Brexit: Japan warns firms may move European HQ out of Britain



Hitachi UK train factory Image copyright Getty Images
Image caption Japan’s prime minister warned before the referendum that investment could fall if the UK left the EU

Japan’s government has warned that Brexit could result in the country’s firms moving their European head offices out of Britain.

The strongly worded report from Japan’s foreign ministry says the firms might want to move “if EU laws cease to be applicable in the UK”.

It calls on Theresa May’s government to behave in a “responsible manner”.

Downing Street received the report earlier this week, the BBC’s Laura Kuenssberg understands.

Japanese firms employ about 140,000 workers in the UK, with Nomura bank, manufacturing giant Hitachi and carmakers Honda, Nissan and Toyota all having major bases in the country.

The letter warns: “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.”

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Image copyright Reuters

Image caption Nissan is one of three major Japanese car manufacturers with a large presence in the UK

Specific companies are not mentioned, but the document states that it was written in response to “a variety of requests from Japanese businesses operating in the UK and the EU”.

The report was published on Friday before Prime Minister Theresa May went to China for the G20 summit, where she will explain what Britain’s decision to leave the European Union might entail.

Earlier, Mrs May said she would use the G20 to scope out trade deals so they could be signed quickly after the UK’s exit from the EU.

President Barack Obama, however, stressed that the US would prioritise trade talks with the Asia-Pacific region and the EU.

Image copyright Reuters

Image caption President Obama and Theresa May discussed Brexit at the G20 summit

‘Early as possible’

The Japanese report “strongly requests” that the UK government will consider Japanese investment into the UK and “respond in a responsible manner to minimise any harmful effects on these businesses”.

It urged that Britain and the EU set out the details of the Brexit process “as early as possible”.

In particular, the document says Japanese firms would like to see the following agreed between Britain and the EU:

  • Maintenance of trade in goods with no burdens of customs duties and procedures
  • Unfettered investment
  • An environment in which services and financial transactions across Europe can be provided and carried out smoothly
  • Access to workforces with the necessary skills
  • Harmonised regulations and standards

Ahead of the referendum, Japanese firms, including Hitachi and Nissan, and the country’s Prime Minister Shinzo Abe warned investment could fall if the UK left the European Union.

Analysis: Joe Lynam, Business Correspondent

Usually these missives from one government to another are behind closed doors. This note from Japan couldn’t be clearer: we want Britain to retain single market privileges.

It implies that many Japanese firms are in Britain purely to have tariff-free access to the EU (and passporting rights).

If that can’t be maintained or there’s no transparency about what the UK wants to achieve from Brexit, i.e. “a clear idea of the post-Brexit landscape”, some Japanese firms could move.


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