Brexit messages from US and Tokyo
Japan warns investment relies on UK access to EU
The Tokyo government calls for quick decisions to end uncertainty and reminds the UK government that Japan’s investment in the UK was based on it being a “gateway to Europe”.
In a message to Westminster and the EU, it accepts that the negotiations “are sure to encounter difficulties from time to time”, adding that it has “no doubt that the UK and the EU will overcome such difficulties and lay the foundations for the creation of a new Europe.”
However, it warns that uncertainty “evokes a sense of anxiety, causing volatility in markets, and results in the contraction of trade, investment and credit.”
It says: “What Japanese businesses in Europe most wish to avoid is the situation in which that they are unable to discern clearly the way the Brexit negotiations are going, only grasping the whole picture at the last minute.”
Ahead of the G20 summit in China, US president Barack Obama also issued a Brexit warning, stating that the UK would not be the priority for a US trade deal.
He said the US would stand by the UK, but he repeated his view that Brexit was a “mistake” and that London would not be able to jump the queue to arrange a bilateral deal.
The 15-page message from Tokyo added: “It is imperative for the UK and the EU to regain the confidence of the world and ensure their unwavering competitiveness by increasing the predictability of the Brexit process, ensuring the outcome is free of unpleasant surprises and reducing the risks emanating from uncertainty.
“We strongly hope that the UK and the EU will present to the world the whole picture of the Brexit process as early as possible, cooperating to avoid a vacuum or stagnation in their relations…and immediately disclosing measures to eliminate any harmful effects on businesses already investing in the UK and the EU.”
The message notes that Japanese businesses operating in Europe have created 440,000 jobs, a considerable number in the UK with companies such as Hitachi and Nissan in north east England, Nomura Bank in the City and the Toyota in Derbyshire.
It says these businesses have invested in the UK on the grounds that it was a “gateway to Europe”.
“Nearly half of Japanese direct investment intended for the EU in 2015 flowed to the UK, and the UK was one of the major destinations for Japan’s investment stock within the EU as of the end of last year.
“It is in the common interest of all Asian countries as a whole that they continue to have access to the free market of Europe, including the UK,” it says.
“It is of great importance that the UK and the EU maintain market integrity and remain attractive destinations for businesses where free trade, unfettered investment and smooth financial transactions are ensured.
“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.
“We have been informed of a variety of requests from Japanese businesses operating in the UK and the EU that include clarity as to how the Brexit process is set to unfold, and, where there are institutional changes, the granting of a sufficient time for the transition and publicising of the changes, safeguarding of market integrity between the UK and the EU, and the maintenance of the free trade system.
“They have also issued the requests outlined below so that they can carry on their economic activities as freely as before, regardless of the outcome of the negotiations between the UK and the EU.”
SNP spokesman on international trade in Westminster, Tasmina Ahmed-Sheikh, said: “This document lays bare the grim reality of Brexit for jobs and business in Scotland, and sets out why we must do everything we can to protect Scotland’s membership of the EU.
“The Tories’ leader in Scotland promised in September 2014 that ‘No means we stay in’ the EU. Her party has a lot of work to do to ensure Scotland is not dragged out of the EU against its will because of the incompetence of a government led by a Tory party Scotland didn’t vote for and hasn’t for nearly 60 years.
“From the adverse impact on Scotland’s financial services sector if the passporting issues are not resolved, to the added costs and inflated bureaucracy that would flow from being outside the customs union, our economy shouldn’t be seen as expendable to achieve Liam Fox’s isolationist fantasy.”