Japan trade talks prompt questions
In the Prime Minister's words, global Britain has to help create a country that works for everyone. But how will that be achieved?
The Kyoto Garden in Holland Park is often referred to as one of London’s hidden gems. A gift from the Japanese Chamber of Commerce as part of the Japan Festival of 1991/92, it’s a perfect getaway from the hustle and bustle of central London. It’s also a place to reflect on the oddity of a part of London where the Minimum Wage and the Maserati can often be found side by side – an inequality brought to the world’s attention following the tragedy of Grenfell Tower, just a mile’s walk away.
But what does this have to do with the Prime Minister’s trade mission to Japan last week?
Of course, Grenfell Tower wasn’t on the agenda when the Prime Minister sat down with her opposite number, Shinzo Abe. Japan is the UK’s third largest non-EU trading partner so quite rightly their discussions focused on security, Brexit and trade.
Prime Minister Abe sought assurances on the terms of Brexit and Mrs May reaffirmed the UK’s support for an ambitious free trade agreement between the EU and Japan, as well outlining her vision of a confident, outward-looking post-Brexit Britain. The CBI played our part in supporting these aims by joining the delegation.
To further support this, we’ve spent much of the past 12 months working with business federations and governments in countries that operate an independent trade policy to see what we can learn from their experience.
There’s much to take on board and a few things not to. And of course, everyone does things differently. But one of the most important findings is this: that your national trade strategy has to help you to achieve the objectives you’ve set for your domestic economy. Or in the Prime Minister’s words: global Britain has to help create a country that works for everyone. Which brings me back to Grenfell and the inequality this tragedy has come to represent. Because, frankly, unless the supporters of open markets and globalisation can explain in a much more compelling way how they make a positive, meaningful, difference to people’s lives, then we’ll lose the argument.
So what can be done?
The government can do its bit by bringing the plans on industrial strategy, Brexit and international trade together in a more meaningful way. There are some important questions that need to be addressed. How, for example, will our approach on Brexit and trade help attract and retain productivity-enhancing investment in the parts of the country that need it the most? And what’s the plan for supporting people who might lose jobs in parts of the economy that are exposed to greater international competition post-Brexit? These are difficult questions with no easy answers, which is why we’ve welcomed the formal structures set up by government recently to get business feedback on them.
Part of the solution, however, involves getting much better at talking about what is already working well. Japanese investment in the UK provides some fantastic examples. Take Hitachi Rail Europe’s investment in the North East which has created a state of the art manufacturing hub in Newton Aycliffe and over 1,000 new jobs. Or the $500m investment by Softbank in Cambridge based virtual reality business, Improbable, earlier this year, releasing funds for further investment to create high-skilled jobs in London. And Nissan’s incredible investment in Sunderland, directly employing over 7,000 people in the city and supporting an estimated 10,000 jobs across the region through its supply chain.
Of course, this story-telling will only make a difference if people trust the messenger and trust in business and government, though showing signs of improving, remains low. Recent research we’ve published shows that businesses can improve trust by binning management speak and talking about what they do using words that people use in day-to-day life.
So while it might not have been at the front of the Prime Minister’s mind in Tokyo last week, making the case for openness with language that captures the imagination and trust of the public is a task that falls to all of us interested in maintaining open markets.
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