No-deal Brexit could end Japan investment boom, envoy tells UK PM rivals

[rooster59]

No-deal Brexit could end Japan investment boom, envoy tells UK PM rivals

By Costas Pitas and Minwoo Park

 

FILE PHOTO: Japanese Foreign Minister Taro Kono attends a meeting with his Russian counterpart Sergei Lavrov in Moscow, Russia May 10, 2019. REUTERS/Evgenia Novozhenina/File Photo

 

LONDON/TOKYO (Reuters) - Japan on Thursday cautioned the two candidates vying to replace Prime Minister Theresa May that a no-deal Brexit would be so disruptive for many companies that Japanese capital's 35-year bet on Britain could end.

 

In an appeal to both Boris Johnson and Jeremy Hunt, Foreign Minister Taro Kono said Tokyo did not want a no-deal Brexit, that some companies were already moving out and that more investment could go.

 

"I know Boris and I know Jeremy, both of them pretty well," Kono told Reuters in Osaka where a G20 summit begins on Friday.

 

"I have communicated with them that Japan wouldn’t want no-deal Brexit. So hopefully Brexit could be done through an ordinary and calm way."

 

Japan has long seen Britain as a pro-business, liberal gateway into the rest of the European Union and has around 1,000 companies based in the country, including major carmakers and technology firms. Japanese firms have invested over 60 billion pounds in Britain.

 

But following the 2016 vote to leave the European Union, some Japanese firms have begun moving business out of Britain, with particular concern over the impact of a possibly disorderly exit on Oct. 31.

 

"Please, no no-deal Brexit," Kono told the BBC. "Some companies are already starting to move their operations to other places in Europe."

 

Asked whether investment could leave Britain, Kono said: "It could be that there is going to be less investment."

 

PROROGUING PARLIAMENT ON THE TABLE

 

Both Johnson and Hunt have both said they would be prepared to take Britain out of the bloc without a deal, although it was not their preferred option.

 

No-deal means there would be no transition period so the exit would be abrupt, the nightmare scenario for many businesses and the dream of hard Brexiteers who want a decisive split.

 

Some pro-EU British lawmakers have said they will seek next week to block a new prime minister from taking Britain out of the bloc without a deal and against the will of parliament by trying to cut off some of the government's funding.

 

Johnson has been bullish, vowing that Britain would definitely leave the EU on Oct. 31, deal or no deal, although he has also said that he chances of leaving without an agreement "a million-to-one".

 

At a hustings with some of the Conservative Party members who will ultimately elect the replacement for May, Johnson again said he could not rule out proroguing, or suspending, parliament until the Brexit deadline to prevent lawmakers blocking a no-deal divorce.

 

"The way to get that deal of course is to make sure we prepare for no deal," he said, ridiculing concerns that a no-deal Brexit would hit aviation and food supplies.

 

"The planes will fly, there will be drinking water whatever happens on Nov. 1 in this country, and believe me there will be milk solids and glucose and whey for our Mars bars. Where there's a will, there's a way," he added.

 

PEUGEOT DECISION

 

However, car makers do not share the same optimism. French carmaker Peugeot <PEUP.PA> also said on Thursday that plans to build the next generation Astra vehicle at its Ellesmere Port car plant, which would keep the site open, will depend on the terms of Brexit.

 

"The decision on the allocation to the Ellesmere Port plant will be conditional on the final terms of the UK’s exit from the European Union and the acceptance of the New Vehicle Agreement, which has been negotiated with the Unite trade union," it said.

 

The factory built around 5% of Britain's 1.5 million cars last year. The Astra will also be made at Peugeot's Russelsheim plant in Germany.

 

Automakers have been particularly vociferous in their opposition to a no-deal Brexit due to fears over tariffs of up to 10% on vehicles, customs delays and new bureaucracy which could cripple just-in-time production practices.

 

Margaret Thatcher's Conservative government had attracted Japanese carmakers to Britain in the 1980s to rebuild an ailing domestic industry with promises of access to the European single market.

 

Last year Nissan Motor Co Ltd <7201.T>, Toyota Motor Corp <7203.T> and Honda Motor Co Ltd <7267.T> made roughly half of Britain's 1.5 million cars, employing tens of thousands of people both directly and through the supply chain.

 

Brexiteers have long argued that the EU's biggest economy Germany, which exports hundreds of thousands of cars to Britain ever year, would not impose restrictions in order to protect that trade.

 

Some Brexit supporters say there would be short-term disruption but in the long term the UK would thrive if cut free from what they cast as a doomed experiment in German-dominated unity that has led to Europe falling behind China and the United States.

 

But Honda announced earlier this year that it will close its British plant whilst Nissan cancelled plans to build a new sports utility vehicle at its Sunderland factory in the north of England. Both blamed factors other than Brexit.

 

"If there's a no-deal Brexit and if they have to go through actual custom inspections physically, those operations may not be able to continue," Kono said.

 

(Additional reporting by Michael Holden and Sudip Kar-Gupta in Paris; Writing by Guy Faulconbridge and Costas Pitas; Editing by Jon Boyle and Lisa Shumaker)

 

-- © Copyright Reuters 2019-06-28

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[Chomper Higgot]

That Japanese chap is biased, he’s only thinking about the interests of Japanese businesses and where they choose to invest.

 

He’s a ‘Project Fear’ monger, ignore him.

[fishtank]

Yet more evidence of the disaster a no deal brexit would be.

Sadly the extremists care more about their own careers than the UK.

Edited June 28, 2019 by fishtank

[Basil B]

It is not only the Japanese...

Quote

Vauxhall Astra: Ellesmere Port manufacture 'depends on Brexit'

https://www.bbc.co.uk/news/uk-england-merseyside-48790657

 

[wombat]

leave first deal later, there is a whole world out there waiting to deal

[Chomper Higgot]

27 minutes ago, wombat said:

leave first deal later, there is a whole world out there waiting to deal

 

You need to pay attention the Japanese 'Project Fear' monger, he might give an insight into the kind of deal you can expect. 

 

Bird in the hand worth two in the bush and all that. 

[tomacht8]

......, although he has also said that he chances of leaving without an agreement "a million-to-one".

 

How serious is such a statement?

His statement was not based on any serious analysis or is the result of negotiations with the EU.

 

It's just hot air.

Cheap propaganda.

A statement without factual foundations.

 

The UK should not expect that companies based on these fairy castles to make long-term investment decisions pro UK.

 

The same is his statement on the technology of the NI border.

Nothing realistic, nothing concrete, no comprehensible plan.

Only bla bla.

 

And that should become the new PM of the UK?

My deepest condolences.

[robertson468]

Warning:  Japan is also trying to strike up a deal with the EU, so I would be inclined to say that they are somewhat biased.

[tebee]

33 minutes ago, robertson468 said:

Warning:  Japan is also trying to strike up a deal with the EU, so I would be inclined to say that they are somewhat biased.

Japan already has struck up a deal with the EU - they have no need now to curry favour. 

[Laughing Gravy]

More could, maybe, possibly, might be crap from the EU loving Reuters. 3 years of this constant barrage. Luckily most people have got bored of it and see it as fake news. Sadly a few still froth at the mouth in hope the majority will be gullible and believe this nonsense.

We are all still quaking from George Osbourne's Armageddon what would happen after the referendum result and his punishment budget.  

 

The story of the the boy who cried wolf is a bible story now. The same will happen with the stories spread about brexit. Most sensible people class them as fairy tales.

 

[Chomper Higgot]

10 minutes ago, Laughing Gravy said:

More could, maybe, possibly, might be crap from the EU loving Reuters. 3 years of this constant barrage. Luckily most people have got bored of it and see it as fake news. Sadly a few still froth at the mouth in hope the majority will be gullible and believe this nonsense.

We are all still quaking from George Osbourne's Armageddon what would happen after the referendum result and his punishment budget.  

 

The story of the the boy who cried wolf is a bible story now. The same will happen with the stories spread about brexit. Most sensible people class them as fairy tales.

 

I'm not at all sure on what basis you claim  most people have got bored of warnings from major trading partners on the impact of a no-deal Brexit on their investments in the UK?

 

I suspect most people listen and think what that might mean to their future and the future of their family. 

 

I am sure however that Brexit zealots who are now backing the no-deal that was only ever meant as a threat are amongst those who might  not want to listen to the representatives of major international trading partners. 

[Laughing Gravy]

3 hours ago, fishtank said:

Yet more evidence of the disaster a no deal brexit would be.

Sadly the extremists care more about their own careers than the UK.

I was trying to take you seriously but your avatar prevents me. Obviously the new United States of Europe supporter. Whichever country you are from, I really pity you.

 

As for extremists the Germans in the 1930s like today also wanted a united Europe, they just went about it in a different way, but same objective. Sadly many didn't realise until is war far too late. Looked what happened there.

[JonnyF]

Reminds me of when Obama said we'd be at the back of the queue ????. 

[Chomper Higgot]

3 minutes ago, JonnyF said:

Reminds me of when Obama said we'd be at the back of the queue ????. 

Well you will be.

 

Unless you bring he deeds to the NHS with you.

[Chomper Higgot]

17 minutes ago, Laughing Gravy said:

I was trying to take you seriously but your avatar prevents me. Obviously the new United States of Europe supporter. Whichever country you are from, I really pity you.

 

As for extremists the Germans in the 1930s like today also wanted a united Europe, they just went about it in a different way, but same objective. Sadly many didn't realise until is war far too late. Looked what happened there.

Yep, rightwing populists funded by a small group of hyper wealthy took power with promises of looking after the working-class, picked out a religious minatory and foreigners as scapegoats, called those who did not agree with them traitors and enemies. 

 

It all went swimmingly. 

[Thongkorn]

Bring it on Britain decides its fate not a foreign Country.

[welovesundaysatspace]

Good! Let the riff-raff find out the hard way. 

[mfd101]

Certainly it's going to be fascinating to watch British management & production skills at their very best with their new just-out-of-time manufacturing & supply chains.

[elliss]

5 hours ago, JonnyF said:

Reminds me of when Obama said we'd be at the back of the queue ????. 

 

 uk , soon will be , over and out ..