Sunday, September 4, 2016

Japan's Unprecedented Warning To UK Over Brexit

Japan pulls no punches in a 15-page report, warning that companies may leave the UK if Brexit negotiations are unsatisfactory.

At the start of the G20 Summit, the Japanese government has taken the unprecedented step of warning of a series of corporate exits, "great turmoil" and harmful effects if Brexit leads to the loss of single market privileges.


An official Japanese government task force on Brexit, has collated views of big Japanese companies from car companies to banks and pharmaceutical companies that invest in the UK.

It has produced a 15-page list titled "Japan's message to the UK and the EU", detailing requirements from Brexit negotiations.

It lists the consequences if the requirements are not delivered.

Half of Japanese investment in the EU comes to the UK including companies such as Nissan, Honda, Mitsubishi, Nomura and Daiwa.


"Japanese businesses with their European headquarters in the UK may decide to transfer their head-office function to Continental Europe if EU laws cease to be applicable in the UK after its withdrawal," the report concludes.

It says: "In light of the fact that a number of Japanese businesses, invited by the Government in some cases, have invested actively to the UK, which was seen to be a gateway to Europe, and have established value-chains across Europe, we strongly request that the UK will consider this fact seriously and respond in a responsible manner to minimise any harmful effects on these businesses."

The list is the most tangible account anywhere of what businesses are asking for from the Brexit negotiations.

It suggests Japanese car companies fear that they will be hit by a double whammy of trade tariffs.

There were fears of levies being imposed twice "once for auto parts imported from the EU and again for final products assembled in the UK to be exported to the EU - which would have a significant impact on their businesses."

The report also states that the UK leaving the EU would damage exports from Britain to third countries because of trade privileges within the EU single market around so-called "rules of origin".

"Brexit would make such products unable to meet the rules of origin as EU products, which means that Japanese companies operating in the EU would not be able to enjoy the benefit of the Free Trade Areas concluded by the EU," the report said.

See more at: www.news.sky.com


Prime Minister Shinzo Abe. Image: You Tube

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