Molly has said that government attempts to replicate a Japan-EU trade deal would be disastrous for the UK. The warning comes as Theresa May begins a two-day visit to Japan today, during which she hopes to discuss a UK-Japan version of the deal Tokyo agreed in principle with the EU last month.
Molly has been strongly critical of the EU-Japan deal , known as JEFTA, which contains many controversial elements contained in similar trade deals such as TTIP and CETA, including proposals for an investor settlement dispute system (ISDS) which would allow corporations to sue governments in special ‘investor courts’ for enacting regulation which damage their profits.
Molly recently wrote to the EU Commission challenging them over the imbalance in the trade deal. Proposals include a drop in tariffs on cheese exports in return for lower tariffs on imported Japanese cars. She asked the Commission to share its estimates of the relative value of EU exports of dairy products to Japan compared with EU imports of cars from Japan. A response from the Commission confirmed that car imports massively outstrip dairy exports: between 2014 and 2016, just 0.4% of the EU’s exports to Japan was in dairy products, while 13% of the EU’s imports from Japan were cars. Commenting on Theresa May’s attempts to secure a new trade deal, Molly said:
“Mrs May has returned from her holiday, but is still far away in cloud Cuckoo land. The Japanese are much more interested in securing a trade deal with the EU than with the UK, and wont negotiate until Britain is out of the EU.
“But the EU-Japan deal has anyway more holes in it than a Swiss Emmental. The €248 million the Japanese spent on dairy products from the EU pales into insignificance when compared to the €7.8 billion we spent on their cars. This disastrously one-sided deal is what Theresa May is seeking to replicate. This would be hard cheese for the UK but a ride in the fast lane for Japanese exporters. But with Brexit threatening a meltdown of the UK economy, the Tories consider any trade deal, however dodgy, better than none.
“Theresa May would do far better reassuring her Japanese counterparts that the UK will seek to remain in the single market and customs union. This is what is really needed to allay fears and restore confidence for Japanese firms based in the UK and operating across Europe.”