Study: United States Falls Behind in Globalization

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The United States is falling behind in the race to capitalize on globalization, says a new survey by UHY, a London-based accounting and consultancy operation with offices in Sterling Heights. Of the 27 countries considered, the U.S. shared its ranking at No. 25 with Italy — both countries scored 3.7 out of 10.

The survey — which polled taxation and business advisers in each of the participating countries — considered factors including tax arrangements with potential trading partners, the country’s success in growing exports, and labor costs. Germany led the ratings with a score of 6.4, followed by Slovakia at 6.3.

Although the U.S. placed fourth in the World Bank’s Ease of Doing Business survey — meaning the country’s regulatory environment is conducive to business operation — the American economy remains more aligned to domestic activity than the rest of the world.

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UHY officials also noted that, at 35 percent, the U.S. levied the highest gross tax charge on repatriated profits — a “significant barrier to domestic companies looking to expand overseas,” says Richard David, COO of UHY Advisors in Sterling Heights.

“While (the United States) is cushioned by the sheer size of its own domestic economy, it could achieve more by encouraging and supporting American companies in exporting and expanding overseas,” David says. And while the Obama administration has long touted plans to make America more competitive, it has failed to achieve any noticeable improvements.

China was the best performing country of the world’s top three economies with a score of 4.6 (it ranked No. 17 on a global scale). China also imposes high taxes on corporations that bring home profits made overseas, says the UHY.

“In the past Canada, Mexico, Japan, and the (European Union) have been some of our most important and most co-operative trading partners,” David says. “But it is perhaps time for policy makers to look at how we can improve relationships with emerging economies in Africa, and southern and southeast Asia as they become bigger consumers and larger importers as their incomes grow.”

The complete list — ranking each country’s ability to take advantage of future globalization of trade — is as follows:

1. Germany, 6.4

2. Slovakia, 6.3

3. Netherlands, 6

3. New Zealand, 6

3. United Kingdom, 6

6. Denmark, 5.4

7. France, 5.3

8. Czech Republic. 5.1

8. India, 5.1

8. Croatia, 5.1

8. UAE, 5.1

12. Romania, 5

12. Brazil, 5

12. Ireland, 5

15. Russia, 4.7

15. Australia, 4.7

17. China, 4.6

17. Uruguay, 4.6

17. Spain, 4.6

20. Mexico, 4.4

21. Canada, 4.3

21. Austria, 4.3

23. Israel, 4.1

24. Nigeria, 4

25. Italy, 3.7

25. United States, 3.7

27. Japan, 3

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