III.II. MULTILATERAL TRADE: AVENUES FOR COOPERATION

‘Beyond the Galapagos Syndrome ’ : Mapping the Future of UK-Japan Economic Cooperation

Luke Cavanaugh (ed.), Olivia Bisbee, Owain Cooke, Kezzie Florin-Seon, Elizabeth Steel

endangers its prime position as a gateway to Europe for Japanese businesses. It is critical to recognise that while the bilateral trading relationship is on its own significant for both economies, this cannot be disentangled from the broader goals held by both British and Japanese businesses: both seek to interact directly with the other country, but also to use this country as a base from which they can establish themselves in the other ’ s respective region. For Japan, a priority is continued access to European markets, while Britain ’ s ‘tilt to the Indo-Pacific ’ marks a desire to establish a greater economic and strategic presence in that region. Therefore, challenges to the bilateral relationship may arise from this broader context of regional geopolitical and economic dynamics.

This paper previously noted that some Japanese businesses have questioned their ties to the UK in the aermath of Brexit due to their need for easy access to European markets. Indeed, a January 2021 survey of Japanese businesses based in the UK indicated that a third were concerned with Brexit’ s negative impact on their business, while one in ten were considering reducing their presence in the UK to offset this. While some major companies have committed to remaining in the UK, notably Nissan, other large firms have already announced plans to relocate, with Panasonic announcing it would move to Amsterdam, and Honda announcing in 2019 that it will permanently close its UK plant. 54 Automotive companies such as Honda face challenges as their factories are closely linked with European supply chains, while financial firms rely on ease of business, travel and financial flows, hence they are particularly susceptible to changes in the EU-UK relationship55

It remains to be seen how the UK will reinforce its value to these companies and investors, although some reassurance has been provided by the UK-Japan CEPA

54 ‘Japan-UK Relations After Brexit’ , Asia House (March 2021) https://asiahouse.org/wp-content/uploads/2021/03/Japan-UK-Relations-after-Brexit-Asia-House-2021.pdf accessed 17 October 2021; ‘Brexit: Japan ‘would welcome’ UK to TPP says Abe’ (BBC News, 8 October 2018) https://www.bbc.com/news/uk-politics-45780889 accessed 17 October 2021 55 Pernille Rudlin, ‘Top 30 Japanese Companies in the UK – Brexit Impact’ (Rudlin Consulting, June 28, 2016) https://rudlinconsulting.com/top-30-japanese-companies-in-the-uk-brexit-impact/ accessed 17 October 2021

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