Business

Japan’s Abe cautions against Brexit regulation cliff edge

Says overnight rule change would sow confusion

Reuters April 30, 2017

Japan's Prime Minister Shinzo Abe addresses reporters. PHOTO: REUTERS

LONDON: Japan’s Shinzo Abe called on Prime Minister Theresa May to ensure a smooth transition for business as the United Kingdom leaves the European Union, to avoid a cliff edge where rules and regulations for firms change overnight.

A day after talks with May at her country residence at Chequers outside London, the leader of the world’s third largest economy made clear his concerns over Brexit while also underlining his long-term commitment to the United Kingdom.

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Japanese companies including carmaker Nissan and conglomerate Hitachi have invested more than £40 billion ($52 billion) in the United Kingdom. Japanese companies employ a total of 140,000 people in the country.

“When the UK leaves the EU, if the rules change overnight, there will be a concern about a possible confusion arising,” Abe told reporters in London.

Abe added that he wanted the UK to prioritise “a smooth and transparent process including setting a transition period”.

The outcome of the Brexit negotiations will shape the future of Britain’s $2.6 trillion economy, the world’s fifth biggest, and determine whether London can keep its place as one of the top two global financial centres.

Since the shock June 23 Brexit vote, Japan has expressed unusually strong public concerns about the impact of Brexit on the United Kingdom, the second most important destination for Japanese investment after the United States.

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May has said she wants what she calls a “phased implementation” for Brexit, though she has two years of complicated negotiations ahead with 27 other members of the European Union over how that would work.

While many diplomats and chief executives say they expect a Brexit divorce deal to be struck, there are thousands of complicated trade, financial and other regulations which need to be clarified to ensure trade is not interrupted when the United Kingdom leaves at the end of March 2019.

Published in The Express Tribune, April 30^th, 2017.

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