New UK–Japan Economic Partnership to propel growth

A new partnership between the UK and Japan will unlock further growth for British business – advancing a relationship worth £27 billion annually and driving forward the government's Plan for Change.

It comes as the Foreign Secretary and Business Secretary travel to Japan today (6^th March 2025), for the Economic 2+2, a new strategic way for the UK and Japan to coordinate international economic policy. The visit is part of the government delivering its Plan for Change, to boost growth, create jobs and put more money in people's pockets.

Economic growth and future prosperity depend upon strong security foundations, a reliable trading system, resilient supply-chains, energy security, and an economy resilient to shocks.

Japan's decision to enter into an Economic 2+2 with the UK, a Dialogue that they only currently have with the US, demonstrates that Japan and other major world economies view the UK as an important partner for driving long-term sustainable growth and security. 

UK-Japan joint defence industrial projects are driving jobs across the UK while providing new defence capabilities and protecting British security interests in the Indo-Pacific.  

This is delivered through programmes like GCAP (Global Combat Air Programme), the UK, Japan and Italy's joint future fighter jet programme. The programme currently employs more than 3,500 people, including engineers and programmers, across the UK, and British workers are building jets that will protect British security interests and international trade, whilst boosting jobs in the UK.  The 2+2 will encourage future opportunities to collaborate on growth and defence. The Foreign Secretary will see the impact these programmes are having first hand during a visit to Japan's Ministry of Defence and meetings with UK companies actively engaged in GCAP.  

This further builds on the Prime Minister's announcement that defence spending will increase to 2.5% of GDP from April 2027. Investments in defence like GCAP will protect UK citizens from threats at home but will also create a secure and stable environment in which businesses can thrive and increase jobs, supporting the Government's number one mission to deliver economic growth. In 2023-24, defence spending by the UK Government supported over 430,000 jobs across the UK, the equivalent to one in every 60. 

The Foreign Secretary, David Lammy, said: 

“This government is boosting growth to the UK by taking our relationships with major economies like Japan to new heights. It's fantastic to arrive in Tokyo with a business delegation as we start a first of its kind economic dialogue.

The UK and Japan's interests have never been more closely aligned. From our shared understanding of the indivisibility of Euro-Atlantic and Indo-Pacific security, to our desire to grow more together as we embrace the opportunities of new technologies like AI.

By working more closely with Japan, we will give UK firms more business, puts money in people's pockets and help deliver our Plan for Change.”

Business and Trade Secretary Jonathan Reynolds said:

“I'm looking forward to having the chance to discuss how the UK and Japan can strengthen the many economic ties that bind our two countries together as we deliver on our Plan for Change. 

“The UK and Japan share a proud, historic trading relationship that has only deepened in recent years, opening up new opportunities for businesses in both of our countries, and with our upcoming Industrial Strategy we will find even more common ground.” 

The Economic 2+2 will strengthen UK and Japan cooperation in a range of areas– such as continued commitment to a fair-trading system, joint research into the technologies of the future and mutual investment to support growth, innovation and jobs in the defence industry. 

The joint visit will also move forward work with Japan on our modern, ambitious Industrial Strategy. Japan is an incredibly important investment partner, with 1,000 Japanese companies supporting 160,000 jobs in the UK. The UK's accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) combined with the new economic partnership announced today will strengthen that relationship even further. 

A business delegation, representing the key high growth sectors of the future, will travel alongside the ministers to see firsthand the opportunities for growth and development UK-Japanese collaboration will bring. The Foreign Secretary and Business and Trade Secretary's discussions with Japan will give UK businesses access to Japanese industry and further open up trade. Japan is a manufacturing powerhouse - ranking third globally in terms of value added to the manufacturing industry.  

Chief Economist at the CBI – member of the travelling business delegation – Lousie Hellem, said:

"Cooperation with like-minded partners like Japan will be critical to achieving the government's Growth Mission.  

"As a significant and growing trading partner, Japan's economy offers unique opportunities for UK firms looking to expand and internationalise. This delegation is an important next step in our relationship, enabling both governments to explore deeper collaboration across topics like digital and technology, advanced manufacturing, and sustainability. 

"As the voice of business, the CBI will continue to work closely with our Japanese sister federation - Keidanren - in the B7, B20 and bilaterally to promote a strong and mutually beneficial UK-Japan relationship." 

In Tokyo the Foreign Secretary and Business and Trade Secretary will host an AI Business Reception to promote the UK's AI Opportunities Action Plan and discuss with Japanese AI leaders the scope for new growth opportunities between British and Japanese AI. 

During the visit, the Business and Trade Secretary will announce plans to develop a new Industrial Strategy partnership - the first of its kind for Britain, as well as sign a UK-Japan Memorandum of Cooperation on Offshore Wind as the UK races ahead to net zero.  He will meet with global automotive manufacturers Nissan and Toyota, and with CPTPP Minister Akazawa – their first meeting since the UK's accession to the trade group last year. 

While in Tokyo Reynolds will also tour some iconic UK exporters, visiting major brands including Warhammer, Brompton and Burberry. UK exports to Japan totalled £14.7 billion in the 12 months to September 2024 - an increase of 5% from the previous year. 

The Foreign Secretary will travel onto the Philippines, where he will drive forward cooperation with one of our key security partners in the region. Growth and security go hand in hand – a third of global maritime passes through the South China Sea - and so the Filipinos' work to stand up for freedom of navigation and international law in the region is vital to ensure these trade routes remain safe and secure.