(Bloomberg) -- German Chancellor Angela Merkel is set to arrive in Japan for talks with Prime Minister Shinzo Abe on Monday, as both leaders brace against the U.K.’s increasingly chaotic course toward an exit from the EU.
Abe and Merkel, both 64, are two of the most outspoken defenders of the international order being shaken by Brexit and the U.S.-China trade war, as well as President Donald Trump’s questioning of decades-old alliances. The summit comes days after a Japan-European Union trade agreement came into effect, removing almost all tariffs.
Merkel will bring a delegation of top executives from companies including Siemens AG (DE:SIEGn) and Bayer AG (DE:BAYGN), and the two leaders are also expected to announce a basic agreement on information security that would allow more defense cooperation, according to Japanese government documents given to reporters. She arrives hours after Nissan Motor Co. announced it had scrapped a plan to build a sport-utility vehicle in the U.K., amid uncertainty over the country’s future ties with the EU.
Merkel called on EU leaders last month to shape the process of the U.K.’s separation from the Europe in a “responsible way.” Initially an outspoken opponent of Brexit, Abe has more recently called for it to be done in a way that minimizes the effect on Japanese businesses in the U.K.
Some of Japan’s biggest brands including Nissan, tech conglomerate SoftBank Group Corp. and fashion brand Uniqlo use the U.K. as their foothold in Europe and are worried they could get caught in the crossfire.
In a speech at the World Economic Forum at Davos, Abe said trust in the international trade system must be rebuilt, and urged reform of the World Trade Organization to keep it in line with global changes.
Japan and Germany -- the world’s third and fourth largest economies -- are both awaiting a Feb. 17 deadline for the U.S. Commerce Department to publish a report on the national security implications of auto imports that could justify tariffs on foreign cars.
Trump used the same legal provision to justify slapping steel and aluminum tariffs on countries including Japan last year. He could leverage the threat of car tariffs to pry open Japanese markets in upcoming bilateral trade talks.
As well as sharing concerns about trade, Japan and Germany have both come under fire from Trump for not spending enough on defense. Japan spends about one percent of gross domestic product on defense, while Germany spends about 1.2 percent, according to World Bank data.
