Tag: Brexit

Should the UK Look to Asia Post-Brexit?

Post-Brexit, where to now for the UK?  This question has been on the minds of various economic commentators and executives and some feel the answer strongly lies in south Asia. Given that the UK’s political perception is somewhat dicey, south Asia’s patience could just be the perfect fit.  Continental Europe is not exactly famous for its capacity at coping with any kind of political turmoil.

Furthermore, when you look at Asia, most business is conducted there in English.  British executives do not traditionally pride themselves on their proficiency in foreign languages and in other parts of Europe that is often met with substantial disdain.  Given the fact that in addition to that, 9 percent of foreign-born Brits hail from India, 6 percent from Pakistan and 2 percent from Bangladesh, this Asian origin could – as noted in a recent Financial Times article written by Daiva Repeckaite – result in a “cultural and economic bridge” following Brexit.

There is still a chance though that Europe could be the place of choice for British executives to invest.  Or at least, borderline.  Given that British PM Theresa May just signed a $US125 million ($165.6 million) defense equipment deal with Turkey, this is likely to result in greater trade between the two regions.  Now Turkey is interesting because it was just under three years ago that the country started its process of going into the Europe Union (not that long before Britain started its very own exit) and anyway geographically it is a bit of a fence-sitter between Europe and Asia, resulting in a somewhat confused identity.

Still, with May’s recent deal the UK is hopeful that this will lead to additional trade between the allies, pushing for an aviation security program simultaneously.   May actually referred to the deal as indicative of Britain being a “great, global, trading nation and that we are open for business,” so really this open-ended statement could lead the UK in any direction, east or west.

UK and Japan: Working Together

stock-exchange-1222518_640The Japanese and British have been working together for centuries, dating back to the year 1600, when William Adams arrived on Japanese soil. There was a cessation of relations for over 200 years however, from 1641 to 1853, but at that point the 1854 Treaty led to relations being resumed. Since then they have gone from strength to strength, with just five years ago William Hague, Britain’s Foreign Secretary referring to Japan as “one of [Britain’s] closest partners in Asia.”

So if Britain leaves the EU, what will this mean for its relations abroad, specifically with Japan? According to Japan’s Prime Minister, Shinzo Abe, bad news. He said that it could result in a “withdrawal of Japanese companies from UK, as they often see UK as gateway to European markets.” He has thus cautioned British voters to consider this as investment from Japan would likely come under threat, resulting in less stability for the 100,000 jobs this provides.

This would mean a huge fiscal loss, causing potential damage to Britain’s economy. Japan’s economy is huge – the world’s third largest (bigger than Germany and the UK together) and in terms of technology it is seen as Asia’s “high-tech powerhouse.” Furthermore, investing there, is relatively easy; according to a UK government publication “you can set up a company in 14 days.”

Abe also mentioned that one of the reasons over a thousand companies from Japan invest in Britain right now is due to it being “the gateway to the EU.” Should this no longer be the case due to Brexit, the investments could move elsewhere. He added that their “priority is reaching trade deals with the EU, and large trade areas, rather than with individual states in the EU,” he said.