Cormann starts working at OECD with double boost from Biden

Mr Rubin’s appointment is a signal that Mr Biden wants to exploit Mr Cormann’s new broom to spur the OECD to become a standard-bearer and standardizer of free market economy and liberal democracy, as strategic competition is intensifying with autocratic regimes like China and Russia.

“The OECD is a club of market economies and democracy around which Biden wants to rally,” said Agatha Kratz, associate director of the Rhodium group in Paris.

A statement from Ballard Partners about Mr Rubin’s departure sent the same signal, saying the OECD was “ready to play a leading international role in the years to come to protect and strengthen the liberal international order” .

“Rubin will help Secretary-General Cormann develop new initiatives and responsibilities for the OECD that build on his 60-year legacy of establishing international rules and standards of transparency, accountability and reciprocity,” said the press release.

“In this time of extraordinary technological change and emerging threats to the rules-based international order, Rubin’s 33 years of experience in United States foreign policy and international diplomacy will be invaluable to the Secretary-General in the implementation of the main OECD initiatives. ”

Mr Biden’s attempt to use the OECD as a tool to promote free market and liberal values ​​underscores his ambition to build coalitions to tackle China, unlike his predecessor’s autonomous approach Donald Trump.

“A lot of [market-economy] the principles are agreed upon in the work of the OECD, and the OECD is already engaging China constructively, ”Ms. Kratz said.

Giving a greater role to the 38 members of the OECD would broaden a French and British initiative aimed at building a group of like-minded democracies around the G7 group, which includes only the United States, Canada, Great Britain , France, Germany, Italy and Japan.

Prime Minister Scott Morrison was one of many Democratic leaders invited to French President Emmanuel Macron’s 2019 G7 meeting, and will attend again when British Prime Minister Boris Johnson hosts the leaders’ summit in Cornwall in two weeks.

The OECD has most of Europe as a member, as well as countries in North and South America and Asia, including Australia. Costa Rica became the 38th member last week.

Supported by a secretariat of 3,300 people in Paris, the OECD is a club of developed countries that collects economic data and exchanges political ideas in areas such as the economy, education, development aid, taxation and climate change.

By ferry: tax, climate

On the tax issue, Mr. Biden is putting the wind in the sails of the OECD. The organization has struggled for years with a fair system of taxation of multinational corporations in all jurisdictions and attempts to navigate a political minefield around the taxation of large tech companies.

G7 finance ministers will meet at the end of the coming week and the media suggest that an agreement, at least among this group, is very close.

The Biden administration advocates a minimum global corporate tax rate of 15% and has indicated it is more ready to discuss digital taxes than Mr. Trump.

This could potentially break the deadlock that prompted Brussels, Paris and London to threaten unilateral taxes on Facebook and Amazon.

“There is movement, there is momentum there. If you had the support of the OECD, it could come down to a minimum tax rate for everyone, uniform tax practices between companies and countries, and increased fairness and transparency, ”said Matthew Snoding. , tax advisor based in Brussels at the public affairs consultancy firm. FIPRA.

He said there was still the prospect of a few countries holding on and pushing it off the rails, especially when it comes to nailing down the details.

“Either you have a global agreement or you don’t. The involvement of the OECD could create an international momentum and help overcome the potential resistance of some EU member states, ”he said.

Mr Cormann will likely be placed at the center of debates on how to tackle climate change.

He said Le Figaro newspaper last week that the overarching goal of the OECD was to see its members “reduce their carbon dioxide emissions as effectively as possible, while preserving access to affordable energy and economic growth.”

He said that setting carbon prices was good in theory but “complicated” in practice. “The best must not become the enemy of the good: do not wait to act using the instruments already available”, he declared.

“Alternatives are possible, such as direct public investment, subsidy systems, support for innovation or binding standards. Every national effort must help reduce global emissions, not shift the problem. That said, the OECD will continue to play its role in the discussions on a global carbon price. “

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