Fireside Chat with DBT Permanent Secretary Gareth Davies

The British Chamber of Commerce in Japan (BCCJ) hosted a fireside chat with Gareth Davies CB, Permanent Secretary of the UK’s Department for Business and Trade (DBT), in late September.

BCCJ President Richard Lyle invited Davies to discuss recent developments in UK trade policy, including the government’s business strategies and the UK’s membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

The event was opened with remarks from HM Trade Commissioner for Asia Pacific Martin Kent, who emphasised the importance of the UK–Japan trading relationship. Trade between the UK and Japan is currently valued at £31 billion. At the end of 2023, Japanese investment in the UK amounted to £78.4 billion while UK investment in Japan totalled £3.2 billion.

To help close the bilateral investment gap, the DBT launched its Expand in Japan initiative in July with the support of Japan’s Cabinet Office. The move builds on the signing of a Memorandum of Cooperation between Japan and the UK aimed at enabling increased UK investment into Japan to strengthen bilateral economic ties, he said.

Kent also outlined the UK’s Growth Mission, which comprises a modern industrial strategy, a trade strategy and a small business strategy, noting that 'together they form the lodestar for the direction we’re travelling in, the sectors we’re supporting and the places we’re supporting in the UK.

'At our DBT teams at the British Embassy in Tokyo and British Consulate General in Osaka, operations are at full steam to support exports, foreign investment in the UK and more British investment into Japan,' he added.

UK’s Modern Industrial Strategy

Asked about the purpose of the Modern Industrial Strategy, Davies said it outlines the UK’s strengths, weaknesses and potential for collaboration.

'No economy, however large—unless of continental size like the United States or China—can do it all themselves,' he said. 'At the heart of the industrial strategy is recognising the things we’re great at and the things we need to partner on. It puts trade at the centre: diplomatically, politically and economically.'

The strategy names the eight sectors believed to drive growth over the coming decade, namely advanced manufacturing, clean energy industries, creative industries, defence, digital and technologies, life sciences and professional and business services.

'That’s where government energies and efforts will be … and we want to deepen economic relationships on all levels—exports, imports and investments,' he said.

Global trade

While trade is an increasingly contentious issue in countries such as France, Germany and the United States, there is a large political consensus in the UK 'for more global connections' and for the UK 'to remain an open, global trading nation,' said Davies.

'We’re trading to navigate a more contested, volatile, politically driven world by putting some boundaries and structures in place to reduce uncertainty for businesses … The CPTPP was negotiated by the Conservatives and then ratified under Labour—a great sign of what we can do here,' he added.

Asked how British companies can maximise the UK’s membership of the CPTPP, Davies said the pact 'creates structure for helping [bilateral] relationships and resolution of market access barriers.'

The UK’s accession to the CPTPP, in December 2024, connects the UK to 'a fast-growing, critical part of the world,' he added, noting the government is 'keen to prioritise' the UK’s relationship with the Asia-Pacific region.

The government is providing 'practical support for businesses to take advantage of the agreement,' he said, citing the example of a programme in Australia that has contributed significantly to an increase in imports, particularly related to agriculture, and in exports of financial services.

UK–Japan ties

As island nations with large economies and complex relations with their continental neighbours, Japan and the UK share many similarities, said Davies.

The bilateral relationship is long and strong; Japanese investment in the UK through Nissan and Toyota in the 1980s made a 'transformational difference' not just from the direct investment but also from the ripple effect on regional economies. And, looking ahead, Japan is 'leading the way in the challenges we will face in the forthcoming decade,' he added.

The British government aims to build on the UK–Japan Industrial Strategy Partnership, announced in March, by deepening bilateral economic and industrial relationships to support both exports and imports.

'Lots of trade at the moment is export focused. We also believe in the benefits of imports,' Davies said, noting that imports reduce cost and provide choices for companies in the UK while also supporting supply chains.

Japanese businesses are especially interested in collaborating with British universities in areas such as quantum, which is experiencing significant growth, including through investment in British AI infrastructure by US-based firm OpenAI. The UK government is improving access to grid capacity, which is critical for data centres, in the hope of creating an 'incredibly rich ecosystem for both fundamental research and development,' he said.

Asked for his 2030 vision of the UK–Japan relationship, Davies said he is excited about bilateral opportunities in three areas: decarbonisation, defence and digitech, underpinned by services.

He noted that the UK is a few years ahead of Japan in the transition to green energy, presenting the opportunity for several clean energy projects, particularly in offshore wind, to come to fruition in Japan through partnerships by the end of the decade. In defence, there is the opportunity to deepen relationships at both the government and industrial level. Finally, the interface between the UK’s digitech sector and Japan’s advanced manufacturing and robotics industries could be 'incredibly powerful,' he said.

Engagement with BCCJ members

Although free trade agreements are important in setting the structure of relationships and trade missions 'can open doors and create relationships that could take years to make otherwise,' Davies said improving trade often lies behind the border, in addressing challenges such as regulations, policies, standards and logistics.

'The government can catalyse and galvanise relationships, but the main thing is trying to get further and further upstream … to get in touch with the regulatory environment,' he said, adding that the UK government is doing 'an increasing amount of work globally' to tackle barriers to doing business.

He called on BCCJ members to raise any issues they face in doing business in Japan with the British Embassy in Tokyo and British Consulate General in Osaka.

'The UK government is here to help you navigate issues,' including through dialogue with Japan’s Ministry of Economy, Trade and Industry.

'If we don’t know the issues, we can’t have the conversations. We want to find the opportunities for change. … I’m a big believer in partnership between the government and the private sector. The more you can help us focus our energies, the better,' he told BCCJ members.