More deregulation needed to attract investment: former British ambassador

by William Hollingworth

Kyodo

Japan needs to further deregulate its markets to attract overseas investment and boost economic activity, said David Warren, who stepped down earlier this month as Britain’s ambassador to Tokyo.

Japan can seem a “complex and heavily regulated” environment for foreign companies, Warren said, voicing hope that the European Union and Japan will soon agree to start formal negotiations on a free-trade agreement to remove remaining barriers.

“Recent governments have tried to attack (the regulations), but there is a lot more to do to tackle the unnecessary and disproportionate regulations which hold back economic activity,” said Warren, who will retire from the Foreign Office in January.

He said an FTA would send a powerful message that Japan is “committed to welcoming foreign investment to a higher degree than we have already seen so far.”

Warren, who was ambassador to Japan for 4½ years, said a trade accord would particularly benefit Britain’s life sciences and pharmaceutical companies, which often find themselves bogged down in Japanese regulations.

During an interview in London, he described the March 2011 natural disasters in the Tohoku region as the most “challenging” period of his long career. Embassy staff were “working round the clock,” he said.

Britain, judging that the risks of radiation from the Fukushima No. 1 plant were “manageable,” kept the embassy open and did not advise British citizens to evacuate Tokyo.

“This was inevitably a tiring and sometimes stressful process, but I have to pay tribute to the wonderful team in the embassy, which was strengthened by 80 staff from overseas,” Warren said.

He also paid tribute to British residents who remained calm during the crisis, and he praised those who stayed in Japan to offer support and solidarity.

Warren said he hopes in the future British firms will be able to offer their expertise to Japan in the decommissioning and decontamination of nuclear sites, including Fukushima.

The former ambassador believes that Britain, given its long history of using nuclear power, can also offer Japan advice on improving the regulatory regime.

Warren said he is “disappointed” Japan has so far failed to join the Hague Convention requiring the return of children taken out of their home country by one parent without the consent of the other.

He hopes Japan will reintroduce draft legislation early in the next Diet session, leading to the treaty being incorporated into domestic law.

“It’s an important issue because we have an increasing number of left-behind parents who are in custody disputes. These are often very difficult cases,” he said, referring to such British parents, mostly men whose Japanese wives have returned with their children to Japan.

Although the government submitted a bill in March to endorse the 1980 Hague Convention on the Civil Aspects of International Child Abduction, the bill was scrapped when the Diet was dissolved Nov. 16 before deliberations were started.

Warren asserted that Anglo-Japanese relations are currently “very strong” and are going from “strength to strength.”

He said both countries share similar views on foreign policy, and there are now nearly 1,400 Japanese companies with operations in Britain that employ almost 120,000 people. Future Japanese investments in online retailing and computer games technology are planned.

Japanese firms already play a major role in Britain’s car manufacturing industry and are also contributing to nuclear and rail infrastructure projects.

In the future, Warren, 60, said he will continue to “bang the drum for Japan” in Britain and upon his retirement will become chairman of the Japan Society in London.

Warren’s successor, Timothy Hitchens, is due to become ambassador at the start of December.