The Japanese government has sent a warning message to Britain that its firms with current European headquarters in the UK may leave in the face of Brexit.
Japan’s foreign ministry has published a statement suggesting that Japanese firms may pull out of the UK depending on how Brexit talks are handled.
It states: “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.”
With Japan’s Hitachi, Fujitsu, Toyota, Nissan and Honda all having a sizeable presence in the UK, the statement poses a potentially significant impact on the country’s manufacturing sector. Combined, the five firms alone employ almost 38,000 people.
According to the report, “uncertainty is a major concern for an economy,” and that “Japan shares basic values and enjoys strong partnerships with the United Kingdom”.
It goes on to say that a considerable number of UK-based Japanese firms are worried about the current uncertainty surrounding Brexit.
Concerns cited included trading duties and procedures; access to unfettered investment; harmonised UK-EU regulations; access to workforce and skills, and being able to carry out financial transactions across Europe.
Japan and the EU are currently negotiating on a new free trade agreement between the two nations which is expected to be finalised before the end of the year.
According to reports, Japan is the EU’s second biggest trading partner in Asia after China.
The statement makes several requests, including:
- maintenance of the current tariff rates and customs clearance procedures
- maintenance of the access to UK or EU national workers
- maintenance of the freedom of establishment and the provision of financial services, including the “single passport” system
- maintenance of the freedom of cross-border investment and the provision of services, as well as the free movement of capital, including that between associated companies
- maintenance of the current level of information protection and the free transfer of data
- unified protection of intellectual property (IP) rights
- maintenance of harmonisation of the regulations and standards between the UK and EU
- securing the UK’s function as a clearing centre for the euro and the location within the UK of EU agencies such as the European Medicines Agency
- maintenance of the UK’s access to the EU budget for R&D and participation in the Japan-EU joint research project
