The Japanese ambassador has warned that more Japanese firms may choose to relocate away from the United Kingdom in the coming months if the United Kingdom does not seal a promising post-Brexit deal with the European Union.
In an exclusive interview with Sky News, Koji Tsuruoka said that Japanese firms had been cutting back on its investment in the United Kingdom amid the uncertainty with the Brexit negotiations.
He added, however, that it would not take a long time to negotiate a post-Brexit trade deal between Japan and the United Kingdom.
The comments of Tsuruoka come weeks after it was revealed that both Honda and Nissan would be cutting back its production in the United Kingdom. In Honda’s case, it will be shutting down its Swindon factory altogether.
Even though both of the firms emphasised that neither decision was because of Brexit, Tsuruoka said that many of the 1,000 or so UK-based firms of Japan were now considering how to adjust to the post-Brexit life.
Tsuruoka stated: “These are all global companies and therefore they have other possibilities other than staying.”
He added: “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.”
He continued: “Most of these companies would like to expand their capacity. But they need to know about the UK-EU economic relationship.”
Tsuruoka noted: “Many of those possible potential investments are being put on hold right now because they can’t really convince investors that these are the right investments today.”
He concluded: “That’s why the uncertainty of not having some kind of informed future perspective makes it very difficult for new investment.”
When asked whether the people in Japan were worried about the state of the negotiations over Brexit, Tsuruoka stated: “Worried is not the right term; the right term is perplexed.”
Tsuruoka became ambassador a few weeks before the Brexit vote. He added: “They 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.”
One of the reasons that many have cited for Japanese car firms moving their production away from the United Kingdom is that Japan currently benefits from the lower tariffs on exports to the European Union through the EU-Japan trade deal.
Tsuruoka previously worked on the negotiation of the Trans-Pacific Partnership, a complex trade deal between the nations on the Pacific Rim. He said that he was optimistic that a trade deal could be agreed between Japan and the United Kingdom which would not take long to negotiate.
He added that the United Kingdom was welcome to join CTTPP, the pacific trade pact, as it is now called, however, he said that a bilateral trade deal with Japan would possibly be agreed sooner.