Warnings Of Brexit Impact Issued By European And Japanese Business Groups

Signalling their growing concern as the UK prepares to start the formal process of leaving the EU, overseas companies that invest in the UK issued a flurry of warnings on Tuesday about the threat Brexit poses to their businesses.

A post-Brexit settlement which would preserve the integrity of the single market, deliver a smooth transition and avoid creating “unnecessary” obstacles to trade and investment was called for by forty European business lobbies, representing 20m companies in 34 countries, issued a statement.

Meanwhile, a communiqué taking issue with Mrs May’s “no Brexit deal is better than a bad deal” — a comment that has sent a chill through the boardrooms of Japanese companies that collectively employ an estimated 140,000 people in the UK, is being prepared by Japan’s Keidanren, the powerful business group whose membership includes Toyota Hitachi and other large Japanese investors in the UK.

“The key message is this: please negotiate with deeper consideration for the economy,” reports the media quoting a person who has seen a draft of Keidanren’s demands and policy proposals, which are expected to be released in early April.

The letter would be the third major representation from Japan since the June 2016 referendum and revives earlier warnings from Japanese corporate leaders of Britain’s “cliff edge” exit from a market of 500m consumers.

However, with Siemens, one of the world’s largest engineering companies, reaffirming its commitment to the UK in at an event in Berlin on Monday and Deutsche Bank planning a move to new London headquarters in 2023, despite uncertainty over the outcome of Brexit negotiations, other foreign investors have struck a more positive note.

“A significant number of EU and UK jobs depend on exports, and production processes are profoundly intertwined across the wider Europe,” said BusinessEurope in a statement by groups including the BDI in Gemany, , Medef in France, the CBI in the UK and Poland’s Lewiatan. “Negotiations should be led in a true spirit of partnership and mutual loyalty.”

According a survey of 2,200 companies published on Tuesday by the German chambers of commerce and industry (DIHK), even though the departure terms are not yet known, almost one in 10 German companies in the UK plans to respond to Brexit by shifting investments to other EU states.

“Brexit will significantly damage the business of German companies with the UK,” said Erik Schweizer, DIHK president, adding that exports to Britain were already down 3.5 per cent last year, with most of the decline coming after the Brexit vote in June.

Amid concerns that a British withdrawal from the single market could leave the company with a massive tax bill, Bertelsmann, Europe’s biggest media company by revenues, said that it might move some of its business from London in the event of a hard Brexit.

“If Brexit results in significantly higher costs for our business we would have to reconsider our position,” said Thomas Rabe, chief executive of the German TV, publishing and music group, who said that the company would make a decision in 2018.

Google has said that it will almost double its headcount in London as it proceed with plans to open a new headquarters there. The IT gint as said this after the EU referendum vote. Plans to increase hiring or property investment in the UK have also been announced by Facebook, Amazon and Apple.

(Adapted from CNBC)


Categories: Economy & Finance, Geopolitics, Strategy, Uncategorized

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