Fear of no-deal Brexit leaves Japanese firms considering a UK exit

With the confirmation of Boris Johnson as prime minister, Britain looks more likely than ever to exit the European Union without a deal by October 31

Such an outcome is what Japanese companies based in the country have long feared – but few have actively prepared for it

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Boris Johnson knocks over a Japanese child during an exhibition rugby tournament in Tokyo. Japan has not been bowled over by Britain’s decision to exit the European Union – an idea championed by the new British prime minister. Photo: AP

Published: 3:45pm, 3 Aug 2019Updated: 8:10pm, 3 Aug 2019

Ever since the referendum in 2016 that decided Britain should leave the European Union, senior Japanese officials have been uncharacteristically vocal in raising concerns about the country crashing out of the bloc without a deal.

A so-called no-deal Brexit would probably mean that Britain has to trade on World Trade Organisation terms, and UK-based firms, including Japanese ones, will have to pay new and expensive tariffs on imports from the EU and goods sold to the rest of the bloc. Carmakers would be especially hard hit.

Their jitters have only heightened since July 24 when former British foreign secretary Boris Johnson became prime minister. Within hours of Johnson’s victory, Japanese Prime Minister Shinzo Abe yet again urged Britain not to leave the EU without a deal or to jeopardise the interests of Japanese firms that had invested heavily in the UK since the 1980s.

For weeks, Johnson had promised to leave the EU by October 31 “come what may” – including without a deal.

Fraser Cameron, director of the EU-Asia Centre, a Brussels-based think tank, said: “The Japanese have been remarkably outspoken in criticising Brexit [and about Britain] leaving the EU’s single market and customs union, and are vehemently against a no-deal Brexit.”

In a BBC interview in June, Japan’s Foreign Minister Taro Kono noted there were currently around 1,000 Japanese companies operating in Britain, making up about one-sixth of all Japanese firms with operations in the EU.

Fear of no-deal Brexit leaves Japanese firms considering a UK exit

With the confirmation of Boris Johnson as prime minister, Britain looks more likely than ever to exit the European Union without a deal by October 31 Such an outcome is what Japanese companies based in the country have long feared – but few have actively prepared for it

With the confirmation of Boris Johnson as prime minister, Britain looks more likely than ever to exit the European Union without a deal by October 31

Such an outcome is what Japanese companies based in the country have long feared – but few have actively prepared for it