AKIRA SHIMIZU of Keidanren, Japan’s main business lobby, has a theory about Brexit. The first one, he says, came in 1534 with Henry VIII’s decision to break from the Catholic church. This rupture sparked a period of free-thinking innovation that culminated in James Watt’s invention of the steam engine 250 years later and the advent of the Industrial Revolution. With luck, chuckles Mr Shimizu, Brexit the Sequel will spur a somewhat quicker reinvention of Britain’s economic model.
But even Mr Shimizu thinks Britain may face “five to six” years of pain after it leaves the European Union, and more if it fails properly to adapt to the change. Britain accounts for nearly half of Japanese investment in the EU, so Japanese firms have more to lose than most from a messy divorce. Japan’s car plants in Britain rely on complex supply chains that span Europe; its London-based banks use “passporting” rules to operate across the EU. If Britain leaves the single market, some of this...Continue reading
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