Theresa May’s visit to Japan epitomises the dual optimism and uncertainty around the impact of Brexit on UK trade.
On the one hand the prime minister’s trip could be viewed as the U.K. playing a strong hand, parading British expertise in cyber-security at a time when defence is at the forefront of Japanese minds. May will hope the visit lays the ground for a post-Brexit trade deal with one of its strongest trade links; over half of all Japanese investment in Europe currently flows into Britain. The £500m deal announced by Aston Martin on Wednesday was certainly a nudge in that direction.
However, the Japanese reluctance to agree anything with Britain until they know how Brexit will play out and terms of their own deal with the EU are fixed typify Britain’s current position – very little can be planned without more concrete knowledge of how Brexit will play out. Labour’s change in stance earlier this month to remain in the single market during a transitional phase will have encouraged the Japanese among many others, but many questions remain unanswered.
Whatever direction Brexit takes and whatever deals are agreed in the coming years, British business owners should be looking at export opportunities as a way to increase profits and provide security in a post-Brexit economy.
Incentives may well be forthcoming; as this report illustrates the U.K. has the largest trade deficit of the world’s largest 28 economies. The need to make up this deficit and the weak pound could spell good news for exporters, whatever the outcome of Brexit.