Scottish Secretary of States Visits the British Embassy in Tokyo

Scottish Secretary speaks on Brexit in Japan

 With Brexit of growing concern to not only Japanese firms but also the British expatriate community in Japan, the Secretary of State for Scotland’s address to BCCJ members on 16th February drew a full house at the British Embassy, Tokyo.

It was David Mundell MP’s first visit to Japan and provided an opportunity for him to share what Brexit means for Scotland, the United Kingdom and Japan.

 On Scotland

 Scotland and Japan, said Mundell, have had strong links since the mid-19th century when Aberdeenshire-born Thomas Glover landed in Nagasaki and became a key figure in business and the industrialisation of Japan. These ties have since broadened and deepened to include all sectors of trade and investment as well as education.

Japan is Asia’s leading investor in Scotland, with 85 Japanese firms employing more than 6,000 people and turning over almost £1.5bn a year, according to Mundell. Meanwhile, Scotland’s exports to Japan have increased 11% year on year to total £500m in 2017. Notable exports include Harris Tweed, whose largest international market is Japan, and specialist gas for research purposes.

But Mundell said there is now potential for Scottish exports to Japan to increase further.

“Leaving the EU represents an unprecedented opportunity for the UK and Scotland … “there is no ceiling to what can be achieved together with Japan and businesses in Japan in areas like health, education, trade and investment,” he added. “My message as I have visited businesses around Tokyo is to be ambitious, be bold and join us in seizing the opportunities that lie ahead of us.”

Mundell said the announcement, in mid-February, that Terumo Corporation is to invest £33mn in its subsidiary’s factory in Renfrewshire reflected the workforce’s quality and commitment to the firm as well as the high standard of teaching in Scottish universities to provide such skilled people.

This quality, he pointed out, is reflected across the UK, which has shown expertise in driving innovation in areas such as artificial intelligence, robotics, agritech and fintech.

He therefore believes Scotland and the UK will remain appealing for investment, even considering Brexit.

Speaking on the prospect of a second vote on Scotland’s independence, Mundell described the Scottish Independence Referendum of 2014 as “a decisive result” and “a once-in-a-generation event.”

“We don’t anticipate that there will be another referendum in relation to Scotland’s place in the UK,” he said. “I’m clear that as we leave the EU, we must use Brexit to strengthen devolution and [Scotland’s] union within the United Kingdom.”

On the UK 

Echoing Foreign Secretary Boris Johnson’s comments to the BCCJ in July 2017 that leaving the EU doesn’t mean the UK is turning inwards, Mundell said Brexit offers the UK “global opportunities we could never have taken as a member of the EU.”

Whilst he said the EU would remain a vital partner for trade and security, he noted that “once we are outside the EU, we can look at trade around the world with more freedom and more energy, to open up new markets and strengthen the links we already have with friends like you here in Japan.

“The international trade deals we enjoy as a member of the EU will be a solid foundation for our trading future. That’s why we’re taking the domestic legislation through parliament at this time, to enable us to transition the terms of those deals and preserve the non-tariff elements of existing arrangements as part of our plans to ensure an orderly Brexit,” he added.

He also noted that the UK would be leaving the single market and the customs union because it is “incompatible” to leave the EU and remain part of these EU structures. Yet, he said the government hopes for a “bespoke deal” with the EU because of its 40-year membership and alignment with EU laws.

On Japan

 Mundell welcomed Prime Minister Theresa May’s visit to Japan in 2017 and said the Japan-UK Joint Declaration on Prosperity Cooperation recognises the blossoming trade and investment relationship. Moreover, the cooperation includes “championing free trade across the globe and improving market access.”

May’s mid-February meetings with representatives of Japanese businesses and Koji Tsuruoka, ambassador of Japan to the UK, reflect her desire to take their concerns seriously, he explained. He hopes the UK government’s planned transitionary or implementation period of two years will allay fears and allow firms a longer period to prepare for Brexit while avoiding two sets of legislative changes.

Answering a question on trade with Japan, Mundell said the UK government is working with the EU to support the EU-Japan Economic Partnership Agreement and will continue that work until it is ready to negotiate its own free trade agreement with Japan.

“All EU agreements are predicated on the interests of—at the moment—28 member states so agreements cover—to an extent—all those interests. What we are looking to do in an agreement between the UK and Japan is to focus on UK interests, which in some ways may be the same, in other areas may be different,” he said.

On diversity and inclusion

 In closing, Mundell said he had great respect for May, who has shown “inner strength” in her handling of Brexit, as well as other women in leadership with whom he works closely, namely Nicola Sturgeon, first minister of Scotland, and Ruth Davidson, head of the Scottish Conservatives.

These women are criticised, but something the UK can “take pride in,” he said, is that they are judged on their merits and never criticised because of their gender.