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Brexit: Japan says trade deal with EU is a greater priority than deal with UK

Japan is extra centered on a securing main commerce deal with the European Union than pursuing an settlement with a post-Brexit Britain, a senior minister has mentioned.

Shinichi Iida, minister for public diplomacy and media, mentioned his nation’s “at first precedence” was rubber-stamping its historic commerce settlement with Brussels – the biggest the EU has ever signed – earlier than work may start on establishing profitable free commerce offers with the UK.

As one of many UK’s main traders, Japan has been outspoken in its concerns over Brexit, with its ambassador warning Theresa Might earlier this yr that its firms could leave Britain if a chaotic exit makes it “unprofitable” for them to remain.

Automobile giants Nissan, Honda, Toyota and Mitsubishi are amongst greater than 1,00zero Japanese companies working in Britain, using 160,00zero employees in areas corresponding to Sunderland.

In an interview with The Unbiased, Mr Iida mentioned Japanese companies had been “involved” about Britain’s plans to go away the bloc, after establishing store in Britain partly to safe entry to the European single market.

He mentioned his nation would like if the UK remained within the single market – one thing the prime minister has dominated out – and prompt that the Authorities’s place may change because the EU are “robust negotiators”.

Providing a lift to the prime minister, Mr Iida mentioned his authorities welcomed her “consistency” however warned that Japan could be watching carefully because it has a “massive stake within the Brexit course of”.

Talking on the Japanese embassy in London, he mentioned: “Frankly, our at first precedence in the intervening time is the early effectuation of the Japan-EU financial partnership settlement.

“Having mentioned that although, as soon as the Japan-EU financial partnership settlement comes into pressure, it may present an excellent and sound foundation for the longer term commerce between Japan and UK.”

Mr Iida indicated that casual commerce discussions are underway between Japan and the UK at senior official stage however no deal could possibly be signed till Britain leaves the bloc.

He mentioned: “A number of Japanese corporations, to be very frank, are involved with the prospect of the Brexit as a result of it’s not a secret that a variety of Japanese manufacturing corporations, particularly, have invested within the nation for the market entry to the continent of Europe.

“It’s an important issue for them, so market entry after the commerce settlement is made between the UK and the EU is an important issue for lots of Japanese companies working on this nation.”

Some Japanese monetary establishments have utilized to arrange companies in Europe after it emerged that the UK would lose “passporting rights” when it leaves the single market, which permit banks to promote companies throughout Europe with none boundaries.

Mr Iida mentioned: “Because it’s been made clear by each the UK Authorities and likewise the European Union single passport system wouldn’t be capable of apply, it’s true that some Japanese monetary establishments have submitted the applying for companies in continental Europe.”

He added: “However each with regard to Japanese manufacturing corporations and likewise monetary establishments, so far as we all know there is no such thing as a Japanese firm that has determined to maneuver their headquarters outdoors of the UK.

“They’ve been very cautious and we haven’t had any indication from any of them [that they will] make a hasty resolution in that regard.”

The rights of EU residents stays a flash level for Japanese corporations, who make use of massive numbers of workers from continental Europe of their companies right here, Mr Iida mentioned.

He mentioned: “One of many main voices of concern, if you’ll, from the Japanese companies is the authorized standing of the EU residents.

“As I mentioned, Japanese corporations general have employed 160,00zero individuals within the UK, but it surely’s not shocking that a lot of them will not be British, they’re EU residents subsequently their authorized standing within the quick future after Brexit was a serious supply of concern for lots of Japanese corporations.” 

Japan would like the UK to stay within the single market and the customs union, but it surely has accepted the prime minister’s assertion that each choices are not a part of Britain’s long run future, he mentioned.

“We initially wished the UK to be a part of the only market and likewise we indicated the chance that UK would possibly be capable of keep within the customs union however prime minister Might was very clear that Brexit means the departure from the only market and likewise the departure from the customs union,” Mr Iida mentioned.

“She has been constant in that regard within the Florence speech [given in September 2017] and she or he has been constant in that regard within the Mansion Home speech [given last month] and that sort of consistency is essential.”

Requested if Britain may change its thoughts on the only market, he mentioned: “Negotiation with the EU is extraordinarily robust. We so nicely understand how arduous a negotiator the EU is.”

“Any negotiation is an artwork of compromise so I would not be shocked in any respect if the UK’s authentic place was just a little completely different once they attain the ultimate settlement with the EU.

“The Japan-EU financial partnership settlement may be very completely different from Japan’s authentic place that we held 4 and a half years in the past.”

Ms Might sought to woo Japanese companies by way of a high-profile go to to the nation final yr, in addition to chairing a roundtable assembly between prime Japanese traders and a few of her most senior ministers, together with Philip Hammond, the chancellor, enterprise secretary Greg Clark, and commerce secretary Liam Fox in February.

Whereas in Tokyo, she obtained assurances from Japanese prime minister Shinzo Abe that it hopes for a copycat commerce deal as soon as Britain leaves the bloc.

Nonetheless the UK can not start signing commerce offers till it has formally left the union, beneath EU guidelines.

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