OECD back to the drawing board
by Eric Jackson
During closed-door meetings in Barbados on January 8 and 9, the
Organization for Economic Cooperation and Development (OECD) and
most of the countries on its "tax havens" blacklist agreed on
principles and further study. It now appears that the OECD's demands
will be shelved in their present form.
The OECD has 30 members, most of them industrialized countries,
while the 35 jurisdictions on its blacklist include Panama, a
number of British dependencies, several island nations, Russia
and Israel. The OECD had demanded that these jurisdictions provide
information to its members' tax authorities, without any reciprocal
commitment. This prompted protests, especially from the Caribbean
Community (CARICOM).
Barbadian Prime Minister Owen Arthur, the meetings' host, said
that "there is much common ground" between the OECD and the countries
on its blacklist, but added that "there remain some divergences
on process." The meeting ended with agreement on the three principles
of "transparency, non-discrimination and effective exchange of
information," set up a commission led by Australia and Barbados
to negotiate the details, and raised the possibility of a world
tax forum to set the rules.
All sides declared victory. CARICOM's secretary general, Edwin
Carrington, called the meetings' result "a vindication." The OECD
said that they showed "a way forward in efforts to achieve global
cooperation."
The Center for Freedom and Prosperity, an anti-blacklist effort
sponsored by US conservatives, called the Barbados results "a
victory for those who believe in fiscal sovereignty and financial
privacy." The Heritage Foundation's Dan Mitchell also noted that
the new task force "gives the persecuted low-tax nations a seat
at the negotiating table."
On the other end of the American political spectrum, economist
Dean Baker from the Center for Economic Policy Research argued
that "we have to be able to prevent our corporations from evading
taxes" in order for the United States to implement the sorts of
policies he favors. Baker expressed pessimism about a "truly democratic
body setting the rules," and concluded that "given the option
of rules set by the OECD versus no rules, I go with the OECD rules."
