No-deal Brexit would force Japanese investors to reassess 40-year bet on UK

[rooster59]

No-deal Brexit would force Japanese investors to reassess 40-year bet on UK

By Guy Faulconbridge and Costas Pitas

 

Koji Tsuruoka, Japan's ambassador to the UK speaks during an interview at the embassy in London, Britain September 20, 2019. REUTERS/Simon Dawson

 

LONDON (Reuters) - Japanese companies and investors would be forced to reassess their four-decade bet on the United Kingdom if there is a disorderly exit from the European Union that shattered supply chains and cut off access to the bloc, Japan's ambassador said.

 

Japan, the world's third-largest economy, made the United Kingdom its favoured European destination for investment. The likes of Nissan <7201.T>, Toyota <7203.T> and Honda <7267.T> were encouraged by former Prime Minister Margaret Thatcher to use the country as a launchpad into Europe.

 

Brexit, though, worries Japanese investors. Many have expressed concern in private that a disorderly exit could turn upside down the entire business case for investing in British manufacturing.

 

Japan is one of the biggest sources of foreign direct investment in Britain, which its companies have long seen as a pro-business, liberal gateway into the rest of the EU.

 

"If those conditions drastically change and make it impossible for companies to adapt, they will have to consider very carefully how they will go about continuing business here in the UK," Japan's ambassador to London, Koji Tsuruoka, told Reuters.

 

"They like it here and they are happy being here," Tsuruoka said. "The only hope that they are now wishing is that they will be allowed to continue to do good business here in the UK."

 

Japanese companies have invested over 81 billion pounds in Britain, making its FDI the fifth-largest after the United States, Germany, France and the Netherlands, according to UK statistics.

 

More than three years of political squabbling over Brexit have left allies and investors puzzled by a country that for decades seemed a confident pillar of Western economic and political stability.

 

It is still unclear on what terms the United Kingdom will leave the European Union. Options range from a last-minute exit deal or delay to an acrimonious split that would knot up the networks of trade.

 

"NOT TOO MANY ANSWERS"

 

Prime Minister Boris Johnson has repeatedly said he wants to strike a deal at an Oct. 17-18 EU summit, but if the EU turns down British demands he will lead the United Kingdom out without a deal on Oct. 31.

 

Without a deal, Britain would quit the EU's 500 million-strong single market and customs union overnight, falling back on World Trade Organisation rules, which could mean many import and export tariffs. There would be no transition.

 

Tsuruoka said he was hoping for an orderly exit. Nearly 1,000 Japanese companies based in Britain employ more than 150,000 people.

 

"The UK has provided Japanese companies and investors with very important business opportunities, which they have profited from now for three or four decades," Tsuruoka said.

 

"The question really is whether this will drastically changed or will there be a continuity of the sound business environments they have enjoyed," he said. "There are not too many answers that are available today and therefore they are watching very carefully."

 

Car makers, the country's biggest exporter of goods, has been one of the most vocal opponents of a no-deal Brexit, warning that production would be hit with tariffs, border delays and new bureaucracy, ruining the viability of many plants.

 

Of the just over 1.5 million cars produced in Britain last year, Japanese auto makers Nissan, Toyota and Honda built about half.

 

"The Japanese companies that are investing are global operators and they are watching it very carefully," Tsuruoka said.

"If none of the predictability is there, then you cannot plan, so you will have to stop and then consider when things are clear."

 

British trade minister Liz Truss is currently on a visit to Tokyo and has called for a new post-Brexit trade agreement with Japan as soon as possible.

 

"I am in Tokyo today to deliver one very clear message: the UK is ready to trade," Truss said. "The UK is an open, welcoming country and we are the perfect place to do business."

 

(Reporting by Guy Faulconbridge)

 

-- © Copyright Reuters 2019-09-21

Follow Thaivisa on LINE for breaking Thailand news and visa info

[Srikcir]

5 hours ago, rooster59 said:

we are the perfect place to do business."

Just no longer a "launch pad" into the EU.

More of crash landing site for Japanese autos?

[billd766]

quote "They like it here and they are happy being here," Tsuruoka said. "The only hope that they are now wishing is that they will be allowed to continue to do good business here in the UK."

 

Why would they NOT be allowed to carry on as before?

[Jaggg88]

"Japanese companies have invested over 81 billion pounds in Britain, making its FDI the fifth-largest after the United States, Germany, France and the Netherlands, according to UK statistics."

 

So the UK is already well down the pecking order. Honda have already left due to a change in the the car market as they are now concentrating on electric car production in Japan. Just project fear <deleted> from the ambassador. For the record Japanese companies employ just 0.42% of the British work force. 

[bristolboy]

4 hours ago, billd766 said:

quote "They like it here and they are happy being here," Tsuruoka said. "The only hope that they are now wishing is that they will be allowed to continue to do good business here in the UK."

 

Why would they NOT be allowed to carry on as before?

Because carrying on as before would mean seamless connections to the EU nations. Ya think Japan invested in the UK despite the fact that it was in the EU. or that it made no matter whether or not it was in the EU, or because it was in the EU?

[the guest]

Shame the UK sold off the car industry to others. Is there anything left in the country that is owned by the British?

[bristolboy]

15 minutes ago, the guest said:

Shame the UK sold off the car industry to others. Is there anything left in the country that is owned by the British?

Mostly the UK auto manufacturers were sold off because they were failing. So there wasn't a lot of choice involved. It's a pity that they weren't better run.

[donnacha]

Worth noting that the successful island nation of Japan would never consider ceding sovereignty to an undemocratic supra-national entity controlled by a major competitor.

I am surprised by how relentlessly the British media present every Brexit-related story as negatively as possible. I am not saying that there are not inevitably going to be problems with extracting yourself from such a tightly-woven system, but no news report ever seems to mention the downsides of staying in. The situation is less than ideal, but I don't see what other choice the British have if they want a say in their own future, and to operate in their own best interests.

 

 

[Scot123]

What a stupid thing to be said by an ambassador, 17.4 million people voted for a hard brexit ie a leave vote so in one moment of stupidity he has risked British people boycotting Japanese vehicles. I am looking to buy a new Rav 4 next year now I will seriously think of changing my purchase to a country that shuts its mouth and keeps out of British politics. Even yesterday I went to buy something saw it was made in France and because of Macron I decided not to buy it. 

[whitemouse]

42 minutes ago, donnacha said:

I am surprised by how relentlessly the British media present every Brexit-related story as negatively as possible. 

 

 

 

Is it possible that there isn't anything positive to report, at least so far.

Do you believe media is burying positive stories regarding BREXIT? What could these stories be, I wonder. The only pre and post BREXIT development that matter to UK  will be less foreigners in UK. What else is there? I doubt UK will have better trade deals with EU, once it is out of EU.

Less foreigners means less European foreigners, btw, since India, Pakistan are not part of EU. Refugee boats do not reach British Isles right now, so BREXIT makes no difference. Today Brussels can impose refugee quotas to UK, true, of course after BREXIT that is over, but refugee numbers are low, UK can't be reached the same way Austria, Italy, Sweden can be reached. 

[SheungWan]

What a stupid thing to be said by an ambassador, 17.4 million people voted for a hard brexit ie a leave vote so in one moment of stupidity he has risked British people boycotting Japanese vehicles. I am looking to buy a new Rav 4 next year now I will seriously think of changing my purchase to a country that shuts its mouth and keeps out of British politics. Even yesterday I went to buy something saw it was made in France and because of Macron I decided not to buy it. 

Nobody voted for Hard Brexit no-deal.

Sent from my SM-N935F using Thailand Forum - Thaivisa mobile app

[SheungWan]

Worth noting that the successful island nation of Japan would never consider ceding sovereignty to an undemocratic supra-national entity controlled by a major competitor.

I am surprised by how relentlessly the British media present every Brexit-related story as negatively as possible. I am not saying that there are not inevitably going to be problems with extracting yourself from such a tightly-woven system, but no news report ever seems to mention the downsides of staying in. The situation is less than ideal, but I don't see what other choice the British have if they want a say in their own future, and to operate in their own best interests.
 
 

Cheaper Anchor Butter probably.

Sent from my SM-N935F using Thailand Forum - Thaivisa mobile app

[SheungWan]

What a stupid thing to be said by an ambassador, 17.4 million people voted for a hard brexit ie a leave vote so in one moment of stupidity he has risked British people boycotting Japanese vehicles. I am looking to buy a new Rav 4 next year now I will seriously think of changing my purchase to a country that shuts its mouth and keeps out of British politics. Even yesterday I went to buy something saw it was made in France and because of Macron I decided not to buy it. 

Patriots might buy a second-hand Austin Princess. Bargain.

Sent from my SM-N935F using Thailand Forum - Thaivisa mobile app

[whitemouse]

52 minutes ago, Scot123 said:

 

 

 

I am looking to buy a new Rav 4 next year now I will seriously think of changing my purchase to a country that shuts its mouth and keeps out of British politics. Even yesterday I went to buy something saw it was made in France and because of Macron I decided not to buy it. 

 

It is probably not about politics, but economics, money. Large multinationals, based in UK, but aiming at EU market, no longer have a reason to be UK based.

[SheungWan]

What a stupid thing to be said by an ambassador, 17.4 million people voted for a hard brexit ie a leave vote so in one moment of stupidity he has risked British people boycotting Japanese vehicles. I am looking to buy a new Rav 4 next year now I will seriously think of changing my purchase to a country that shuts its mouth and keeps out of British politics. Even yesterday I went to buy something saw it was made in France and because of Macron I decided not to buy it. 

Should be good for Aston Martin sales. [emoji1782]

Sent from my SM-N935F using Thailand Forum - Thaivisa mobile app

[SheungWan]

"Japanese companies have invested over 81 billion pounds in Britain, making its FDI the fifth-largest after the United States, Germany, France and the Netherlands, according to UK statistics."
 
So the UK is already well down the pecking order. Honda have already left due to a change in the the car market as they are now concentrating on electric car production in Japan. Just project fear from the ambassador. For the record Japanese companies employ just 0.42% of the British work force. 

But concentrated in specific areas.

Sent from my SM-N935F using Thailand Forum - Thaivisa mobile app

[SheungWan]

Mostly the UK auto manufacturers were sold off because they were failing. So there wasn't a lot of choice involved. It's a pity that they weren't better run.

Going down the chute prior to entering the EU. Superior UK managers then obviously.

Sent from my SM-N935F using Thailand Forum - Thaivisa mobile app

[Bluespunk]

12 hours ago, rooster59 said:

Prime Minister Boris Johnson has repeatedly said he wants to strike a deal at an Oct. 17-18 EU summit, but if the EU turns down British demands he will lead the United Kingdom out without a deal on Oct. 31.

Parliament has already legislated that he cannot do this without their approval.

 

johnson and his minority no dealer chums in govt no longer control the legislative process surrounding brexit. 

[zorrow424]

3 hours ago, Bluespunk said:

Parliament has already legislated that he cannot do this without their approval.

 

johnson and his minority no dealer chums in govt no longer control the legislative process surrounding brexit. 

oh yes they do,and just see how they do it.  Not kept up with up coming events,no worries,definitely out  31 October,all in hand.

    just an advisory , the letter to quit the UK will have to be observed,and quickly I add,or will make any application for UK visa virtually impossible.

  The Japanese will flock back to UK under new manufacturing rules being introduced  lol

[Bluespunk]

3 hours ago, zorrow424 said:

oh yes they do,and just see how they do it.  Not kept up with up coming events,no worries,definitely out  31 October,all in hand.

    just an advisory , the letter to quit the UK will have to be observed,and quickly I add,or will make any application for UK visa virtually impossible.

  The Japanese will flock back to UK under new manufacturing rules being introduced  lol

“In an era of stress and anxiety, when the present seems unstable and the future unlikely, the natural response is to retreat and withdraw from reality, taking recourse either in fantasies of the future or in modified visions of a half-imagined past.”

 

Alan Moore, Watchmen

[bristolboy]

3 hours ago, zorrow424 said:

oh yes they do,and just see how they do it.  Not kept up with up coming events,no worries,definitely out  31 October,all in hand.

    just an advisory , the letter to quit the UK will have to be observed,and quickly I add,or will make any application for UK visa virtually impossible.

  The Japanese will flock back to UK under new manufacturing rules being introduced  lol

Will those new rules mean even less protection for British workers? Because the main reason that Japan chose the UK over other EU nations was that British workers have less protection from their employers than do other major EU nations.

[soalbundy]

14 hours ago, billd766 said:

quote "They like it here and they are happy being here," Tsuruoka said. "The only hope that they are now wishing is that they will be allowed to continue to do good business here in the UK."

 

Why would they NOT be allowed to carry on as before?

because of the difficulty in exporting to the EU due to higher tariffs so it would be off to Germany or France with maybe a small operation left in the UK for the British market, probably the same would happen for BMW.

[zorrow424]

With the Uks permanent deficit of close on 93 billion to the EU,it would be a good time for UK to look at the reason for such a deficit,and it is Germany that the root cause lies

 Put a sanction on Germany's imported cars to reflect the currency imbalance.  Spain Greece Italy Portugal are the weighing anchors that pulls the Euro down

[bristolboy]

Just now, zorrow424 said:

With the Uks permanent deficit of close on 93 billion to the EU,it would be a good time for UK to look at the reason for such a deficit,and it is Germany that the root cause lies

 Put a sanction on Germany's imported cars to reflect the currency imbalance.  Spain Greece Italy Portugal are the weighing anchors that pulls the Euro down

You seem to have forgotten about the WTO? How do you think it's going to react to such a move?

[SheungWan]

oh yes they do,and just see how they do it.  Not kept up with up coming events,no worries,definitely out  31 October,all in hand.
    just an advisory , the letter to quit the UK will have to be observed,and quickly I add,or will make any application for UK visa virtually impossible.
  The Japanese will flock back to UK under new manufacturing rules being introduced  lol

Lets just imagine things as reality. The Hard Brexit mantra of choice.

Sent from my SM-N935F using Thailand Forum - Thaivisa mobile app

[SheungWan]

Will those new rules mean even less protection for British workers? Because the main reason that Japan chose the UK over other EU nations was that British workers have less protection from their employers than do other major EU nations.

Japanese investment would likely tilt to the negative in the event of no-deal Brexit and its hard-ball post-Brexit period. Not good.

Sent from my SM-N935F using Thailand Forum - Thaivisa mobile app

[Bruntoid]

17 hours ago, Jaggg88 said:

"Japanese companies have invested over 81 billion pounds in Britain, making its FDI the fifth-largest after the United States, Germany, France and the Netherlands, according to UK statistics."

 

So the UK is already well down the pecking order. Honda have already left due to a change in the the car market as they are now concentrating on electric car production in Japan. Just project fear <deleted> from the ambassador. For the record Japanese companies employ just 0.42% of the British work force. 

‘Well down’ ? 5th (Out of about 200) 

 

Still, always return to ‘project fear’ when you’re out of your depth. 

[Bruntoid]

15 hours ago, Scot123 said:

What a stupid thing to be said by an ambassador, 17.4 million people voted for a hard brexit ie a leave vote so in one moment of stupidity he has risked British people boycotting Japanese vehicles. I am looking to buy a new Rav 4 next year now I will seriously think of changing my purchase to a country that shuts its mouth and keeps out of British politics. Even yesterday I went to buy something saw it was made in France and because of Macron I decided not to buy it. 

Tee hee - if that unsold packet of Camembert doesn’t tip the EU into recession nothing will !! 

[Chomper Higgot]

15 hours ago, Scot123 said:

What a stupid thing to be said by an ambassador, 17.4 million people voted for a hard brexit ie a leave vote so in one moment of stupidity he has risked British people boycotting Japanese vehicles. I am looking to buy a new Rav 4 next year now I will seriously think of changing my purchase to a country that shuts its mouth and keeps out of British politics. Even yesterday I went to buy something saw it was made in France and because of Macron I decided not to buy it. 

Where is your evidence that 17.4 million people voted fr a hard Brexit?

[Bruntoid]

6 hours ago, bristolboy said:

You seem to have forgotten about the WTO? How do you think it's going to react to such a move?

Keep the questions simple ????