What are the problems that Japan and UK had in politics and what are the solutions ?
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Answer:
Japan, United Kingdom
As the UK hails its "historic" deal with Japan, Fieldfisher trade and corporate specialists Andrew Hood and Tim Bird consider how changes to the UK-Japan trading relationship will likely require exporters in both countries to navigate differences in corporate governance approaches.
On 11 September, the UK government announced an "historic" free trade deal with Japan, its first post-Brexit independent trade pact, tipped to boost trade between the two countries by an estimated £15.2 billion in the short term.
The deal with Asia's largest advanced economy officially took just over three months to conclude, although negotiations have been going on in the background for a number of years, and the full text of the agreement will not be available for scrutiny until October.
Although the deal has been broadly welcomed by the UK business community and appears to largely replicate the existing deal between Japan and the EU, it is unclear to what extent the agreement pushes beyond the benefits the UK received as an EU member.
The main points of the deal seem to be a commitment to closer trade relations between Japan and the UK; some limited additional preferential treatment for UK goods exporters; reciprocal benefits for UK and Japanese service sectors including unrestricted digital trade and a framework for greater potential access for financial services; greater freedom of movement for workers; and a step towards possible UK accession to the Trans-Pacific Partnership.
According to the UK government, once implemented, the UK-Japan Comprehensive Economic Partnership Agreement will allow UK businesses to benefit from tariff-free trade on 99% of exports to Japan.
The deal also promises to create more openings for those looking to expand into Japan, or potentially new market competition which all businesses should be aware of, whether they export or not.
This raises questions about how differences in approaches to corporate governance in Japan and the UK, and the level playing field such governance aims to promote, will affect future trade between the two countries.
The UK-Japan deal – overview
While Japan is estimated to account for just 2% of British trade, the deal is expected to enhance trade relations between the two countries and provides some security for British and Japanese businesses that their current trading conditions will continue.
However, given that many Japanese businesses have traditionally used Britain as a hub to access the EU market and are keen for this continue unhindered through an EU-UK trade deal, there is still a risk that Japanese exporters will cool their enthusiasm for the UK if it fails to maintain enhanced trade relations with the EU.
Goods
The government has said that there will be “strong tariff reductions” for UK pork and beef exports to Japan, with low tariffs for other British food and drink products such as Stilton cheese, tea extracts and bread mixes and "more generous market access" for UK malt producers than under the EU-Japan trade deal.
But the UK did not manage to secure new so-called tariff rate quotas, which allow EU farmers to sell a limited quantity of sensitive food products to Japan at lower tariffs. The UK will instead be allowed to use any quota left unfilled by the EU in 10 of 25 products covered by the EU-Japan agreement.
Reduced tariffs on imports of Japanese car and rail parts supplying major investors in the UK like Nissan and Hitachi are touted as supporting British automotive and rail manufacturing sectors, with streamlined regulatory procedures and greater legal certainty for their operations.
One notable advance the agreement makes over the EU-Japan deal is in cumulation and rules of origin. Under the terms of the deal published so far, British exports to Japan of some products containing large amounts of EU or international parts will count as goods originating from the UK.
But this arrangement does not resolve the issue of how British goods containing lots of Japanese parts that the UK wants to sell into the EU will be treated. This will still need to be sorted out in a trade deal with the EU and could prove a sticking point in maximising the economic benefit to the UK from the Japan deal.
The UK-Japan deal also allows the UK to apply for up to 70 geographical indications (GIs) on special products, up from the seven it has under the EU-Japan deal.
Services
The deal contains some beneficial provisions for services, including a boost for "digital trade" through a ban on data localisation, allowing data to flow freely between the two countries – a benefit strongly angled for by Japan's large tech companies.
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Policy
Behind Japan’s Success
by Peter F. Drucker
From the January 1981 Issue
To many business people and public officials in the West, the postwar success of the Japanese economy is both an impressive and a puzzling achievement. The success is obvious and measurable; the reasons for it, far less so. Seeking explanations, Western observers often fasten with wide-eyed enthusiasm on the mysterious workings of “Japan, Inc.,” that fabled edifice of business-government cooperation. To it they ascribe a continuous application of single-minded energy; from it they expect a continual flow of industrial miracles. In this article, Peter Drucker, long recognized as an authority on Japanese business, takes pointed issue with this familiar myth. No such thing exists, he argues, at least not in the form commonly attributed to it. The accomplishments of Japanese industry are the result not of some all-powerful structure but of Japan’s having defined more ably than any other industrial nation some of the essential rules for managing complex organizations in the modern world.
“I am more afraid of the Japanese than I am of the Russians,” a young lawyer said to me recently. “To be sure, the Russians are out to conquer the world. But their unity is imposed from the top and is unlikely to survive a challenge. The Japanese too are out to conquer us, but their unity comes from within. They act as one superconglomerate”—a conglomerate Westerners often call “Japan, Inc.”
To the Japanese, however, Japan, Inc. is a joke, and not a very funny one. They see only cracks and not, as the foreigner does, a monolith. What they experience in their daily lives are tensions, pressures, conflicts, and not unity. They see intense, if not cutthroat, competition both among the major banks and among the major industrial groups. And the Japanese are themselves involved every day in the bitter factional infighting that characterizes their institutions: the unremitting guerilla warfare that each ministry wages against all other ministries and the factional bickering that animates the political parties, the Cabinet, the universities, and individual businesses.