Does Japan’s EU deal mean “Sayonara, UK?”

Will a free trade deal between Japan and the EU prompt Japanese companies to leave Great Britain?

That was the question raised in the British media, following the Japan-EU agreement, which was announced in Brussels by the Japanese Prime Minister Shinzo Abe.

The Financial Times said Mr Abe hailed the deal as “the birth of the world’s largest, free, industrialised economic zone.” The European Commission welcomed it as “the most important bilateral trade agreement ever concluded by the EU”.

What about the UK?

So, where does it leave Japan’s relationship with the UK?

Trade between Britain and Japan is worth around ten billion pounds a year and many Japanese companies have factories in the UK, including Toyota, Nissan and Hitachi.

A leading Oxford professor has warned that some of those Japanese manufacturers will now relocate to Europe.

“Damaging and alarming”

Professor Ngaire Woods, Dean of the Blavatnik School of Government at Oxford University, told the BBC Today Programme that the Brexit is seen as “very damaging” to Japanese business interests in the UK and that investment will be diverted to the EU.

She said the Japan-EU free trade deal is “rather alarming” for Britain, which faces political and economic uncertainty following the Brexit vote.

The Japan-EU deal still needs to be ratified by both sides. Prior to its announcement, some companies such as Nissan and Toyota pledged to raise their investment in the UK despite Brexit.

Calm Ambassador

The Japanese Ambassador Koji Tsuroka spoke on the BBC. His calm tone contrasted with the alarm mentioned by Professor Woods.

Ambassador Tsuroaka said the Japan-EU deal was “good news for all, including Japanese companies operating in the UK.”

He said the cornerstones of the British-Japanese relationship are commitments to democracy, rule of law and free trade – and these are unaffected by Brexit.

He said Japan and Britain would work together for the common good. “It’s not going to be a confrontational relationship: it will be collaborative.”

Brexit cliff edge

However, he did warn that it would be “extremely damaging” if Britain’s negotiations over Brexit are not completed within two years, leaving the country “on a cliff edge.”

Ambassador Tsuruoka said any bilateral trade agreement between the UK and Japan would depend on the future relationship between Britain and the EU, to be decided during the Brexit negotiation process.

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