Paul L. Caron

Thursday, July 18, 2019

Christians & van Apeldoorn: The OECD Inclusive Framework

Allison Christians (McGill) & Laurens van Apeldoorn (Leiden), The OECD Inclusive Framework:

OECDNations across the world are engaged in an ambitious project of tax cooperation that contemplates all participating nations included on an equal footing to implement and further develop mutually agreed baseline rules. The forum for this vision of equal participation in international tax policymaking is the Inclusive Framework, an inter-governmental network convened by the Organisation for Economic Cooperation and Development. This paper demonstrates that the design and build-out of the Inclusive Framework demonstrates institutional learning about the need for inclusivity in authenticating a global tax policy mandate, and that achieving stated goals will be challenging in both logistical and geo-political terms.

It explains why inclusivity is nevertheless critically necessary for the international tax regime, and turns to relevant global governance experience to explore what might be required to achieve it.

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"Equal participation ideally contributes to a more equitable distribution of the benefits and burdens of international cooperation. Procedurally, equal participation may contribute to the fairness and legitimacy of decision-making, and responds to the ideal of the parties being worthy of recognition as equal, self-determining members in the society of states."

Great - and America's in the lead on reform - BUT we gotta keep them honest!

"Many nations in this hall will agree that the world trading system is in dire need of change. For example, countries were admitted to the World Trade Organization that violate every single principle on which the organization is based. While the United States and many other nations play by the rules, these countries use government-run industrial planning and state-owned enterprises to rig the system in their favor. They engage in relentless product dumping, forced technology transfer, and the theft of intellectual property.

The United States lost over 3 million manufacturing jobs, nearly a quarter of all steel jobs, and 60,000 factories after China joined the WTO. And we have racked up $13 trillion in trade deficits over the last two decades.

But those days are over. We will no longer tolerate such abuse. We will not allow our workers to be victimized, our companies to be cheated, and our wealth to be plundered and transferred. America will never apologize for protecting its citizens."

Posted by: Anand Desai | Jul 18, 2019 5:53:58 AM

@ Anand - Very well said. The Great Globalization (i.e., stripping the United States of our industrial base) got its big push in the '90s when Robert Rubin was Treasury Secretary. The S&P 500, particularly Apple and Boeing, were the main drivers. These firms wanted to escape our environmental laws and expand into new markets because the US was tapped out. Manufacturing has gone from roughly 40% of GDP to barely 15%. The US economy today is a black hole of consumption fueled by debt. The problem, as farmers have always known, you must first produce before you consume.

Bottom line is our "trading partners" want to sell to us, not buy from us.

Posted by: Dale W. Spradling PhD, CPA | Jul 18, 2019 7:08:24 AM