Bri­tain’s PM May vis­its Japan with eye on Brexit fears

Business World - - THE WORLD -

OSAKA — Bri­tish Prime Min­is­ter Theresa May ar­rived in Japan on an of­fi­cial visit Wed­nes­day with an eye to sooth­ing Brexit fears and push­ing ahead on early free- trade talks with the world’s num­ber three econ­omy.

Ms. May is sched­uled to sit down with Toy­ota’s chair­man dur­ing her three- day tour which starts in Osaka be­fore mov­ing to Tokyo where she will meet with Em­peror Ak­i­hito and Prime Min­is­ter Shinzo Abe, who vis­ited Bri­tain this year.

Bri­tain for­mally told the EU in March it will with­draw from the 28- mem­ber bloc, stir­ring fears in Japan about what the move would mean for com­pa­nies with sig­nif­i­cant busi­ness in­ter­ests in the coun­try.

“We’re go­ing to ask for trans­parency and pre­dictabil­ity so as to min­i­mize the im­pact on (our) com­pa­nies,” a Ja­panese for­eign min­istry off icial in charge of Euro­pean af­fairs said ahead of Ms. May’s visit.

More than 1,000 Ja­panese com­pa­nies do busi­ness in Bri­tain, em­ploy­ing some 140,000 lo­cal peo­ple with many us­ing Bri­tain as a stag­ing post to do busi­ness in Europe.

Among them, au­tomak­ers Toy­ota and Nis­san have fac­to­ries in Bri­tain while tech gi­ant SoftBank last year an­nounced the $32-bil­lion pur­chase of Bri­tish iPhone chip de­signer ARM Hold­ings.

But Bri­tain is now at risk of los­ing the “pass­port­ing rights” fi­nan­cial firms use to deal with clients in the rest of the Euro­pean bloc.

That, along with po­lit­i­cal un­cer­tainty sur­round­ing Brexit ne­go­ti­a­tions, has spurred for­eign com­pa­nies that have set up shop in Bri­tain, or es­tab­lished Euro­pean head­quar­ters there, to be­gin look­ing for al­ter­na­tive lo­ca­tions.

Ja­panese mega­bank Mit­subishi UFJ has said Am­s­ter­dam and Paris were fa­vorites to be the new Euro­pean base for its se­cu­ri­ties op­er­a­tions.

Bro­ker­age No­mura, Daiwa Se­cu­ri­ties and Su­mit­omo Mit­sui Fi­nan­cial Group are plan­ning to move their main EU bases from Lon­don to Frank­furt.

‘BEST SCE­NARIO’

Bri­tain’s for­eign min­is­ter Boris John­son boasted about Ja­panUK in­vest­ment when he vis­ited this sum­mer, but lo­cal firms will be look­ing for solid as­sur­ances from Ms. May, who is trav­el­ing with a busi­ness del­e­ga­tion.

“The best sce­nario for us is that Bri­tain can­cels its Brexit de­ci­sion,” said Ichiro Hara, head of the in­ter­na­tional af­fairs bureau at Japan’s top busi­ness lobby Kei­dan­ren.

“But if that isn’t an op­tion, we are say­ing we need a tran­si­tional pe­riod... to mit­i­gate the neg­a­tive im­pact,” he told AFP.

Ms. May — who ar­rived in Osaka Wed­nes­day and is to at­tend a tra­di­tional tea cer­e­mony in nearby Ky­oto — will also be dis­cussing is­sues tied to global ter­ror­ism and re­gional se­cu­rity, af­ter North Korea sharply es­ca­lated re­gional ten­sions by launch­ing a ballistic missile over Japan on Tues­day.

“The prime min­is­ter is ou­traged by North Korea’s reck­less provo­ca­tion and she strongly con­demns these il­le­gal tests,” a spokes­woman for Ms. May said Tues­day.

“From our per­spec­tive, we are will­ing to con­tinue to work with our in­ter­na­tional part­ners to keep the pres­sure on North Korea.”

Ms. May is also ex­pected to fo­cus on push­ing for­ward with plans for a Bri­tain-Japan free trade agree­ment.

But an­a­lysts said there would not likely be much progress un­til Japan and the EU wrap up a nearly- fi­nal­ized trade deal, and de­tails of Brexit are worked out.

“You can­not start off icial talks about such an idea un­til Bri­tain leaves the EU,” said Osamu Tanaka, a se­nior econ­o­mist at Dai­ichi Life Research In­sti­tute.

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