Ahead of the G20 meeting in Osaka Japan’s Foreign Minister Taro Kono has warned of serious consequences that would follow a No Deal departure from the European Union and said there is no chance of a new trade treaty being agreed between the UK and Japan ahead of any crash out – meaning all the advantages secured through the EU-Japan Economic Partnership treaty, which came into force in February this year, would be lost.
The Department for International Trade has previously said the deal, which is the biggest ever negotiated, would increase UK GDP by up to £3bn in the longer term.
The Foreign Minister warned that the car industry would be most exposed to the damage from a destructive No Deal, adding to gloom in a sector where problems of global over-capacity have been magnified in Britain by the uncertainty and chaos surrounding Brexit.
The warning coincides with the Society of Motor Manufacturers and Traders (SMMT) cautioning that No Deal could cost Britain’s motor manufacturers £50,000 a minute.
Commenting, Anna Turley MP, leading supporter of the People’s Vote campaign, said:
“We now know just how reckless and dangerous the threat of a destructive No Deal really is. It is an outrage that, purely to pander to the 160,000 members of the Conservative Party – overwhelmingly white, middle class, middle aged and concentrated in the South East of England – Boris Johnson and Jeremy Hunt are both threatening us with this disastrous outcome even though it has never been supported by anything but a small minority of the voters.
“For my constituents No Deal will mean No Steel and will also wreak havoc in our chemical industry.
“Hunt and Johnson have no right to force such a charter for job destruction on us. It is disgraceful that they would happily barter away families’ livelihoods and young people’s futures to win an internal party election.
“That is why more and more people, including a growing number of Conservative MPs who are willing to put the national interest ahead of the party interest, are joining the demand for a People’s Vote.”
The Japanese Foreign Minister told the BBC that he told both Hunt and Johnson, "Whenever we had a meeting, that was one of the major issues - please... no no-deal Brexit.”
He added of the car industry: “Right now they have very smooth operations. Their stock for each part is only for a few hours. But if there is no-deal Brexit, and if they have to go through actual custom inspection physically, those operations may not be able to continue.
"And many companies are worried about [the] implications because they don't know what's going to happen".
The EU-Japan Economic Partnership is the world’s largest trade deal, covering a third of global economic output and 635 million people. As well as scrapping tariffs on the bulk of EU-Japan goods trade it makes some moves to open up services trade. If the UK drops out of the deal it will have to enforce basic WTO trade terms – the worst in the world.
The SMMT’s 2019 automotive trade report warns that WTO tariffs would cost £4.5 billion for passenger cars alone. The industry directly employs 168,000 – more than will get the chance to vote in the Tory leadership election.
The SMMT’s report can be read here: https://www.smmt.co.uk/wp-content/uploads/sites/2/2019-UK-AUTOMOTIVE-TRADE-REPORT.pdf