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Japanese ambassador urges UK not to tax post-Brexit motors supply chain

Written by: Supply Chain Online
Published on: 15 Nov 2016
Category:

NISSAN PIC

Japanese ambassador urges UK not to tax post-Brexit motors supply chain

The Japanese ambassador to the UK, Koji Tsuruoka, has warned that Nissan and other Japanese manufacturers may not be able to keep working in Britain if they cannot freely import parts from the EU.

Until now, the debate concerning Nissan’s future within the UK has centred around the company’s ability to export tariff-free cars to the EU. When speaking to the House of Lords recently, however, Mr Tsuruoka said that it is also important that the UK did not apply taxes to the many car components that come from the EU supply chain.

Mr Tsuruoka said: “A car is made of 20,000 or more parts -- the Sunderland factory assembles the final product, which starts running...but there are many parts which are not produced in Sunderland or the UK. This is a global supply chain; they order parts from where it is most efficient to do so.

“It is these parts that come freely through the borders to the factories that makes this efficient car manufacturing possible. You often see tariffs as an issue that bars the finished product being exported elsewhere, but even before that, there is this flow of parts.”

Mr Tsuruoka said that it is essential that any future deal that the UK makes with the EU minimises complicated border checks, particularly regarding the rules of origin. He added that by definition, artificial barriers are both inefficient and costly, and their implementation is an issue that concerns Japanese car manufacturers.

Mr Tsuruoka called for the UK Government to keep his country informed of the likely outcome of Brexit negotiations if it wants to see Japanese investments continue. He said that if the two governments participate in a productive dialogue with the industries’ support, “we can assure them and give them comfort that there is not going to be any shock.”