Japanese government wrong to be critical of ‘Brexit’
Jonathan Lindsell, 22 July 2013
Over the weekend, the Japanese embassy in London made a contribution to the coalition’s ‘EU balance of competences review’. Japanese Prime Minister Shinzo Abe has just won a secure mandate through gains in the Upper House for his party, the Liberal Democratic Party, and his coalition partners, New Komeito.
The review asks stakeholders to submit evidence about whether the EU is fit for purpose, should go further or should roll back. It has suffered criticism for creating a ‘shopping list’ for a future renegotiation. France and Germany refused to submit evidence, fearing that whatever they said would be twisted (as evidence of continental support for devolution, or evidence of centralising Eurocracy.) The Japanese seem to have had no such qualms:
“The UK, as a champion of free trade, is a reliable partner for Japan. More than 1,300 Japanese companies have invested in the UK, as part of the single market of the EU, and have created 130,000 jobs, more than anywhere else in Europe.
“If the UK leaves the single market, countries investing in the UK and exporting to the EU would have to pay tariffs, and that is not good news.”
We should read this not so much as a threat as a caution – leave the single market and foreign direct investment (‘FDI’) might dry up, along with jobs. However, the Japanese statement rests on an unsupported predicate – that the UK would lose all access to the single market in the vent of ‘Brexit’. This is a desperately unlikely scenario – a recent Civitas publication shows how the interests of the German automobile industry alone would probably ensure UK – EU free trade. Taking into account the huge trade deficit the EU has with Britain, free trade (and therefore Japanese market access) are assured.
Not to belittle the Japanese concerns, but they have been wrong in the past. In the early 2,000s their big businesses lobbied Gordon Brown to join the Euro – Toyota, Honda and Toshiba have all encouraged EU states to get stuck in. Indeed, Latvia will join in January 2014, despite huge popular opposition. Britain kept the pound, and look how it’s done: European car sales have crashed while British flourish.
The British industry saw 11% growth – a trend that has been steadily positive for 16 months – whilst Holland, Germany, France and Austria all contracted. Ironically, sale of niche German and Japanese brands in Britain is a major part of our strength. Indeed, since Cameron’s Bloomberg announcement, in the knowledge that the UK might formally leave the EU, the British car industry has seen inward investment. Rolls Royce will create another 100 jobs with the release of its ‘Wraith’ model. Jaguar-Land Rover (owned by Indian firm Tata) received £2.75 billion and Ford’s Bridgend plant got £24 million.
Most tellingly, Toyota created another 70 jobs in Wales, Nissan’s Sunderland plant has been expanding and Honda is upholding its £267 million Swindon investment. Japanese business cannot be that worried about a Brexit.