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Today’s Top Headlines




Commerce Secretary Discusses NAFTA Agenda

by Mike Godfrey, Tax-News.com, Washington

03 April 2017

US Commerce Secretary Wilbur Ross has discussed the amendments the United States will be seeking to the North American Free Trade Agreement (NAFTA).

Ross told CNBC the United States will update NAFTA to ensure there are no "back doors" for non-NAFTA countries to access its provisions through lacking rules of origin.

Secretary Ross said rules of origin are "a loophole that allows material from outside [NAFTA states] to come in and yet be counted as though it was NAFTA-produced, up to certain limits."

Moving on to discuss trade in general, he noted that the United States has three times sought to level the playing field for US businesses concerning foreign countries' value-added tax systems, which permit refunds for exported goods. He said: "We in the US do not have a value-added tax but the World Trade Organization three times has turned down legislation three times drafted by our Congress to percent the rebate of our equivalent, namely corporate income taxes, on our exports. It's totally unfair to let our competitors get a rebate, sometimes as high as 20 percent, on their exports. And, yet, we can't get a rebate of our taxes. That's a problem that has to be solved in one way or another, and we will be using NAFTA as a partial means of addressing VAT."

"It would be a nation-to-nation solution, not a solution particular to any one individual company," he told CNBC.

He said the administration is undecided on the issue of the Border Adjustment Tax (BAT), saying that although the Administration is "studying it very, very carefully ... the administration has taken no position on it as of yet."

Ross confirmed that he hopes to initiate the 90-day consultation period for NAFTA renegotiation prior to the spring recess.

TAGS: Finance | tax | business | value added tax (VAT) | anti-dumping | China | Mexico | legislation | United States | trade | North America | Tax

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