Several recent international business developments generate cautious optimism for some San Diego business owners. While we await the work the US Congress intends to do on corporate taxes and transfer pricing issues, news out of Mexico today regarding a historic memorandum between the Mexican Senate and the San Diego Regional Chamber of Commerce signals positive developments in trade and international business opportunities for San Diego businesses. Mexico is a major trading partner for the US and for the San Diego business community particularly. Today’s agreement establishes a “working group” comprised of business leaders and politicians from the San Diego-Tijuana region, as well as members of the Mexican Senate. The group will meet twice a year through 2018 to collaborate on legislation and other issues related to this vital international business corridor.
Meanwhile, the current administration today sent a draft of their recommendations regarding NAFTA, signalling a softer approach to modifications to the controversial trade agreement than the threats made during the campaign last fall. A key issue focused upon arbitration panels established by NAFTA that allow businesses and investors from Mexico, Canada and the US bypass the Court system to resolve trade and business-related disputes. Many conservative voices have expressed serious concerns about the impact of these panels on national sovereignty. The new administration proposal seeks to “improve procedures to resolve disputes” instead of eliminating the arbitration panels altogether.
However, one component of the proposed draft would allow a NAFTA nation to implement tariffs if a perceived “flood of imports” were to cause “serious injury or threat of serious injury” to domestic US businesses.
What will the impact of these international business developments have upon San Diego businesses in the coming months? How will proposed changes affect international business tax planning? The key to success in the coming months and years is your company’s ability to make informed decisions quickly and efficiently. The accurate market and financial insight for these decisions should largely come from your own internal processes and accounting systems, informed by experienced business, legal, tax and accounting experts. Allen Barron serves as a single-source vendor to many businesses here in San Diego and throughout the Southwest United States. If you are interested in exploring our firm’s ability to positively impact the growth and profitability of your business we invite you to contact us or call 866-631-3470 for a free consultation.