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Japanese prime minister wants Brexit detail from Theresa May

Published 05/09/2016

Nissan's plant in Sunderland
Nissan's plant in Sunderland

Japan's prime minister has told Theresa May to give more detail about her plans for Brexit amid concerns that his country's firms could be forced to pull investment from the UK.

Shinzo Abe said he wanted more "predictability" about the Brexit process and measures to ensure Japanese firms based in the UK would not suffer as a result of leaving the European Union.

The two leaders met for brief talks in the margins of the G20 summit in Hangzhou, China, following the publication of an extraordinary 15-page dossier listing Japan's concerns about the UK cutting ties with Brussels.

Mr Abe told the Prime Minister he attaches "extreme importance" to the relationship with the UK and reminded her of the level of Japanese investment in Britain, which is partly due to membership of the EU single market.

"Prime minister Abe requested her co-operation to enhance predictability and to continue to secure Japanese companies' businesses and value chains," Japan's ministry of foreign affairs said in a statement.

"In response, Prime Minister May mentioned that she recognizes that the result of the UK referendum to leave the EU is having influence on the international community including Japan, and expressed her hope that the Japan-UK economic relationships will be maintained and strengthened."

Japan's ambassador in London said he had spoken with executives at leading Japanese firms in the UK and none of them wanted to pull out. But he stressed that all options are open to the companies, which have a duty to their shareholders to remain profitable.

Koji Tsuruoka told the BBC Radio 4 Today programme that hundreds of Japanese companies have operations in the UK, adding: "They are companies responsible to their stakeholders and their duty is to produce profit.

"If the way Brexit ends up does not provide companies with a prospect of making sufficient profit to continue operating in the UK, of course there is no option that they can't choose. All options are open to them."

Asked whether that could mean a company like Nissan closing its car plant in Sunderland, Mr Tsuruoka said: "These are exactly the predictions that are going to hurt the future of the economy because these decisions have not been made.

"I have been talking to a number of Japanese business leaders operating in the UK and they all agree that the UK is the best place to do business in Europe. They want to continue to operate from the UK, and the list of issues we have put out to the UK as well as the EU are issues that they are seeking to achieve.

"However, there is a negotiation that will have to be conducted and if these requests are not met, then it will be for industry to decide what to do.

"It is very difficult to imagine that all Japanese companies - including the auto companies - will be pulling out in totality from UK, because the UK economy will be here and vibrant and it will be a good market for auto manufacturers to continue to sell their cars.

"The problem we will have to confront is what is the market that could be accessed for production outside of the UK? If there are conditions that block Japanese auto makers' cars being exported to continental Europe, such as customs duties, that of course will affect the competitive nature of the pricing of the cars.

"But that is also something that can be affected by the currency exchange rates as well. It is not just customs duties."

Mr Tsuruoka said Tokyo wanted to see a "well thought-through consideration" of the issues before formal talks on the UK's withdrawal from the EU begin, and welcomed Mrs May's "cautious and very patient" approach to the invocation of Article 50.

Japan accepted that Brexit will happen, as a democratic decision of the British people, he said. But he warned that European and international economies could be damaged if withdrawal harms the UK economy, adding: "Therefore we have a very important stake in making Brexit a success that will not damage or hurt the global economy."

Mrs May said countries including Japan were "confident" about the UK's future.

Asked about her meeting with Mr Abe, she said: "We were both very clear that we will be working together to ensure that we can maintain and build on our relationship.

"And if you think about it, the single biggest vote of confidence in the UK in terms of inward investment, since the referendum, was from a Japanese company - from Softbank and its £24 billion proposal to buy ARM."

Challenged to guarantee that jobs at Japanese car factories in the UK were safe, the Prime Minister said: "What I have found good about the discussions I have had with a number of world leaders, including the discussions I have had with prime minister Abe, is the willingness from other countries to talk to the UK about future trade arrangements and the confidence that they have in the UK."

She added: "I am confident and others have been confident about the relationship we can build with them."

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