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Companies unsure of GATT, NAFTA impact on U.S. business.

U.S. corporate controllers were split on the question of whether the General Agreement on Tariffs and Trade (GATT) and the North American Free Trade Agreement (NAFTA) would have an impact on their businesses in the next year, according to a survey conducted by the Institute of Management Accountants.

Forty-seven percent of the approximately 460 respondents thought their companies would not be affected. Most of the remainder said they would, with only 7% expecting the impact to be negative.

Half the companies that already operated overseas were planning to expand their international business in the next 12 months, the controllers reported, and 3% of them said that while their companies had no expansion plans, they thought they should. Thirty-seven percent of those doing business overseas were not planning further international expansion. Of the strictly domestic companies, only 14% had plans to go after overseas business, although another 13% either thought they should or were uncertain.

"These findings suggest a wait-and-see attitude," said Susan L. Jayson, director of the IMA controllers council. "The biggest issue seems to be the uncertainty of the dollar and of trends in foreign markets."

Mexico was the most popular target for international expansion, according to the survey. Western Europe and Southeast Asia tied for second place, South America was third and Japan appeared more popular than Canada. Eastern Europe was least attractive as a business target.

Only 30% of the companies that were planning overseas expansion said they already had staff who were familiar with GATT regulations. The other 70% said they relied on outside assistance.

As to which countries were their primary foreign competitors, the respondents listed Western Europe first, followed by Japan, Southeast Asia, Mexico, Canada and South America.

Asked what they saw as their companies' biggest advantage over foreign competitors, the controllers said "quality." They rated technology second, service third and prices fourth.
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Title Annotation:General Agreement on Tariffs and Trade, North American Free Trade Agreement
Publication:Journal of Accountancy
Article Type:Brief Article
Date:Sep 1, 1994
Words:310
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