Japan has issued a stark warning to the Government over the risks Brexit poses to the county’s businesses operating in the UK.

Speaking after a Downing Street summit with 19 leaders from Japan’s biggest businesses with operations in the UK, the country’s ambassador raised the prospect of them pulling out of Britain.

"If there is no profitability of continuing operations in the UK - not Japanese only - then no private company can continue operations. It is as simple as that," Ambassador Koji Tsuruoka said when asked whether Japanese companies could leave if no trade deal is agreed.

"This is all high stakes that all of us, I think, need to keep in mind," the ambassador said, speaking outside No...</s>LONDON (Reuters) - Japan’s ambassador said on Thursday that no firm would be able to continue to operate in Britain if they are not profitable due to Brexit-related trade barriers.

Speaking outside Number 10 Downing Street after meeting Prime Minister Theresa May along with 19 Japanese business leaders, the ambassador had a clear message for Britain.

“If there is no profitability of continuing operations in the UK - not Japanese only - then no private company can continue operations. So it is as simple as that,” Koji Tsuruoka said when asked how real the threat was to Japanese companies of Britain not securing frictionless trade.

“This is all high stakes that all of us, I think, need to keep in mind,” he said.

May met the bosses of companies in areas such as banking, life sciences, technology and the manufacturing sector which have poured billions of pounds into Britain but are worried about future trading arrangements.</s>Japan's ambassador has warned the Prime Minister of the "high stakes" of Brexit following talks in Downing Street.

Koji Tsuruoka, speaking outside Number 10, claimed international companies could close their operations in Britain if there is "no profitability" in staying.

He delivered a warning to the Government as Cabinet ministers continue to debate the form of Britain's post-Brexit relationship with the EU.

After talks between Government ministers and Japanese business leaders, the ambassador said: "If there is no profitability of continuing operation in the UK - not Japanese only - no private company can continue operation.

"So, it's as simple as that. This is all high stakes that I think all of us need to keep in mind."

Campaigners said Mr Tsuruoka's comments revealed how thousands of UK jobs could be put at risk due to Brexit.

Earlier this week, under pressure from Tory Brexiteers, Downing Street ruled out UK membership of a customs union with the EU after Brexit, in order to preserve an ability to sign independent trade deals with non-EU countries.

Mr Tsuruoka said he would not answer "hypothetical" questions about future UK customs relations with the EU, but said it is "expected that manufacturing business in particular will continue to have the free access to the European market".

He highlighted how past British governments had encouraged Japanese investment by painting the UK as the "gateway to Europe".

However, the ambassador stressed Japan had also been making representations to Brussels "to make the point that the continuation of healthy, sound trade relations between the UK and EU is benefiting not just the UK but also the EU and enhances the global economy as a whole".

"Japan is playing a major role on both sides as a major investor," he said.

Mr Tsuruoka said Japanese companies would like to continue their "successful" operations in the UK, but added they were "watching very closely" and wanted to "see clarity and certainty".

Thursday's talks between Government and Japanese business leaders was attended by Theresa May, Chancellor Philip Hammond, Business Secretary Greg Clark and International Trade Secretary Liam Fox.

Alongside Mr Tsuruoka, bosses from Hitachi, Mitsubishi, Honda, Toyota and Nissan were among the Japanese delegation.

Downing Street said the Prime Minister had used the talks to "set out her vision for an outward-looking, global Britain", while also presenting the Government's industrial strategy, published late last year.

Japanese business leaders "spoke of their desire to continue trading with and investing in the UK", according to a spokesperson.

"Business representatives expressed their appreciation for the opportunity for constructive dialogue with the Government, and agreed on the importance of the time-limited implementation period in providing clarity and certainty for people and businesses," they added.

"There was also agreement on the importance of moving quickly in the negotiations to secure a trading relationship with the EU that is as tariff-free and frictionless as possible following the implementation period."

Responding to the ambassador's comments, Labour MP Phil Wilson, a supporter of the pro-EU Open Britain campaign, said: "If the Government doesn't get its act together soon, we could be saying 'Sayonara' to Japanese businesses based in the UK.

"Japanese companies have invested in this country, supporting more than 160,000 jobs, largely on the basis that it provides a bridge into a the wider European market.

"If that bridge collapses, their investment will dry up."</s>LONDON (Reuters) - Japan warned Prime Minister Theresa May on Thursday that its companies would have to leave Britain if trade barriers after Brexit made them unprofitable.

Japanese firms have spent more than 40 billion pounds ($56 billion) in Britain, encouraged by successive governments since Margaret Thatcher promising them a business-friendly base from which to trade across the continent.

But after May and several of her top ministers met bosses from 19 Japanese businesses, including Nissan, SoftBank and bank Nomura, Japan’s ambassador to Britain issued an unusually blunt warning on the risks of trade barriers.

“If there is no profitability of continuing operations in the UK - not Japanese only - then no private company can continue operations,” Koji Tsuruoka told reporters on Downing Street when asked how real the threat was to Japanese companies of Britain not securing frictionless EU trade.

“So it is as simple as that,” he said. “This is all high stakes that all of us, I think, need to keep in mind.”

Japan, the world’s third largest economy, has expressed unusually strong public concerns about the impact of Brexit on the United Kingdom, the second-most important destination for Japanese investment after the United States.

In a warning after the shock 2016 Brexit vote, Japan expressed fears about a cliff edge that could disrupt trade when Britain formally leaves the bloc in March 2019.

Major corporations have sought a two-year transition period, which they hope will ease Britain into its new relationship with the bloc.

Both London and Brussels hope to agree a transition deal lasting until the end of 2020, in which Britain would remain in the single market and be bound by all EU laws, by a March 22-23 summit.

May and her ministers assured Japanese businesses of the importance of maintaining free and frictionless trade after Brexit during the meeting but said nothing firm on the matter, a source familiar with the discussions told Reuters.

“The point about frictionless trade and tariff-free trade was made in the meeting and acknowledged by the government and all sides as being important but nothing firm,” said the source, who spoke on condition of anonymity.

A spokesman at May’s office said she had agreed with them on the need to move on quickly in the Brexit talks to secure a trading relationship with the EU that is as tariff-free and frictionless as possible after the transition period.

Thursday’s meeting came after a Brexit sub-committee of ministers discussed their Brexit strategy including how closely Britain should remain aligned with the EU and its customs union, a divisive issue for the ruling Conservatives.

Brexit minister David Davis said there was still progress to be made in the committee, after disagreements between ministers erupted into the public domain.

Hitachi Europe’s Deputy Chairman Stephen Gomersall, Mitsubishi CEO for Europe and Africa Haruki Hayashi, SoftBank Investment Advisers UK CEO Rajeev Misra and Nomura’s Executive Chairman in Europe, the Middle East and Africa Yasuo Kashiwagi joined the meeting with Japanese investors.

Nissan’s Europe Chairman Paul Willcox, Honda’s Senior Vice President in Europe Ian Howells and Toyota’s Europe President and Chief Executive Johan van Zyl were also present.

Collectively the three carmakers build nearly half of Britain’s 1.67 million cars.</s>LONDON (AP) - Japan's ambassador to Britain said Thursday that Japanese businesses in the U.K. expect continued access to the European Union market after Brexit.

Koji Tsuruoka said Japanese firms "have a high stake" in the outcome of divorce negotiations between Britain and the EU.

Speaking after a meeting with Prime Minister Theresa May and Japanese business leaders at 10 Downing St., Tsuruoka said Japanese firms based in Britain counted on access to the EU market. He said "the question is whether the arrangements that will be reached between the two sides will allow the Japanese companies, who are willing and in some ways determined to continue to operate in the U.K., to allow them to make that happen."

He said Japanese companies were "watching very closely" the progress of Brexit negotiations.

Japanese government figures say some 879 Japanese companies employ 142,000 staff in Britain.

May and Treasury chief Philip Hammond met the ambassador and executives of major Japanese firms including Toyota, Mitsubishi, Panasonic and Nissan, whose car plant in Sunderland, England, employs 7,000 people.

Thursday's talks came amid growing anxiety among business leaders about the shape of Britain's upcoming departure from the EU because of uncertainty on what trade relations will look like.

Even as the March 2019 exit draws closer, the U.K. government remains divided over how close a relationship it wants to keep with the EU. May's Cabinet is divided between those who want to remain close to the EU's single market and customs union and those who want a clean break so Britain can strike new trade deals around the world.

After the meeting, May's office said Britain wanted to become "an even more attractive destination" for Japanese investment.

Downing St. said that after Brexit, "the U.K. and Japan will work quickly to establish a new economic partnership" based on a free-trade deal the bloc is finalizing with Japan.</s>There is no question what Japan thinks about Britain leaving the European Union.

Ever since the UK voted for Brexit in June 2016, Japan has spoken out about the nation leaving the EU single market, which would create costly problems for companies operating within Britain. And because of Japan’s intertwined ties with Britain’s economy, it is fast trying to position itself as a key influence over what the final Brexit deal will look like.

Yesterday (Feb. 8), Japan’s ambassador to the UK, Koji Tsuruoka, told reporters following a meeting between prime minister Theresa May and 19 top Japanese bosses that “if there is no profitability of continuing operations in the UK—not Japanese only—no private company can continue operations. So it is as simple as that.” It was the latest in a line of very blunt assessments about Brexit and what effect it would have on foreign companies operating in the UK.

In 2016, Japan’s foreign ministry released a 15-page document addressing the potential damage to Britain’s economy if the UK leaves the single market—something the UK government has repeatedly said it will do. It warned that businesses and banks are likely to relocate operations because Britain leaving the single market makes Japanese businesses “face difficulties.”

This is something that is already starting to happen (paywall). Japan’s biggest bank, Mitsubishi UFJ, is looking to relocate its UK investment-banking operations (paywall) from London to Amsterdam. Frankfurt has also been floated as an alternative to London for other Japanese financial firms such as Nomura, Daiwa, and Sumitomo Mitsui. Meanwhile, car maker Nissan warned in 2016 that it may have to relocate jobs from its plant in the north of England, until the UK government gave assurances that the country would “remain competitive” post-Brexit.

Japan is being incredibly vocal over what it thinks about Brexit because of the close trade relationship it has with the UK. Currently, the UK imports around $13.7 billion in goods a year from Japan, making it Britain’s 10th-largest trading partner. The 1,000 Japanese companies that operate in the UK also employ some 140,000 people.

Prime minister May and her cabinet have repeatedly said that Britain doesn’t need to stay in the single market because it is able to forge trade deals across the world. She reiterated this point after her meeting with the Japanese ambassador, saying she recognizes that Brexit is “no small undertaking, but importantly it does present the opportunity to strike free-trade deals around the world and build on our already very strong relationship that we have with Japan.”

However, severing ties to the EU’s single market means relinquishing unified import and export rules and costs. One recent report showed that if the UK government decided to pursue the “hard Brexit” route, it would increase prices for UK exports, which could make EU consumers switch to domestically produced goods instead. This in turn would lead to a £17 billion ($22.7 billion) fall in annual EU export revenues across key UK manufacturing sectors.</s>Major Japanese investors in Britain, including the three big carmakers, are due to meet the prime minister and chancellor on Thursday.

A meeting is understood to have first been raised when Theresa May visited Japan last year.

But it comes amid fresh debate among business over Brexit negotiations.

Carmakers Nissan, Toyota and Honda were due to attend the talks, along with representatives from banks and drug companies.

"The meeting will be tomorrow afternoon and the attendees will cover the most significant investors in the UK in such areas as banking, life sciences, technology and the manufacturing sector," a Downing Street spokesman said.

Japanese firms have spent billions of pounds in Britain over the past decades, encouraged to set up in the country by successive governments promising a business-friendly base from which to trade across the continent.
• Pressure on May to choose over Brexit

Nissan, Toyota and Honda began their UK operations in Britain in the 1980s and now build nearly half of all of Britain's 1.67 million cars. The big majority of these are exported.

The motor industry has expressed concern that their exports could face tariffs of up to 10% and be subject to customs delays after Britain leaves the European Union.

"Nissan Europe Chairman Paul Willcox will join representatives from other Japanese companies in meeting the prime minister and chancellor on Thursday to discuss our operations and investments in the UK," the firm said in a statement. "We will not be disclosing details of the discussions."

Japanese drug companies have also made Britain their European base. Some are concerned about future drug regulations, with any divergence with the EU likely to pose regulatory challenges.

London is also home to Japanese banks, such as Nomura, Daiwa Securities and Sumitomo Mitsui Financial. Like other foreign banks, they are keen to know about trading and so-called "passporting" arrangements for access to the EU.

In 2016 Nissan chief executive Carlos Ghosn met prime minister Theresa May amid fears over the future of its production plant in Sunderland.

Nissan sought assurances over post-Brexit arrangements ahead of future investment in the Sunderland plant, Britain's biggest car factory.</s>The future of a number of some of the North East’s largest employers has been called into question after Japan’s top ambassador said unprofitable firms may not stay after Brexit .

Japanese companies such as Nissan , Hitachi and Komatsu employ thousands of people across the North East, but Japanese ambassador Koji Tsuruoka warned that a bad trade deal with the EU could force many of these companies to leave the country.

His comments were made outside Downing Street after Mr Tsuruoka met with Prime Minister Theresa May and 19 heads of Japanese companies.

During the meeting Mrs May reiterated her promise that Brexit would allow the UK to strike a free trade deal with Japan.

But afterwards during a press conference the ambassador warned that if Japanese firms become unprofitable due to bad Brexit deals they will leave the UK.

Mr Tsuruoka said: “If there is no profitability of continuing operations in the UK, not Japanese only, no private company can continue operations. So, it is as simple as that.

“This is all high stakes and all of us need to keep in mind.”

He added: “Our Prime Minister has requested that the Japanese companies be fully consulted and listened to while the UK prepares to engage with the EU on relations of the future of the economic ties between the two.”

The view that many Japanese businesses could shut up shop is worrying news for the North East, which is home to a large number of Japanese firms.

As well as major manufacturers such as Nissan, Hitachi, and Komatsu, there are also a number of Japanese owned firms working in the automotive supply chain. These include Sunderland’s Sanoh Industrial Co, Calsonic Kansei, Stockton’s Nifco, Unipres, and NSK Bearings.

Mr Tsuruoka did not go as far as to say that Brexit negotiations were a “threat” to Japanese businesses operating in the UK, but he used the opportunity to call for more clarity to be given to the business community as the talks progressed.

“Uncertainty is a very important source of concern, as if you don’t know what will happen in the near future of course you will very reluctant to make any decision,” he said. “There is an importance of having clarity in the short term, as well as the longer term, and we have been told that the implementation period or transition period will be discussed and the prospect of agreeing with the EU is very positive. That is the first step that we will appreciate and welcome.”

The Japanese ambassador’s comments came just days after the Government released an impact report that predicted that the North East economy will be the worst hit by Brexit.

The forecast predicted that under a ‘no deal’ scenario growth in the region would be 16% lower than if the UK remained in the EU. Under a free trade arrangement growth would still fall by 11%, while remaining within the single market would lower the growth reduction to 3%.

Following the release of the report Ross Smith from the North East England Chamber of Commerce called for the Government to stop treating people like “idiots”, and asked politicians to reconsider leaving the Customs Union.</s>Another gathering in Downing Street has come and gone, imagined at one point to be a "crunch meeting" at which Cabinet colleagues might thrash out their differences on the destination of Brexit.

In fact, it was nothing of the kind. The only crunching to be seen or heard was the gentle crump of the metaphorical tin can labelled "Britain's future after Brexit" being kicked, unopened, further down the road.

Did we seriously expect anything else?

Boris Johnson, and Brexiteers like him, believe that Brexit opens up a world of new opportunities.

Former Remainers including Phillip Hammond, the chancellor, are believed to quietly fear it could usher in an era of national decline.

There is no reconciling these views.

So ministers on both sides, and colleagues in between, have chosen with lesser or greater enthusiasm to embrace the government's stated ambition to pursue the goal of "frictionless trade" with the EU, with few if any tariff or non-tariff barriers, while simultaneously shuffling off the obligations that go with membership of the EU customs union and single market.

No matter that the chancellor is suspected by many in Whitehall and at Westminster to fear this is unachievable, and to secretly nurse the dream of an eventual rethink, or perhaps the hope that a Brexit transition might somehow go on and on.

Never mind that some senior Brexiteers are known to be quietly enthusiastic about the possibility of Brexit negotiations ending with no-deal with the EU, and with Britain trading in future on World Trade Organisation rules, until agreements can be struck with nations around the world.

For now, the goal of a future in which the UK both has its cake and eats it serves as the fulcrum upon which two opposing views can balance.

When Amber Rudd told Brexiteers via the BBC's Andrew Marr Show the cabinet was "more united than they think", this was surely what she meant.

Meanwhile, the paper published by HMRC officials last August set out practical means of managing cross-border trade, while leaving the tricky business of striking a trade deal with the EU, or failing to do so, to their political masters.

The practical talk in cabinet, I'm told by one senior minister, encompassed the UK's future relationship with the EU on the point of alignment of trading rules and regulations.

There's broad agreement among ministers that Britain should set its own rules and standards, and not automatically accept diktats from Brussels.

Yet it is also recognised that trade with Europe requires compliance with the standards enshrined in those same rules.

The distinction may seem rather Jesuitical to some.

But to Brexit enthusiasts, and to 10 Downing Street, it is a matter of sovereignty and goes to the heart of Brexit as an idea.

British and EU trading standards are perfectly aligned now, it's argued, and there's no intention on the British side to lower those standards, still less to go down the route to what Brussels calls "social dumping" and reduce workers' rights.

Arguments over any divergence in regulations could go to some form of arbitration.

"The Treasury just wants to stay in or close to a customs union," said a minister, "but they won't win that one".

And what about the European Commission?

"They just want to stay in control."

So, the moment of decision awaits further down the road.

Brexiteer ministers insist talk in Brussels that the UK cannot cherry pick, cannot enjoy free access to markets without accepting free movement of people and the jurisdiction of the European Court is merely a negotiating position.

"It's the starting position, not the end. Michel Barnier (the EU's chief negotiator) does not speak for the entire European Union...can you imagine the Netherlands wanting to put up barriers?"

Theresa May told MPs at Prime Minister's Questions: "As I have said right from the very beginning, we will hear noises off and all sorts of things being said about positions, but what matters is the position that we take in the negotiations as we sit down to negotiate the best deal.

"We have shown that we can do that; we did it December and we will do it again."

In other words, "trust me".

But the pressure on Mrs May to mark out her own preferred destination keeps mounting - especially from Brexiteers who'd like her to tell Brussels to accept Britain's terms or live with no deal at all.

The moment she does so the Cold War in her party between rival ministers and rival factions would likely warm up very quickly.

There is also a more urgent problem: securing a Brexit transition at the European Council on 22 March.

Without an agreement, Britain will suddenly be (forgive the mixed metaphor) looking down the barrel of a Brexit cliff-edge.

Fears among business leaders would reach a new pitch, threatening investment and jobs. And the government would need to prepare itself, and warn the businesses it has been trying to reassure that a hard Brexit was at least a real possibility.

Obstacles to a transition deal have not yet been resolved.

They include the rights of EU migrants who arrive in Britain after the transition. There is still no clear or detailed answer to the problem of the border on the island of Ireland.

Downing Street says trading regimes will remain aligned. Dublin is widely believed to want to push the UK to maintain a customs union. Any new, or old obstacle, could appear, or reappear. Who knows? Gibraltar?

Ultimately, the mythical tin can marked "Britain's future after Brexit" must come home to roost (to mix another metaphor).

In the Autumn, clear positions will be required on both the UK and EU side if there is to be a document - at the very least setting out "heads of agreement" on the future relationship.

At that point Parliament will have its say.

A "meaningful vote" is promised. On its outcome rests Brexit, Tory unity, Theresa May's future and conceivably that of the government.

A cabinet minister observed recently that the prime minister seemed to be privately philosophical about the state of her premiership and her government: "She said 'it goes with the territory'"

Perhaps, in another life, Mrs May commanded a bomb disposal unit.</s>Nissan has confirmed it is holding talks with the Prime Minister and Chancellor today.

The car giant, which employs almost 6,700 workers at its Sunderland plant and supports many more jobs in the North East supply chain, is among the major Japanese investors in Britain meeting Theresa May and Philip Hammond today.

A meeting is understood to have first been raised when Theresa May was visiting Japan last year, but it comes at a time of much debate among businesses over the Brexit negotiations.

An impact report was released yesterday stating that a "hard Brexit" would be a big blow to the North East economy.

The Big Three Japanese car manufacturers Nissan, Toyota and Honda are due to attend the talks, along with representatives from banks and drug companies.

In a statement, Nissan said: "Nissan Europe Chairman Paul Willcox will join representatives from other Japanese companies in meeting the prime minister and chancellor on Thursday to discuss our operations and investments in the UK.

"We will not be disclosing details of the discussions."

A Downing Street spokesman said: “The meeting will be tomorrow afternoon and the attendees will cover the most significant investors in the UK in such areas as banking, life sciences, technology and the manufacturing sector."

Nissan bosses previously vowed to work with the Government to secure the long-term future of the firm’s Sunderland plant after Brexit.

There was also relief and joy in October 2016, just a few months after the Brexit vote, when Nissan announced it would build two new models - the Qashqai and X-Trail - in Sunderland.

 

 But with 70% of the cars built in Sunderland being exported to Europe (including Russia). trade deals with the continent are obviously a concern for the manufacturer - and many fear a "botched Brexit" will see the firm scaling down its operations in Wearside.



 Japanese firms as a whole have spent billions of pounds in the UK in recent decades, with governments encouraging companies from the Asian economic powerhouse with the promise of it being a business-friendly base from which to trade across Europe.

Nissan, Toyota and Honda all began their UK operations in Britain in the 1980s and now build nearly half of all of Britain's 1.67 million cars - the majority of which are exported.

Motor industry leaders have voiced fears over potential export tariffs of up to 10% and customs delays after Britain leaves the European Union.
After a meeting with top Japanese business and British government executives in 10 Downing Street, Japan's ambassador to Britain warns that companies may discontinue their UK operations if a Brexit without a new trade deal makes them unprofitable.