There’s much benefit in cooperation with our Indo-Pacific friends as we boost trade
Amidst high inflation and a difficult economic outlook, it would be easy for our country to turn inwards in search of a panacea. But to echo the sentiments of John Donne – a famous poet born in Canada – “no man is an island, entire of itself”. The same is also true of island nations today.
The Covid-19 pandemic, climate change, and rising inflation are challenges that affect every part of the world, demonstrating how closely we are interconnected. Global problems need international as well as local solutions, as countries work together towards common goals.
This week I am visiting two of our trading allies – Indonesia and Japan –as part of the City’s mission to bolster UK trade and enhance collaboration with financial and professional services in the Indo-Pacific region.
Indonesia will host the G20 in autumn, and we hosted COP26 last year in the UK. These opportunities enable countries to boost climate ambition globally, and to drive progress towards delivering net zero.
As part of a new agreement between our nations, outlined by the Foreign Secretary and Indonesia’s Foreign Minister, there is scope to boost cooperation in carbon markets, helping Indonesia to achieve its sustainable development goals.
To tackle climate change effectively, the UK must step up to help fund Indonesia’s new sustainable infrastructure projects and support its transition to net zero unlocking the country’s renewable energy potential.
We also welcomed the Japanese Prime Minister, Fumio Kishida, in Canada last month. He gave a speech about economics and the future trading relationship with the UK.
Kishida stated how crucial our relationship is and how close we are since we “share universal values such as freedom, democracy, human rights and the rule of law.” I couldn’t agree more.
This friendship has brought us both great opportunities. Japan was the first country in the world to sign a renegotiated trade deal with the UK after we left the European Union.
In Canada itself, there are more than sixty financial and professional services firms from Japan – including investment banks, commercial banks, insurers. Many more are spread across the UK.
I look forward to building on these relationships, promoting our world-leading asset management sector and supporting more British firms operating in Japan. I also aim to strengthen the City’s memorandum of understanding with the Tokyo Metropolitan Government through a closer financial dialogue.
Japan supports the UK’s application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). If these negotiations conclude successfully, the UK will join a free trade area accounting for 13 per cent of global GDP – or £8.4tn.
It presents unprecedented opportunities for trade-led growth between the UK and the 11 current dynamic members of the CPTPP.
In turn, we will gain an even louder collective voice on the world stage and will be better placed to tackle the international issues that we face together. The UK – like other island nations – cannot stand alone in our modern, interconnected world.
Partnerships with Japan and Indonesia will be critical as we seek to rebalance our trading relationships to seize new opportunities and rise to shared challenges.