As the country tackles fallout from the Trump administration’s retreat from the international order, experts question whether this will accelerate global fragmentation. Pedro Abramovay, Vice President of Programs at Open Society Foundations, argues that this shift could paradoxically allow stronger international cooperation over global taxation, particularly benefiting Africa and the Global South.
The Trump administration has dramatically retreated from the international order that it contributed to the existence of the United States. It abandoned the Paris Climate Agreement, the World Health Organization, and the United Nations Human Rights Council. Funds have been suspended for the World Trade Organization and the United Nations Relief Agency for Palestinian Refugees. It rejected the Sustainable Development Goals and waived its legal commitment under the 1951 Refugee Convention. And it is currently reviewing all international treaties that are parties to determine whether or not the assistance should be withdrawn.
It is often assumed that “America First” will accelerate the fragmentation of already biased multilateral order. But can this collapse also open up new possibilities for expanding international cooperation? The absence of the United States may eliminate one of the major spoilers of past attempts at international cooperation and pave the way for a more ambitious and effective global agreement. Certainly, there are probably other states that were spoilers in multilateral negotiations, but there could be problems where actual progress could be achieved without the US at the table.
The International Tax Agenda is an example.
Multinationals are currently escheating at least $240 billion in taxes per year. These inequality are exacerbated by the globalization of financial capital. Financial capital is depriving the state of the financial resources needed to eradicate poverty and invest in public goods, as the capabilities of the corporation and the very wealthy people avoid taxation by moving profits into tax havens.
The Organization for Economic Cooperation and Development led an effort that culminated in a 2021 global minimum corporate tax agreement, an agreement that President Donald Trump retracted from just hours after returning to the White House. Nevertheless, the success of the OECD was diluted from what Africans and other global Southern governments wanted due to resistance from the wealthy member states of the OECD. Experts proposed a global minimum tax of 25%, but the OECD only agreed to it 15%. That income was rare in countries that had arisen in countries that needed to meet public funds, as the commitment to divide tax rights between citizens was also eroded in favor of already wealthy countries.
Last year, the majority of countries approved parameters of the new World Tax Treaty, which aimed to take a more ambitious approach (though the US and other high-income countries voted against it). Although it is moving forward again without US participation in hopes of implementing the treaty by the end of 2027, parallel efforts are being made at the national level in Brazil, where the government hopes to remove income tax burdens from the lower middle classes and move them to billionaires.
For the first time last year, discussions took place over the creation of a global minimum tax on billionaires under Brazil’s G20 presidency. The final declaration also included the idea of taxing the super wealthy. Their wealth – particularly those associated with big technology, are generated worldwide, but are tax-free because of their ability to store wealth offshore under a layer of secrets. Furthermore, the companies they own are facing minimal taxation due to outdated international rules, which have developed over a century ago, limiting the Global South’s ability to effectively tax these companies and their billionaires. The proposed UN Tax Convention provides a valuable tool for taxing digital services, particularly digital services provided by Big Tech. More robust tax rates for the ultra-rich people, and globally coordinated rules for technology providers in the exporting country, as well as ensuring that the wealth generated in that country pays taxes in that country is not only achievable for global tax justice, but also the basis for defending democracy.
Decades of neoliberalism have left a government that has no financial space to stick the nation out of the box, dismantle the public sector and invest in public infrastructure, healthcare and education. If people don’t believe their democracy has the ability to change their lives for the better, their support for democracy will eventually collapse. Tax reform not only boosts public funding, but also strengthens the nation’s capacity to influence social transformation, which is essential to maintain democracy.
Developments in international tax reform may announce a more democratic multilateral order led by the global South, addressing the needs of the majority of the world.
This year, South Africa is serving as the G20 presidency. Even before Trump’s hostility with South Africa burned, there were whispers that the US might withdraw from the group.
It can be argued that it is irrelevant if the US does not advance tax reform progress. What is the world’s largest economyless international tax treaty? Wouldn’t that lead to the race to the bottom? While this debate could be made in multilateral agreements on labor standards and environmental regulations, it should be noted that tax havens, including $177 billion lost by the Big Spoilers themselves, have almost $500 billion in taxes lost annually. Negotiations on international tax treaties aim to create a more comprehensive and equitable framework for a more comprehensive and equitable framework to benefit all countries.
A multilateral approach to international tax reform is not intended to be hostile to the US and should not be harmful to the US economy, but negotiations must continue even if the US is not at the table.
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Today’s most challenging issues are crossing borders. The surge in populist nationalism, the deeper climate crisis, the instability of new technologies, and the growing domestic and domestic inequality all call for a multilateral approach. The absence of the US from the International Fora is undoubtedly a barrier, but it is also an opportunity to advance multilateral solutions, particularly for the people and planets led by the Global South. These countries can lead the way with advances in the international tax reform agenda.
Prior to his tenure at the Open Society, Pedro Abramovay held a series of important posts within Brazil’s Ministry of Justice. He was a special advisor to the Minister of Justice from 2004 to 2006, Secretary of Legislative Affairs from 2007 to 2010, and Secretary of Attorneys from 2010. 500,000 guns from the circulation. He worked on reforming the Brazilian prison system and created a blog-driven drafting process for Internet freedom laws.
Abramovay was also the campaign director for Avaaz, for campaigning against corruption and for promoting human rights in Latin America, and was a professor at the Riodeação Getulio Vargas Law of Law School of Law School of Law.
Abramobay studied law from the University of Sao Paulo Law School, earned a Masters in Constitution from the University of Brasilia and a PhD in Politics from the University of Rio de Janeiro.
