Japan’s Abe concerned over Brexit’s impact, wants to hold early free trade talks with UK

https://www.theguardian.com/world/2017/jun/26/an-seeks-early-free-trade-talks-with-uk-amid-brexit-fears-shinzo-abe Japan wants to hold early free trade talks with Britain, in a sign of growing concern among the country’s businesses over post-Brexit access to the European market.

Japan’s prime minister, Shinzo Abe, is hoping to soften the blow that Britain’s expected withdrawal from the single market could inflict on Japanese companies by starting informal talks on free trade before Britain leaves the EU, the Nikkei business newspaper said, citing unnamed sources.

Under EU rules, official negotiations cannot begin until after Britain has left the trading bloc. But Abe’s enthusiasm for an early free trade agreement will encourage Theresa May and other pro-Brexit politicians who insist that leaving the EU will mean Britain is better placed to trade freely with major economies.

The Japanese leader is concerned about the consequences of Brexit because of the widely held perception that it will negatively affect Britain’s international standing “at a time when Japan desires a stronger bond between our two island and maritime democracies”, an official in Tokyo who is familiar with Abe’s thinking told the Guardian.

The official, who asked not to be named, added that Abe was aware that the final Brexit deal “is beyond the reach of the Japanese government”.

He said: “Whether the emerging circumstances will turn out to be in favour, or otherwise, of the City of London’s interests is what London and Brussels must work out. Needless to say, Tokyo is lobbying London so that Japanese financial interests are protected.”

Brexit poses serious risks for Japanese firms if, as expected, it leaves Britain outside the single market.

Japanese financial institutions are concerned about the loss of the “EU passport”, which enables banks based in London to operate freely across Europe’s financial markets while retaining most of their staff and operations in the capital.

More than 1,000 Japanese firms operate in Britain, employing about 140,000 people, and have invested more than £40bn in the country.

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About Kelvin Ching

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