LONDON — Leaving the European Union's single market could put at risk the future of 1.4 million jobs and an accumulated $593 billion of direct investment from US companies in Britain, according to a prominent US business group.
The American Chamber of Commerce to the EU said US investment in the UK is more than double the combined US investment in South America, the Middle East and Africa ($244 billion).
But it said in a report published on Wednesday: "Many US companies have invested in the UK, however, to gain access to the much bigger EU single market.
"A future UK-EU trade arrangement is unlikely to simply replicate UK access to the single market. The terms are likely to be less advantageous," the group, which represents US business interests in the EU, said.
Membership of the EU's single market gives free trade access to an economic area of more than 500 million people, but it is dependent on the principle of freedom of movement, which allows EU citizens to move around the 28-nation bloc and, as a result, goods and services to move freely.
US businesses have used the UK as a springboard into the larger EU market to sell services such as finance – an arrangement that is under threat from Brexit. US investment bank JPMorgan, for example, employs 16,000 people in Britain. CEO Jamie Dimon has warned that Brexit will result in jobs moving to the continent.
British Prime Minister Theresa May has signalled she will reject freedom of movement and the EU has been clear that this will mean also giving up access to the Single Market. May is set to trigger Article 50 of the Lisbon Treaty and enter talks with EU leaders over the terms of Britain's departure this month.
US businesses concentrate their European investment in five countries, which, in the first nine months of 2016, accounted for nearly 95% of total $162 billion direct investment flows from the US to Europe.
"The five nations in ranked order: the Netherlands, attracting $42.1 billion and 26.0% of total flows to Europe; the UK ($35.1 billion and 21.6% of the total); Ireland ($31.3 billion and 19.3%), Luxembourg ($29.7 billion and 18.3%); and Switzerland ($15.6 billion and 9.6%)," the report said.
- A simple prisoner's dilemma chart explains everything that could happen to the pound once Brexit negotiations begin
- The pound is diving after parliament paved the way for Brexit to formally begin
- British firms are 'seriously concerned' about crippling tariffs and border delays after Brexit