Japan wants to conclude its current trade negotiations with the UK by the end of next month, according to a Japanese government official familiar with the talks. Speaking to the Financial Times, Tokyo’s chief negotiator, Hiroshi Matsuura, said the short timeline would mean both sides have to “limit their ambitions”, suggesting goals set by London might be unachievable. Referring to the Japanese Parliament, Mr Matsuura said: “To avoid a gap in January, we must pass this in the autumn session of the Diet.
“That means we must complete negotiations by the end of July. The shortage of time means that both sides will have to limit their ambitions.”
International Trade Secretary Liz Truss outlined plans earlier this month to strike a “comprehensive” accord with Japan “that goes further than the deal previously agreed with the EU, setting ambitious standards in areas such as digital trade and services”.
She said: “The agreement will provide more opportunities for businesses and individuals across every region and nation of the UK and help boost our economies following the unprecedented economic challenges posed by coronavirus.”
If accomplished, the deal would be one of the fastest trade negotiations in history, and Britain’s first trade deal in more than 40 years.
So far, negotiations have been taking place virtually due to travel restrictions imposed to curb the spread of COVID-19.
As pressure on Prime Minister Boris Johnson mounts, unearthed reports suggest Japan’s views on Brexit have starkly changed.
In 2016, the Japanese Government sent a brutal letter to the UK, setting out its Brexit demands and urging former Prime Minister Theresa May to negotiate a deal that would have left Britain in the EU customs union and single market.
In a 15-page statement, Japan’s Ministry of Foreign Affairs headed by Koichi Hagiuda, deputy chief cabinet secretary and a former aide to the Prime Minister, Shinzo Abe, warned that Japanese businesses would have relocated away from the UK if Brexit resulted in the UK losing many of its single-market privileges including so-called “passporting” rights.
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The letter said: “Japanese businesses with their European headquarters in the UK may decide to transfer their head-office function to continental Europe if EU laws cease to be applicable in the UK after its withdrawal.”
In particular, the document emphasised that Japanese firms feared for their future potential to export from Britain to third countries because of trade privileges within the EU single market around “rules of origin”.
The report added: “Brexit would make such products unable to meet the rules of origin as EU products, which means that Japanese companies operating in the EU would not be able to enjoy the benefit of the free trade areas concluded by the EU.”
It called on the UK to “maintain access to workers who are nationals of the UK or the EU,” saying the European labour market could have suffered great turmoil if EU nationals could not freely travel between the UK and continental Europe.
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Moreover, the report noted that Japanese banks would have moved their European HQs out of London if the Brexit negotiations failed to secure the financial services passport to operate in the EU.
Japan‘s fears appear to have been unjustified, though.
In February, it was revealed Japan’s Mitsubishi UFJ Financial Group and Mizuho Financial Group had hired a total of nearly 100 staff in London in the last six months, bolstering their trading and investment banking teams despite their concerns over Brexit’s impact on financial services in Britain.