The British Prime Minister Theresa May arrived in Japan with an eye to sooth Brexit fears and pushing ahead the free trade talks with the world’s number three economy. He visited Japan an official visit, on Wednesday.
He was scheduled to sit with Toyota chairman during her three day tour which starts in Osaka. Then she moved to Tokyo where she will meet with Prime Minister Shinzo Abe and Emperor Akihito who visited Britain this year.
In March, formally Britain told the EU that it will withdraw itself from the 28 member bloc, stirring behind the fears in Japan about what the move would mean for companies with significant business interests.
Ahead of May’s visit, the Japanese foreign ministry, who is official in charge of European affairs said,” We are going to ask for transparency and predictability so to minimise the impact on our companies.”
Around 10000 Japanese companies do business in Britain in which around 1,40,000 local people are employed with and many of them were using Britain as as a staging post to do business in Europe.
Toyota and Nissan the famous Auto parts makers company have factories in Britain, while last year technology giant SoftBank announced the purchase of $32 billion British iPhone chip designer with ARM Holding.
But, now the Britain is at risk of losing its passporting rights that the financial firms use to deal with clients in the European bloc. The foreign companies that set up shop in Britain and established European headquarters to begin looking for alternative locations, the political uncertainty has spurred them.
Japanese megabank Mitsubishi UFJ has said,” Amsterdam and Paris were favourites to be the new European base for its securities operations.”
Daiwa Securities, Brokerage Nomura and Sumitomo Mitsui Financial Group are planning to move their main EU bases from London to Frankfurt.
Boris Johnson, the foreign minister of Britain has boasted about Japan and UK investment when he visited there but the local firms, who is travelling with their business delegations, keep looking for solid assurances from May.
Ichiro Hara, head of the international affairs bureau at Japan’s top business lobby Keidanren said, “The best scenario for us is that Britain cancels its Brexit decision.”
He told AFP,” if that is not an option we are saying we need a transitional period to mitigate its negative impact.”
May is also expected to focus on pushing forward the free trade agreement plans between Britain and Japan .
But analysts said that until Japan and the EU wrap up a nearly finalised trade deal and details of Brexit are worked out there would not be much progress.
Osamu Tanaka, a senior economist at Daiichi Life Research Institute, ” you cannot start official talks about such an idea until Britain leaves the EU.”