Japan has a great deal invested in the United Kingdom and the European Union, which is why it recently sent a strong message to both on behalf of its businesses located in the UK and EU with expectations and demands around Brexit.

The 15-page message underscored the uncertainty and potential disturbance that a Brexit transition poses and the Asian country’s intended cooperation to ensure the withdrawal moves forward smoothly.

The message also enumerated the ways in which Japan economically affects the UK and EU and also depends on them. For example, Japanese businesses in the EU, with a significant number of them located in the UK, have generated 440,000 jobs; nearly half of Japanese direct investment in the EU in 2015 passed through the UK; and by the end of 2015, the UK was among the destinations for Japan’s investment stock within the EU.

Ahead of the Brexit transition, a number of the Japanese businesses operating in the UK and EU have submitted a variety of requests to their government, including specific ones that can help them continue their economic activities as freely as possible, regardless of the UK-EU negotiations.

[Requests directed at the UK and the EU]

• maintenance of the current tariff rates and customs clearance procedures;
• introduction of provisions for cumulative rules of origin;
• maintenance of the access to workers who are nationals of the UK or the EU;
• maintenance of the freedom of establishment and the provision of financial services, including the “single passport” system;
• maintenance of the freedom of cross-border investment and the provision of services as well as the free movement of capital, including that between associated companies;
• maintenance of the current level of information protection and the free transfer of  data;
• unified protection of intellectual property rights;
• maintenance of harmonisation of the regulations and standards between the UK and the EU (including the maintenance of established frameworks of mutual recognition and equivalence);
• securing the UK’s function as a clearing centre for the Euro and the location within the UK of EU agencies such as the European Medicines Agency (EMA); and
• maintenance of the UK’s access to the EU budget for research and development and participation in the Japan-EU joint research project.

[Additional requests directed at the UK]

• liberalisation of trade in goods without the burdens of customs duties and procedures;
• maintenance of access to workers with the necessary skills;
• maintenance of basic policies regarding the entry of foreign capital;
• implementation of measures to promote investment;
• maintenance of the current levels of information protection and the free transfer of data in case the UK establishes its own legislation distinct from the EU’s;
• ensuring the consistency of regulations and standards between the UK and the EU; and
• ensuring that the EU’s research and development budget applies to research institutions in the UK.

[Additional request directed at the EU]

• provision of transitional arrangements for the single passporting system.

Further bracing for 2018 impact, Japan asserted in its message that it is desirable that the current business environment in Europe be maintained as much as possible and that the existing legal frameworks based on international agreements between the UK, EU and Japan be preserved to the maximum extent.