Japan braces for Brexit disruption


Japanese people are skilled at collaborating and the prime minister and business leaders are working together closely to face a serious problem in the UK at the moment: the Brexit.
Japanese companies which have invested in Britain – including Hitachi, Honda, Toyota and Nissan – expected to use the UK as a gateway to Europe’s single market.
They are therefore distraught by Briain’s plan to leave the EU and are especially concerned about the prospect of a so-called “no deal Brexit” which could cause massive disruption to their international operations.
Abe’s visit
Prime Minister Shinzo Abe lobbied on behalf of Japanese companies when he met his British counterpart Theresa May in London. He said he was was “in total support of the draft withdrawal agreement” which Mrs May reached with the EU and which was put to a vote in Parliament on January 15th. It was rejected by a huge majority of MPs.
That leaves everyone – including Japanese businesses – wondering what happens next. If no agreement is in place by the time Brexit happens on March 29, then there will be severe restrictions on the movement of goods between the UK and EU.
Mr Abe said: “We truly hope that a no-deal Brexit will be avoided. And in fact, that is the whole wish of the whole world.”
Honda’s shutdown
The Japanese carmaker Honda has announced it will halt production in the UK for six days in April due to Brexit.
The company said in a statement: “Honda has been assessing how best to prepare for any disruption caused by logistics and border issues following the UK leaving the EU. To ensure Honda is well paced to adjust to all possible outcomes, we are planing six non-production days in April 2019.”
Hitachi’s nuclear problem
Meanwhile, the Nikkei Asian Review reports that Hitachi is about to suspend plans to for a new power station in North Wales.
Hitachi has strived to win foreign contracts since the Fukushima disaster, which has led to a suspension of new reactors within Japan.
According to the BBC, it has spent two billion pounds to develop the Welsh site but the investment will now have to be written off as a loss.
Hitachi is worried about the price the British government will pay for the electricity generated by the plant upon its completion.
Nick Butler from King’s College, London told the BBC: “Hitachi are exhausted that they can’t get a decision from the UK government and this is one of the secondary consequences of Brexit. The government is entirely tied up with one issue and unable to cope with others.”
Free trade hope
The nuclear power project is by no means Hitachi’s only investment in the UK. It is also involved in many other businesses related to transport and science.
Prime Minister Theresa May told Hitachi’s chairman Hiroaki Nakanishi last year that Britain would seek a free trade agreement with Japan following Brexit, although the time scale is unclear.

Handcuffed business hero protests his innocence from the dock

There’s been massive media coverage around the world this week of the court appearance by the former Nissan chairman Carlos Ghosn in Tokyo.

More than 1,100 people – some of them Nissan shareholders – queued for 14 seats in the public gallery.

Places for reporters were assigned by a lottery and no filming or photographs were allowed in court. However, artists were allowed to draw pictures of the accused and they provided the press with sketches of Mr Ghosn looking gaunt and stressed.

Detention without trial

Those images were beamed around the world, with a reminder that Mr Ghosn has been held in detention for fifty days without trial. He was led into the court in handcuffs and with a restraint around his waist.

Mr Ghosn was arrested out of the blue in November and accused of not disclosing his full compensation and of using company money for personal gain.

The court appearance itself was short – only ten minutes – during which he read from a prepared statement protesting his innocence.

He challenged allegations made by his former colleague, Nissan CEO Hiroto Saikawa, who has suggested that his former boss had “remained in charge too long and had come to treat Nissan as his personal fiefdom and was driven increasing by greed,” according to the Financial Times.

In response, Mr Ghosn said that he had dedicated two decades of his life to reviving Nissan and building its alliance with Renault. “I worked towards these goals day and night on earth and in the air, standing shoulder to shoulder with hard-working Nissan employees around the globe to create value,” he said.

Defence tactics

The BBC turned to an old friend, Seijiro Takeshita of Shizuoka University for analysis. He said: “Mr Ghosn wanted his voice heard. His tactic is to say that the top management of Nissan were aware of all his actions, so if Nissan knew about this, the focus will be on Nissan’s approach to corporate governance, rather than just Mr Ghosn personally,” said Professor Takeshita.

The FT’s Tokyo correspondent Leo Lewis discussed the case with Jesper Koll of Wisdom Tree Japan, a robust critic of Japanese business and government, who loves the media limelight. Mr Koll suggests that the arrest of Mr Ghosn is a national embarrassment which shows corporate reform in Japan has been an illusion. According to that way of thinking, writes Leo Lewis, “Whether Mr Ghosn has been felled by a corporate coup or some other design, he has fallen victim to an insiders’ club he could never hope to join. These are the rules of Japan Inc – love them or leave them.”

Back to prison

Mr Ghosn has now returned to his cell. The next step is for the court to decide whether to release him. However, prosecutors could arrest him for a fourth time if they have fresh allegations against him – meaning he’ll be locked up for even longer.

The media’s appetite for information about the case is far from satisfied and the story’s likely to stay in the headlines for many months to come.

Whale hunters ride another wave of criticism

I have been writing about Japan for many years but I always try to avoid the subject of whales.

Whaling generates a great deal of emotion and leads to criticism of Japan in the media, with the strong implication that other countries treat animals much better than the Japanese.

I can remember taking a few phone calls on this topic when I was working at the BBC’s office in Tokyo. When asked by colleagues in London to write about whales, I am afraid that I made an excuse that I was “busy on other topics”.

I am not a person who spends much time thinking about animal welfare or hunting. Perhaps I should.

Headline news

The international press keeps the issue high on the agenda.

Last week, Japan withdrew from the International Whaling Commission and said it would restart commercial hunting.

This issue became the lead story for the BBC on both its domestic and international outlets. “It means Japan will be able to freely hunt species currently protected by the IWC, like minke whales. Conservation groups warn the move will have serious consequences,” said the BBC website.

Shock reaction

The Times newspaper picked up on the issue in an editorial on December 27th. It said: “Japan’s decision further undermines the principle of a rules- based system of international conservation. In a free for all of hunting, it is entirely feasible that, like the great auk in the 19th century, the whale could eventually vanish. No one knows the wide effect that would have on the conystems. The disaster must be prevented.”

The New York Times struck a similar tone: “There is no commercial, cultural or scientific justification for killing these magnificent creatures. Japan: Stop Slaughtering Whales!”

So, it is abundantly clear that Japan’s position on whaling brings a torrent of bad publicity with some unpleasant diplomatic implications.

And yet very few people actually eat whales. According to Japan’s Asahi newspaper, whale meat makes up only 0.1% of all meat sold in Japan.

Why do it?

The Financial Times reporter Robin Harding explained that most whale meat ends up in government stockpiles. But he says “the issue is totemic for nationalists and crucial to certain fishing villages represented by members of the ruling Liberal Democratic Party.”

I gained further insight into the rationale behind whaling by watching a documentary on Netflix which aims to present the issue from a Japanese perspective.

The film is called Behind The Cove: The Quiet Japanese Speak Out!

It claims that the traditional approach to whaling ensures the preservation of species and brings great social benefits to some coastal communities.

The film also shows the “quiet Japanese” loudly shouting at foreign eco-warriors from a group called Sea Shepherd, which stages protests against whaling in the fishing villages, without understanding much about Japanese culture.

The film also raises a question which was absent from this week’s media reports on whales.

Why do people in other countries – including Australia, the EU and the US – make such a distinction between the precious lives of whales and the lives other animals, such as cows, sheep and pigs – or even fish?

My new year’s resolution is to keep an open mind on this topic as I am sure whales are going to hit the headlines again soon.

Are driverless trains the future of transport?

How would you feel if you caught a train in Japan and it had no driver?
Train travel is one of my favourite activities and I’m a particular fan of the transportation systems in Osaka and Tokyo.
So I was intrigued to learn that human-operated trains may be on the way out. Tests for a new driverless trains are scheduled to begin soon on one of Japan’s busiest and most important urban routes – Tokyo’s Yamanote Line.
Ghost trains
The scheme’s still at a test stage, according to Japan Kyo. It says that next week, after the ordinary trains stop running, the automatic driverless train will start operating on the track in the early hours of the morning.
“The Automatic Train Operation (ATO) system will be implemented into the Yamanote Line E235 trains. When engaged the system controls every aspect of the train’s movement, including its acceleration, cruising speed, and brakes,” says the piece.
Railway Gazette adds the significant fact that the Yamanote Line in Tokyo does not share tracks with other services, and this makes the trial appear viable. It says there’s also a plan to test driverless trains on the Tohoku shinkansen, or bullet train, which runs from Tokyo to Eastern Japan.
Several websites suggest that one of the goals of the railway company JR is to combat future shortages of personnel that will inevitably arise due to Japan’s ageing and shrinking population.
No complaints
There’s no sign of anger or resentment among the JR staff about the tests of automatic trains. They are certainly not going to provoke a strike by drivers or train crews.
That’s a big contrast to the situation in the UK, where plans to reduce the number of staff on trains have led to a series of strikes which have been going on since 2016, according to the BBC.
I am annoyed because the RMT union has arranged a strike over Christmas on the route I use to visit my family for the holiday.
The railway company South West Trains says that: “By announcing further strike dates, the RMT has shown it has no intention of finding a solution and is only interested in inflicting more misery on passengers as they try to enjoy the festive season.”
The union says that removing guards from trains threatens the safety of passengers although personally, I have never felt unsafe on a train with doors which are operated by the driver, rather than a guard.
Strikes are extinct
I’ve never been affected by a strike at any stage during the many years I’ve been going to Japan. I learn from the Japan Times that the strike has virtually become extinct.
University teacher Hifumi Okunuki writes that students in his class have never seen or heard of strikes.
In the article he explains: “I teach labour law to teenagers and 20-somethings at university but the most challenging lectures focus on strikes. The questions I field: “What is a strike?”, “Why would anyone do something like that?” and “What is the point?””
I suppose of course that the teacher could explain the political theory behind strikes, in that they empower workers to influence managers to make decisions in favour of the staff.
However, personally I don’t feel very positive about the liberating power of strikes at the moment, so I’ll leave it to Professor Okunuki to explain their value to people who’ve never had their life disrupted by one.
What’s your view? Have you experienced a strike in Japan? Do you think the workers should be more assertive and threaten to withdraw their labour if conditions are bad? Share your thoughts below.

Where is the Nissan chief Carlos Ghosn?

The huge story in Japan this month is the arrest of the former Nissan CEO and chairman Carlos Ghosn. But where is now? Why hasn’t he be photographed or filmed? And has he actually been charged with a crime?

Piecing together the news coverage makes it fairly easy to answer the first question about Mr Ghosn’s whereabouts.

According to Reuters, he is inside the Tokyo Detention House in Katsushika Ward. TV reporters have set up positions outside the building to do “pieces to camera” from there.

Reuters says: “The detention center, a tower-like structure in eastern Tokyo, is where the leader of the Aum Shinrikyo doomsday cult, which carried out the 1995 sarin gas attack on Tokyo subways, was executed by hanging this year.”

The death row part of the facility is separate to the one for people being investigated for crimes. But it does add another lurid detail to the sudden and dramatic change in circumstances, since Mr Ghosn flew into Tokyo on September 19th.

Asahi Television must have received a tip that something was happening at the airport. Somehow, it managed to obtain film of men in suits marching up the staircase into Mr Ghosn’s private jet. They quickly pulled down the shutters to prevent people seeing what was going on inside.

AFP agency suggests that Mr Ghosn spent several hours inside the plane with prosecutors – initially on a voluntary basis – and was later arrested.

AFP also says that at around 5pm, investigators raided Nissan’s plush Yokohama headquarters and another team stormed his luxurious apartment, in the affluent Tokyo neighborhood of Motoazabu. By 5:30 pm, word was out and hoards of camera crews swarmed around the building.

So far as I can tell, the reason that nobody’s managed to get any film or pictures of Mr Ghosn since his arrest is that he’s only been in his cell in the detention centre and the press can’t find a way into the building. This, of course, has prevented him from taking the opportunity to answer the claims of his accusers.

So far, Mr Ghosn has been denounced by his company but he has not been charged. This is due to a strange fact about Japanese law of which I was previously unaware. The Japan Times says that: “Japanese law permits the detention of suspects for up to 23 days before they are charged.”

This is a contrast to the situation in the UK, whereby the police can hold a person for up to 24 hours before they have to charge them with a crime or release them – although there are some exceptions for cases involving murder and terrorism.

It suggests that the legal system in Japan seems to press arrested people into confessing to crimes before there is any action in a courtroom. In this context, I am sceptical about reports on NHK that Mr Ghosn has “denied the charges against him” as it seems there are no charges to deny – yet.

Mr Ghosn will need a good lawyer to explain to him what is happening. The Asahi Shimbun claims that Motonari Otsuru, a former public prosecutor, has been hired to defend him.

Mr Otsuru will soon have the arduous task of becoming the public representative of his client before the press. And there are hundreds of journalists in Tokyo and around the world who are keen to hear what Mr Ghosn has to say.

Japan would make the perfect ally if Trump wants to raise the stakes with China

Asia’s leaders, including Japan’s prime minister, Shinzo Abe, are still trying to work out how best to respond to the disruptive, America-first policies of President Donald Trump. The November Midterm elections in the United States did not provide any solutions to their dilemma. Indeed, the outcome of the polls suggest that Mr Trump is almost certain to run for re-election as president in 2020. The Japanese must therefore continue to try to maintain an alliance with Mr Trump, difficult though that will be.

The elections allow Mr Trump to continue as America’s leader, with considerable support from his Republican party, which retains control of the Senate, even though a swing to the Democrats has enabled his opponents to take control of the House. Yet when it comes to trade policy, Mr Trump enjoys considerable executive power which he can wield autonomously. That is especially significant when it comes to China.

Tariffs on China

Mr Trump has imposed tariffs of about $250 billion on Chinese imports into the United States and has threatened to increase that figure dramatically.

China is not backing down and nor is Mr Trump. His hawkish attitude delights the conservative wing of the Republican party but there is also backing for his approach among many Democrats.

“I think the outcome of the Midterm elections strengthens Trump’s hand on China,” Professor Linda Yueh from Oxford University told me. “He may well press a bit harder and he could gain some bipartisan support. He’s considering truly massive tariffs in China next year. But will he do that at a time when growth in the US economy is slowing?”

Japan’s dilemma

For Japan, the US-China trade war creates a dilemma. Japanese businesses dislike the disruption it causes to their manufacturing processes. There is also resentment that the US maintains tariffs on Japanese steel exports to the United States, despite Mr Abe’s request to Mr Trump lift them.

These tensions come at a challenging time. The economy shrank in the third quarter of 2018 by an annualised rate of 1.2%. A Reuters poll of economists in Tokyo suggests they see the US-China trade war as the greatest threat to the Japanese economy next year.

The conservative perspective

Despite the risk, conservatives in Japan relish Mr Trump’s challenge to China’s enormous economic power and its increasing political influence. Mr Trump accused the Chinese of interfering in the election process in the United States by pressing voters to back his opponents.

“China was watching the race closely,” Professor Yueh told me. “The Chinese were putting pressure on them to stop the trade war, saying that there would be no winners,” said the professor.

One danger for Japan is that emboldened in his fight with China, Mr Trump becomes increasingly protectionist. The President has ordered an audit of all the countries which have a trade surplus with America, including Japan. “He believes that having a trade surplus means you’re not playing by the rules,” says Professor Yueh.

Free trade principle

Yet there is another option. Instead of allowing a narrow America-first approach to prevail, Mr Trump could recommit the Republican Party to its principle of free trade. In doing so he could reverse his decision to exclude the United States from the TPP international trade agreement, which is strongly supported by Japan. This would act as a counterbalance to Chinese influence.

Shinzo Abe can still claim TPP as a major political achievement, even if America remains outside it for the time being. When the partnership comes into force at the end of this year it will mark a rare victory for global trade liberalisation, with Japan very much as the driving force.