretary set three priorities for Britain’s foreign policy when the Coalition Government came to power: safeguarding Britain’s security; building Britain’s prosperity; and supporting Britons overseas. Two fundamental truths about the global landscape inform these priorities. First, that we live in a networked world facing shared threats such as nuclear proliferation, international terrorism, climate change and energy security; and where the power to meet those threats is being diffused into a wider circle of multilateral fora, alliances and formal and informal partnerships between governments, businesses and peoples. To prosper in a networked world, Britain needs to identify clearly its interests and seek to work closely with others who share them. This increases the significance of building bilateral relationships.
The inescapable fact of modern geopolitics is the transition of power, of economic weight and political influence, away from Europe and the West to many of the countries of the East and South, as well as outwards into the hands of the world’s hundreds of millions of empowered web and internet users. The present Middle East political turmoil is a vivid demonstration of some of the consequences of this power shift. We are living in a very world both dangerous but full of possibilities.
This government is, of course, not the first to recognise this shift, but we are taking more concrete steps to adapt to it. For example we have established an Emerging Powers Subcommittee to the National Security Council. Chaired by the Foreign Secretary, the subcommittee ensures that Britain’s relations with rising players on the world stage are high on the agenda across Government departments: from business to defence; energy to development.
Britain’s relationship with Japan is crucial within this chaging global landscape. The steps we are taking towards the emerging powers does not mean we are turning our backs or taking for granted those countries with whom we share a long history of cooperation. Our transatlantic relationship with America remains of great importance. Just as Japan’s transpacific relationship with America does. We will continue to be close partners with the US- “solid, but not slavish” as the Foreign Secretary likes to say. Nor will we overlook those countries on our doorstep: the Government has a clear plan to be active and activist members of Europe. In a similar vein, we consider Japan will remain our strongest and best partner in Asia. We are both island nations with strong democratic values and shared interests, seeking to define our roles in a changing world. This is why the Government wants to re-energise our bilateral relationship and develop closer collaboration with Japan across many areas.
I have heard people say that in the new 21st century landscape nations like ours and yours are bound to be losing influence while power blocs and superpowers take over. In a network world I believe the opposite will occur, provided that we are agile and energetic.
In the British case I would mention the big new network opportunities we have through our membership of the 54 nation Commonwealth - a system in which I know Japan’s shows great interest. I see this very much as a global version of the Big Society we are seeking to develop at home.
Many of you will have heard the Foreign Secretary’s speech here in Tokyo, in which he established that working towards Britain’s economic recovery was a British foreign policy priority. He chose to give the speech in Tokyo not least because of the already strong commercial ties between the UK and Japan and because our two countries are like-minded in our approach to the global economy. Prime Minister Kan’s speech in Davos last month set out his intention to drive forward a “third opening of Japan” through economic and trade liberalisation. We too envisage that opening up trade and investment will be vital to securing Britain’s prosperity and global economic growth.
The Government has already taken steps towards this goal. Britain is already considered by the World Bank, the Economist Intelligence Unit and others as the easiest place in Europe to do business. Nevertheless, the Government aims by 2014 to reduce the rate of corporation tax to the lowest level in the G7, making the UK an even more attractive place to invest and do business.
This year the Prime Minister appointed Lord Green as the Minister for Trade and Investment. As ex-Group Chairman of HSBC with his expertise and experience he will provide invaluable leadership to our efforts to boost Britain’s exports and attract inward investment.
And this month, the Government published the Trade & Investment White Paper outlining our strategy to rebalance the UK economy through an ambitious framework for trade and investment. The paper reaffirms the continuing Government commitment to the central role of open markets in driving global growth and poverty reduction. There are a number of challenges to open markets, protectionism being one, which the world needs to guard against. The paper sets out to our trade and investment partners around the world how we want to work together for mutual benefit, based on the principle that free trade is the best way to deliver prosperity for all.
The paper supports concluding the Doha Development Agenda negotiations. 2011 is the make or break year for the negotiations and a successful round could deliver £110bn (JPY 7.2 trillion) boost per year to the global economy. We know that Japan too is a long standing advocate of a conclusion to the Doha.
One of the most notable statements in the White Paper is our shift in policy on Japan. We make clear our support for launching negotiations on a comprehensive and ambitious EU-Japan Economic Integration Agreement (EIA), provided that it can address the full range of barriers that currently face British companies wishing to enter and succeed in the Japanese market.
The potential gains on both sides are significant and bear repeating. As the Foreign Secretary said here last year, the maximum removal of tariff and non-tariff barriers between the EU and Japan could deliver a substantial boost to trade flows, estimated to be worth €43bn (JPY4.9 trillion) to the EU, and €54bn (JPY6.1trillion) to Japan.
Britain will be strong supporters in Europe for an Agreement that will enable us to realise this immense potential, from which we all stand to gain. However in order to get the necessary support from other Member States, Japan needs to demonstrate strong commitment to reducing non-tariff barriers. Prime Minister Kan’s words in Davos were certainly encouraging but we, both Government and business, want to see action on this issue. This is a real chance for Japan to show the world that it is willing to rise to the challenges of a rapidly changing world economy.
As I am sure you are aware, this not just about the benefits of removal of non tariff barriers to British and other foreign business in Japan. Already major Japanese corporations are concerned that others in the region (notably Korea) will enjoy an advantage over Japanese companies in the large EU market if an Economic Integration Agreement with Japan is not also completed.
So I hope that both British and Japanese business alike will join together with the UK Government in lobbying the Japanese government on non tariff barriers and the business benefits for all of removing them. I want you to let us know, through our Embassy here and the UKTI teams we have across Japan, of any access problems you are facing so we can lobby effectively on your behalf both in the context of bilateral market access discussions as well as the possible EIA negotiations.
So there is clearly great potential for a stronger commercial partnership between Japan and Britain. But we are also determined to cooperate closely in other areas.
We are outspoken in our desire to see proper reform of the United Nations, with Japan obtaining a permanent seat on the Security Council. It makes little sense that a country contributing 11 percent of world GNP is not represented in the forum charged with maintaining global peace and security.
Indeed, Japan is a trusted partner in security matters. With regards to defence, where Japan’s spending on its Self-Defence Force is already very considerable, we hope to sell Japan our superb Eurofighter Typhoons and develop closer collaboration between our defence industries.
Our countries share the same goals on nuclear proliferation, backing multilateral efforts to contain the dangers presented by both Iran and North Korea. And Japanese financial support in Afghanistan has been vital to efforts to bring stability there. We will continue to work closely with diplomats and peace-building experts from Japan to prevent and resolve conflict across the world. Similarly, both our countries recognise that working towards the Millenium Development Goals, in particular those relating to health and education, will build global prosperity and security, and is clearly in our enlightened national interests.
Energy Security and Climate change
These are some of the challenges that Britain and Japan must work together to face, but we are also presented with great opportunities. Take, for example, climate change and the move towards a low carbon economy. Both our countries have strong traditions of innovation and technological development. We recognise each other’s strengths: there are over 150 Japanese R&D facilities in the UK and British universities see Japan as a strong partner both for basic research and for the application and commercialisation of technology.
By bringing together these complementary research strengths Japan and the UK can work together to tackle climate change and seize the opportunities that the move towards a low carbon economy will present. And we can and must do so in which ensure for our people full energy security and manageable and competitive energy costs. For example, a current project led by the Embassy involves bringing together researchers to look at the environmental impacts of Carbon Capture and Storage, drawing on access to unique research sites in Europe and Japan.
And I have seen myself earlier this week the impressive work being done to develop smart grids in Japan and the opportunities for collaboration in this field. On Monday I had the pleasure to attend a UK-Japan seminar on smart grids hosted by the British Consulate-General in Osaka. Participants in this event included policy makers, academics and business representatives from both countries, and I expect the seminar to lead to further expert-level cooperation in the coming months.
And we should explore the big potential for collaboration round the world in our international aid and development programmes. In both countries these are large and innovative, and we have much to gain from working together on the ground in needy areas.
Today I have set out an optimistic vision of Japan and Britain working together towards mutual national interests, and I hope I have provided you with more detail on what the British Government is doing to bolster the bilateral relationship.
It is not just a question of visits; our commitment to reinvigorate the relationship is being translated into policy, particularly with regards to trade and investment. And there is a substantial role for business to play here too. In a networked world, we can no longer simply enshrine a bilateral relationship in a formal treaty of alliance between governments, as my predecessors did with their Japanese counterparts a hundred years ago. Now we must establish connections and build partnerships across all levels of Japanese and British society. From government and business cooperation through to cultural and educational exchanges between our nation’s young people, and to joint endeavours in defeating world poverty. As a friend to Japan over the years, I know from experience that there is ample scope for this level of partnership between our countries. I will be a staunch advocate for broadening and deepening our ties because I believe that while the UK-Japan relationship has a strong history, it has the potential for an even stronger future.”