Law360 Quotes Clete Willems on Impact of Trade Negotiations’ Collapse on Global Tax Talks

Law360 has quoted Akin Gump public law and policy partner Clete Willems in the article “Failed Trade Negotiations Cast Shadow On Global Tax Talks.” Law360 reports that the collapse of a multilateral trade deal as well as an ongoing dispute between the United States and European Union over airline subsidies indicate that current global negotiations on digital taxes could take years to achieve results.

While tax negotiations and trade talks are different, the article says that in the case of negotiations led by the Organization for Economic Cooperation and Development (OECD) in Doha, Qatar, tax and trade overlap, due to a threat by the United States to charge tariffs on countries that impose digital taxes, which Washington argues discriminate against American companies.

Willems said he hopes the OECD tax negotiations prove successful, but added, “If you look at multilateral negotiations in general, they are suffering from a lack of productivity and an inability for multiple parties to reach consensus on just about anything.”

Comparing the trade and tax talks, Willems suggested that the Doha trade round represented an “aspirational” effort to change the rules of international trade. The tax talks, on the other hand, involve a more tangible problem—that is, the efforts in various countries to impose digital services taxes, which Willems said might push countries, especially the United States, to try to make a deal.

While the Trump administration could use the possibility of trade deals as leverage to try to get countries to drop or revise unilateral digital taxes, Willems said, “If you get bilateral deals with these countries, then you can build to [a] multilateral deal.”

As an example, Willems cited the United Kingdom. Having left the European Union and now struggling to reach a trade deal with it, he said the UK “may get desperate for anything with the U.S.” by the end of the year.