Japanese businesses are hoping the United Kingdom and the European Union will swiftly forge a free trade agreement following the country’s exit from the bloc on Friday, as a failure to do so could adversely affect their operations in Europe.
They are concurrently asking the Japanese government to strike an FTA with the United Kingdom as the Japan-EU trade pact, setting rules on investments and tariffs, is no longer applicable to trade relations between Tokyo and London.
“The government is set to discuss with the United Kingdom a new trade deal but talks depend on how negotiations with the European Union are settled,” said Hiroaki Nakanishi, chairman of the Japan Business Federation, a major business lobby known as Keidanren.
“Japan needs to conduct various talks with both the United Kingdom and the European Union in a public-private effort,” Nakanishi said at a recent press conference.
The government intends to proceed with trade negotiations with the United Kingdom based on the Japan-EU FTA that came into effect last year.
The agreement allows consumers’ access to cheaper imported food items and elimination of tariffs on industrial products to the benefit of exporters.
“I will swiftly tackle building an ambitious economic partnership with the United Kingdom,” Japanese Economy, Trade and Industry Minister Hiroshi Kajiyama told a press conference on Friday.
Akio Mimura, chairman of the Japan Chamber of Commerce and Industry, said, “Essentially the United Kingdom’s departure is nothing positive for the Japanese companies doing business there so the focus going forward is how much the negative impact is alleviated.”
The United Kingdom is a major trade partner for Japan, with total exports to it in 2018 totaling 1.53 trillion yen ($14 billion), the second-largest in the EU bloc after Germany.
By imports, the United Kingdom was the fourth-largest partner among EU members at around 909.4 billion yen.
The United Kingdom is home to offices of nearly 1,000 Japanese companies investing in the country and other parts of Europe, according to the Japan External Trade Organization.