Survey Says Japanese Firms Are Not Planning To Ditch Britain As Brexit Looms

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A survey that was conducted by Reuters discovered that Japanese companies that have links to the United Kingdom say that they have no immediate plans to leave the country as its government tries to hammer out the terms of its exit from the European Union.

Many said that they would take a “wait-and-see” stance towards Brexit.

The government of Japan has been vocal regarding its concern over the impact of Brexit on the United Kingdom as the country is considered as the second-biggest destination for Japanese investment after the United States.

Last year, Tokyo warned that Japanese firms would have to leave the United Kingdom if trade barriers from Brexit made businesses unprofitable.

The decision of the United Kingdom to withdraw from the European Union has raised some concerns in London that Japanese firms may move operations elsewhere if tariff-free trade ends with the rest of the European bloc.

However, 89 percent of firms with business links to the United Kingdom said that they would make no change in their operations and 3 percent are actually considering expanding their business in the country.

The April 3-15 survey revealed that around 8 percent planned to downsize their business operations in the United Kingdom, however, none of the firms that were surveyed planned to leave the country.

However, in written comments, many companies said that they would follow the Brexit developments “for the time being,” suggesting that they could leave the country if Brexit proves bad for business.

In the survey, a machinery maker wrote: “We have a subsidiary in France so Brexit affects us. But we want to wait and see for the time being.”

He added: “Britain still takes up an important position in Europe, and we have not completely figured out concrete effects of Brexit.”

The Reuters Corporate Survey is conducted monthly for Reuters by Nikkei Research. It polled 478 large and mid-sized companies with managers responding on condition of anonymity. Approximately 240 answered the questions on Brexit.

Of those that were surveyed, 61 said that they had business links to the United Kingdom, and responded to more detailed questions regarding Brexit.

At the end of 2016, Japanese business investment in the United Kingdom stood at 13.4 trillion yen (92 billion pounds). It accounted for 9 percent of the overall foreign direct investment of Japan, with successive leaders since Margaret Thatcher promised them a business-friendly base from which to trade across the continent.

After the surprising Brexit vote in 2016, Japan expressed its concerns about a cliff edge that could disrupt trade when the United Kingdom formally leaves the bloc.

Last February, Honda said that it will close its only British car plant in 2021 with the loss of around 3,500 jobs.