Jo Ahmed, partner at Deloitte in the North West and Honorary Consul of Japan discusses the considerable opportunities that the strengthening of ties with Japan offers for Greater Manchester, and the benefits afforded the region by the new Free Trade Agreement.
Our last Japanese event, which considered the impact of the newly agreed economic partnership agreement, once again highlighted the brilliant heritage in the relationship between Manchester and Japan, and the huge potential that continued collaboration presents.
As Greater Manchester Mayor Andy Burnham outlined, the relationship between the two locations dates back as far as 1865, with the sharing of best practice in industrial processes for the cotton trade. Manchester and Japan have driven a mutually beneficial trading relationship since that point, and with the signing of the new economic partnership agreement, this is only likely to strengthen.
From humble beginnings, this relationship has blossomed into one of the most significant for both parties in recent years. Providing his thoughts, Ambassador Hayashi outlined that £30bn of goods and services were traded between the UK and Japan in 2019, with the UK now the second most attractive location for investment by Japanese companies.
Such is the scale, collaborations between Mancunian and Japanese businesses have now begun to make national and international news. In May this year, Japanese investment group SoftBank completed a $1bn equity investment in Manchester’s latest tech unicorn The Hut Group, with the option to invest a further $1.6bn into its THG Ingenuity arm. At our event, Steve Whitehead, Group Commercial Director at The Hut Group, outlined the significance of the transaction, and the value that the Asian market offers to their business as a potential for future growth.
Alongside these tie-ups, Japanese collaborations are also at the heart of the region’s infrastructure plans. In addition to the Kansai Electric Power’s involvement in Electricity North West since 2019, which will play a pivotal role in our commitment to reducing our carbon footprint, we also recognise the huge influence that Japan can have over future projects. With first-hand experience of high-speed rail, Japanese companies will be crucial in maximising the value of the planned HS2 and HS3 rail projects for Manchester, putting their knowledge of the bullet trains to good use.
For many businesses across Greater Manchester, the new free trade agreement presents an unparalleled opportunity. Trading with Japan is set to get easier, cheaper, and therefore more profitable for Greater Manchester companies. As Dominic James of the Department for International Trade noted: “the North West exported £350m to Japan in 2020, and the region is expected to benefit by a further £64m as a result of the new trade agreement.”
Alongside the trade agreement, the UK’s expected accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) will continue to make business relationships with nations like Japan easier and more streamlined. With seven of the eleven countries included in the accord from Asia, Manchester will not only be able to continue to strengthen existing ties, but also expand our influence and connections into the wider Asian market.
Ambassador Hayashi perhaps put it best – “Manchester is striving to spawn a new industrial revolution, centred around digital and green.” To achieve this, we will need to continue to strengthen our relationships with partners like Japan to help us fulfill our ambitions as a city-region.
Reflecting after the event, Andy Burnham, Mayor of Greater Manchester, reiterated Greater Manchester’s commitment to Japan: “Japan is a key priority market in the Greater Manchester International Strategy, we share with Japan strong economic and people to people links as well as having clear synergies in sectors such as Health Innovation, Low Carbon Technology and Advanced Manufacturing. It was an honour to co-host Ambassador Hajime Hayashi at today’s virtual event. The UK-Japan FTA is a good framework for Greater Manchester to continue expanding its bilateral relations with Japan.”
Photo by Mark Andrew. – Manchester town hall., CC BY 2.0, https://commons.wikimedia.org/w/index.php?curid=23213538
