Japan warns firms could leave UK over Brexit

Japan’s government has delivered a stark warning to the UK government that Japanese companies — especially financial and pharmaceutical firms — could leave the UK unless a “soft” British exit from the EU can be negotiated “ensuring the outcome is free of unpleasant surprises.”

Companies from Japan — including Nomura bank, Nissan, Toyota, Hitachi and Honda — employ roughly 140,000 people in the UK.

The warnings in Japan’s 15-page report include:

  • “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.”
  • “If Japanese financial institutions are unable to maintain the single passport obtained in the UK, they would face difficulties in their business operations in the EU and might have to acquire corporate status within the EU anew and obtain the passport again, or to relocate their operations from the UK to existing establishments in the EU.”
  • “Many Japanese pharmaceutical companies are operating in London, due to the European Medicines Agency’s location in London. If the EMA were to transfer to other EU Member States, the appeal of London as an environment for the development of pharmaceuticals would be lost, which could possibly lead to a shift in the flow of R&D funds and personnel to Continental Europe. This could force Japanese companies to reconsider their business activities.”

Japan said it “earnestly hopes that the Brexit process will move forward smoothly.”

“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,” said the statement.

“From this perspective, we strongly hope that the UK and the EU will present to the world the whole picture of the Bexit process as early as possible, cooperating to avoid a vacuum or stagnation in their relations and instead generating a seamless process towards Brexit that could include arrangements such as the establishment of an extendable transitional period during which an interim agreement could be applied if required, and immediately disclosing measures to eliminate any harmful effects on businesses already investing in the UK and the EU.”

It added: “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.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.