Most Japanese companies, operating in Britain, would like to expand their capacity but are prevented from doing so by the uncertainty around the future of UK-EU economic relationship, the country’s ambassador to Britain has revealed.
There are around 1000 UK-based Japanese companies that, like other small and large businesses in Britain, are put off by the state of negotiations between London and Brussels.
More Japanese companies could relocate away from Britain in the coming months if the uncertainty around Brexit does not lift, the country’s ambassador to Britain has told Sky News.
“These are all global companies and therefore they have other possibilities other than staying. They may relocate. Or they may combine or consolidate. But you can’t make those decisions until you know what’s going to happen next. This is very important,” Ambassador Koji Tsuruoka said.
The correct term to be used in the current situation, according to Mr. Tsuruoka, is “perplexed.” Businesses are perplexed by the vagueness of their future in the UK, putting on hold their investments, he said.
“They [Japanese people] would like to know what’s happening. And it’s difficult to understand what’s happening and where it will lead. They are asking questions and are not able to find satisfactory answers,” the ambassador added.
Among companies, affected by lack of clarity on trade rules between the UK and EU were Japanese car manufacturers Nissan and Honda, which have decided to halt or limit their operation in the UK.
READ MORE: Brexit Uncertainty Blamed for Reported Shutdown of UK Honda Factory in 2022
If the UK leaves the European Union without an agreed deal on 29 March, the EU — Japan Economic Partnership Agreement (EPA) will not roll over for Britain. The grim outlook, confirmed by the UK Trade Minister Liam Fox, came in February when it was revealed that the UK has only managed to secure deals with 7 of its 69 trade partners.
READ MORE: UK Secured Only 7 of 69 Trade Partners Ahead of Looming Brexit
During his latest visit to Japan, Liam Fox agreed with his counterparts to use the EU-Japan EPA as a basis for a “new and stronger partnership.”
In his latest comments, Mr. Tsuruoka said that the UK was welcome to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) — a free trade agreement between Canada and 10 other countries in the Asia-Pacific region. The ambassador however added that he foresees a bilateral trade deal between London and Tokyo in the nearest future.