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May boosted by Australia trade deal hopes

A major trade deal with Australia could be secured after the UK leaves the European Union in a boost to Theresa May, but Japan has raised concerns about the impact of Brexit.

Australian prime minister Malcolm Turnbull said he wants a “very strong” free trade agreement after talks with Mrs May on the sidelines of the G20 summit in Hangzhou, China.

Indian prime minister Narendra Modi also raised the prospect of closer trade ties during his talks with Mrs May, Downing Street said.

But Japan has raised serious concerns about the future of its firms operating in the UK unless safeguards about their European operations are put in place after Brexit.

Japanese prime minister Shinzo Abe is understood to have pushed for greater clarity about Mrs May’s plans during a brief meeting in Hangzhou.

The country’s ambassador in London warned Japanese firms could move operations to the continent unless the UK remained the best place for them to be based.

Koji Tsuruoka told the BBC Radio 4 Today programme: “They are companies responsible to their stakeholders and their duty is to produce profit.

“If the way Brexit ends up does not provide companies with a prospect of making sufficient profit to continue operating in the UK, of course there is no option that they can’t choose. All options are open to them.”

Australian PM Mr Turnbull and Mrs May, who were at Oxford University together, discussed the prospects for a trade deal after Brexit.

Mr Turnbull later told reporters that Australia would be “getting in to deal with the British early” and wanted a “very strong, very open free trade agreement”.

The Australians have also offered to share expertise on trade negotiations with the UK, having concluded a number of trading arrangements in the last few years while Britain has been part of the EU and unable to strike its own deals.

A Number 10 official said: “The Australian prime minister talked about the complementary nature of our economies and therefore, as we leave the EU and are negotiating a new trade arrangement between the UK and Australia, we should start from a maximalist position, looking at what opportunities there are for a broad and deep trade deal between us.”

Downing Street said trade also came up in talks with Mr Modi, who told Mrs May that the two countries were important partners and “nothing about leaving the European Union would change that”.

The Number 10 source said: “The Indians said they would want to look at how we could continue to have a strong trading relationship.

“There was agreement that as we prepare to leave the EU we should be exploring what that looks like.”

The two leaders also discussed migration, with Mrs May pushing for a faster process for returning illegal migrants.

Later, the Prime Minister faces one of her most sensitive diplomatic encounters since entering Number 10 as she meets Chinese leader Xi Jinping for talks following the delay to the Beijing-backed nuclear power station at Hinkley Point.

The Prime Minister will give her verdict on the £18 billion project later this month, with security implications and the high cost of the energy produced by the Somerset plant among the concerns raised by critics about the scheme.

Downing Street said the talks would focus on wider economic ties, with Hinkley unlikely to be a major part of the discussions.

Since the EU referendum, China has invested £1.5 billion in the UK and British firms including Jaguar Land Rover are doing well selling to the Asian superpower’s consumers.

Asked if Mrs May would raise the issue of Hinkley during talks with president Xi, the official said: “The Prime Minister will judge the nature of the discussions. We have clearly communicated with the Chinese in advance our position, the fact that the Government is considering all the component parts of the deal.

“If the Prime Minister feels the need to reassure them this month, then she is ready to do that.” But the official stressed that “this relationship is much broader than just one energy project”. (PA)

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