'Almost half of US companies eyeing Brexit moves' – survey
Over 40 per cent of American companies with a UK base are considering relocating at least partly due to fears of a hard Brexit, says survey from global law firm Gowling WLG.
Gowling WLG surveyThe survey of more than 500 US company executives by global law firm Gowling WLG showed larger companies, particularly those involved in finance, life sciences and the food and drink industry, were most likely to be considering moving, while those involved aerospace were the least likely.Not surprisingly, perhaps, the extent of a company's business with the rest of the EU was a major determinant in relocation issues, which have been sparked by the UK referendum decision to leave the EU. Firms were also putting investment decisions in Britain on hold until the course of Brexit negotiations became clear.Bernardine Adkins, head of EU trade and competition at Gowling, said, "The strong UK-US trade relationship that has been carefully nurtured over the past 50 years is in serious jeopardy. This is despite a wide consensus amongst US firms that the unique dynamics of the UK market and its access to the rest of the EU drive their preference for doing business here."Concerns that Brexit will have an effect on current investment decisions mean this needs addressing now, not later."
US firms to choose Europe if hard Brexit goes aheadThe survey showed that a majority of US firms were in favour of a direct US-UK trade deal but that many – including 88 per cent of large American companies – would be likely to bypass the UK in order to continue to trade with Europe in the event of a hard Brexit."Two-thirds of US business leaders say they would prefer some form of soft Brexit with the Swiss model the most popular," said Gowling. "More than four in five US companies would favour a direct trade deal between the US and UK."Although the report was commissioned prior to the US election, this chimes with President-elect Donald Trump's stated preference for bilateral trade deals between countries. The financial services and food and beverage sectors are the biggest supporters of a trade deal."
The future of UK-US trade relationsThe study found that opinion among US business leaders was split on the question of impact Brexit would have on future UK-US trade with just over half believing the results would be positive – most noticeably in the financial services sector – while a quarter felt the outcome would be negative.On investment decisions, the survey found that more than two-thirds of firms felt that Brexit uncertainties over the future regulatory environment was having an impact on current investment decisions.Gowling added, "Ninety-five per cent of US firms say they will need third party support and advice in order to successfully deal with Brexit. This is by far and away the most important issue for the financial services sector with two-thirds saying they will need financial support."Technical support is more of an issue for aerospace, life sciences and tech companies. Legal support is most required by the aerospace industry."Attitudes to Brexit vary in different US sectors: companies in the food and beverage, life sciences and financial services sectors say they are most likely to consider relocating with aerospace the least likely. The automotive and aerospace sectors are the most pessimistic in the short- and long-term about the implications of Brexit."
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