May Bonds With `Shinzo' Over Tea, Trade and Sea Cucumber Innards
(Bloomberg) -- Brexit talks are hardly going well but there was one section of the U.K. government having a good day. Prime Minister Theresa May’s team congratulated themselves that her visit to Japan couldn’t have gone better.
The embattled premier schmoozed with business leaders, she heard warm words on the U.K.-Japan trading relationship and she even earned compliments on her clothing from her Japanese counterpart, Shinzo Abe.
"You can really feel Japan and the United Kingdom’s economic tie is not only deep, but reaches a wide range of areas,” Abe told May at a state banquet on Thursday evening before the leaders dined on wagyu beef and sea urchin. “On top of that you can all tell that everyone here is very much fascinated by your excellent sense of fashion,” he said, referring to her decision to wear the red and white of the Japanese flag the previous day.
At a joint press conference earlier in the day, May broke with formality, addressing Abe by his first name. “Thank you, Shinzo,” she said. “Our personal friendship reflects the deep friendship and bonds between our two countries.”
The diplomatic pleasantries in Tokyo contrasted starkly with the mood in Brussels with the sides deadlocked over the size of Britain’s exit bill. Michel Barnier, the EU’s lead Brexit negotiator, mocked May by repeating “Brexit means Brexit,” one of her early catchphrases as premier.
While a deal with Japan, the third-biggest economy, is a prize worth seeking for May to reinforce her message about a “global” and free-trading Britain, it is dwarfed by the importance of a deal with the EU. Japan is the destination of just 10.5 billion pounds ($13.6 billion) of U.K. exports, a fraction of the $260 billion the rest of the EU buys.
A favorable Brexit deal is also important to Japanese investors, who want assurances about access to EU markets for their units in the U.K.
May met with Toyota Chairman Takeshi Uchiyamada, Nissan Chief Executive Officer Hiroto Saikawa and Hitachi Chairman Hiroaki Nakanishi in order to press home her message that she’s prioritizing the need for a swift agreement with the EU on trade and securing a defined transitional period.
Nissan had to be offered guarantees on market access by May before it confirmed investment in its plant in Sunderland, northeast England, in October and Abe said other Japanese companies need reassurance. The Japanese prime minister pressed for a “transparent and predictable” divorce in a speech to a business forum during the visit.
Nomura Holdings Inc., which employs more than 3,000 people in Europe, mostly in London, has already picked Frankfurt as the headquarters for its EU operations after the U.K. leaves the bloc, while Daiwa Securities Group Inc. said it will establish a subsidiary in the same city. Mitsubishi UFJ Financial Group Inc. and Mizuho Financial Group Inc. have meanwhile been building their presence in Amsterdam and Frankfurt.
Officials in May’s office were optimistic after the visit and singled out a comment by Abe that he’s convinced Britain will remain a “compelling” destination for Japanese companies after Brexit. In the muted world of Japanese diplomacy, they said, his language was very positive and forward-leaning.
Officials also marked down as a win Japan’s agreement to use a trade deal it’s negotiating with the EU as a template for bilateral deal with Britain. May’s forceful condemnation of North Korea for firing a ballistic missile over Japan on Tuesday, and the promise of increased security cooperation, also pleased her hosts.
However, there was a warning about getting too carried away from Britain’s former ambassador to Japan, David Warren, who told Bloomberg Radio that May’s hosts were keeping their doubts over Brexit to themselves.
“The Japanese simply don’t understand why we’re doing this,” he said. “They’re far too polite to say so publicly.”
May’s visit followed one by Abe to Britain earlier in the year, during which he dined at her official country residence and on Wednesday he laid on a traditional tea ceremony in Kyoto, followed by a private dinner featuring “salted entrails of the sea cucumber.”
The leaders also exchanged gifts: May gave Abe a reproduction of a U.K. banknote signed in 1864 by five Samurai from his home prefecture who studied in the U.K. and Abe gave May, a keen cook who owns more than 100 cook books, a book on seasonal Japanese cookery. Japan will also plant cherry trees in the U.K. as a visible expression of the two nations’ friendship.
At the state banquet, a string orchestra played Abba’s Dancing Queen, a favorite song of May’s, and Land of Hope and Glory, a patriotic British tune composed by Edward Elgar. Abe smiled warmly as May attempted to pronounce a Japanese phrase which alludes to “people who have a close and honest relationship.”
He also apologized for pestering his counterpart about securing a Brexit deal that protects Japan’s interests.
“I very much am very sorry to have to repeat this every time I meet you,” he said.