Japan is Asking PM May the Hard Post-Brexit Questions.

 

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Amid the smiles in the after-glow of the 2016 G20 Leaders Summit,  Japan is not mincing words.

They want to know what does ‘Brexit means Brexit‘ really mean for the significant Japanese investment in the UK and Europe. After a ‘masterclass‘ in the responsibilities the UK has to the free trade system; in a 10-page attachment, Japan catalogues a litany of requests for clarification by Japanese business interests who have sought clarification for the May Administration.

Japanese business interests have taken the time to provide the UK government with the detail of the post-Brexit definition of Japan-UK political, investment and trade relations.

If anyone was unsure exactly how complicated unravelling the EU-UK relationship will be, Japan’s note to PM May has provided all of the UK’s and the EU’s  trading partners – big and small –  exactly what is at stake.

After the usual courtesies the note continues:

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Uncertainty is a major concern for an economy. We hope that predictability is secured whereby all stakeholders, not just the negotiating parties, have a clear idea of the post-BREXIT landscape. This will be possible if the BREXIT negotiations are conducted through an uninterrupted and transparent process, which could include arrangements such as the establishment of a provisional period and, if there need to be institutional changes, the granting of time for the transition and publicising of such changes.

It then reminds the UK about the size of Japanese investment

A considerable number of Japanese businesses operating in Europe are concentrated in the UK. We have been informed of a variety of requests that these businesses have in relation to BREXIT including: maintenance of trade in goods with no burdens of customs duties and procedures; unfettered investment; maintenance of an environment in which services and financial transactions across Europe can be provided and carried out smoothly; access to workforces with the necessary skills; and harmonised regulations and standards between the UK and the EU.

It continues:

There are numerous Japanese businesses operating in Europe, which have created 440,000 jobs. A considerable number of these firms are concentrated in the UK. Nearly half of Japanese direct investment intended for the EU in 2015 flowed to the UK, and the UK was one of the major destinations for Japan’s investment stock within the EU as of the end of last year. While benefiting from the single market of the EU, Japanese businesses have contributed to the development of the European economy. Since Europe including the UK is a major trading partner and investment destination for other countries in Asia as well as of Japan, it is in the common interest of all Asian countries as a whole that they continue to have access to the free market of Europe, including the UK

The note then turns to the reason for the communication:

We have been informed of a variety of requests that these businesses have in relation to BREXIT including: maintenance of trade in goods with no burdens of customs duties and procedures; unfettered investment; maintenance of an environment in which services and financial transactions across Europe can be provided and carried out smoothly; access to workforces with the necessary skills; and harmonised regulations and standards between the UK and the EU.

If you are looking for a list of questions the ansers to which will clarify the definition of Brexit Japan’s Post-Brexit note to PM May is very good place to start.

Read it here.

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