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Japan in plea to UK as it warns over Brexit impact on firms operating in country

Published 04/09/2016

Car manufacturers including Honda, Nissan and Toyota all have major manufacturing bases in the UK
Car manufacturers including Honda, Nissan and Toyota all have major manufacturing bases in the UK

Japan's government has issued a stark warning about the possible impact of Brexit on the country's firms operating in the UK.

The Tokyo government published a list of demands aimed at protecting the country's car manufacturers and financial institutions and jobs of Britons working for Japanese firms.

The 15-page ministry of foreign affairs document, based on requests from Japanese firms, urged Theresa May's Government to behave in a "responsible manner".

The official report said: "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 document also warns that head offices of Japanese firms in the UK could be shifted to the continent if EU regulations no longer apply after Brexit.

"The Japanese business community hopes to see the UK implement measures to promote investment including the easing of regulations to make the UK a more attractive investment destination," it said.

"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 urged the negotiations between the UK and EU to be carried out as early as possible.

"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."

Among the requests made by Japanese firms were maintaining "access to workers" who are nationals of the UK or EU - which could mean effectively keeping free movement.

Tokyo also called for the maintenance of current tariff rates and customs procedures and for the UK to keep the existing rules relating to financial services including the "single passport" regime which allows firms in one member state to operate in another without seeking further authorisation.

Car manufacturers including Honda, Nissan and Toyota all have major manufacturing bases in the UK and the report warns Brexit could hit them hard by imposing extra levies.

The report noted "manufacturers, especially of automobiles, could have such levies imposed twice, once for auto parts imported from the EU and again for the final products assembled in the UK to be exported to the EU, which would have a significant impact on their businesses".

Mrs May is expected to have a brief meeting with Japanese leader Shinzo Abe at the G20 summit on Monday.

A Number 10 official said: "Much as we want to take the time, as we prepare for negotiations, to understand where stakeholders in the UK are coming from, British businesses, different economic sectors, it is not unhelpful to have some of our trading partners setting out some of the issues that they are looking at."

It was "more information that helps to inform our thinking on what is the right deal for Britain", the official said.

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