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Taxation is not normally considered part of trade policy, yet it is an obvious companion to trade. National tax structures, like tariff rates, form important incentives for companies deciding not just what to produce where, but where to site employees and intellectual content, and where to claim profits.

As global financial flows have ballooned in the era of post-Cold War globalization, a number of countries have tax policies to attract investment or incentivize multinational corporations to move their headquarters. As a result, scholars have noted an accelerating decline in the effective rate of tax the United States collects from multinational corporations. Former Treasury Department official and Council on Foreign Relations scholar Brad Setser why this is so: “A multinational corporation can route its global sales through Ireland, pay royalties to its Dutch subsidiary and then funnel income to its Bermudian subsidiary—taking advantage of Bermuda’s corporate tax rate of zero.”

Taxation issues may seem extremely wonky for presidential politics, but the theme of corporations and foreign entities combining to deprive the U.S. Treasury of revenue has been picked up by candidates on both the left and center. While candidates like Warren and Sanders have advocated for corporate tax policy reform, and often talk about tax evasion in the context of international trade and investment, others have picked up on proposals for international negotiation and reform. Warren’s “Real Corporate Profits Tax” is a proposal to “close loopholes that let big corporations pay less,” while Sanders’s “Income Inequality Tax Plan” proposes “taxes on companies with exorbitant pay gaps between their executives and typical workers.”

Both O’Rourke and Warren have connected their proposals to a collaborative effort of more than 130 countries and jurisdictions, including the United States, to provide international rules and policy instruments to address tax avoidance and ensure that corporate profits are taxed where they are generated. The (base erosion and profit shifting) of the Organisation for Economic Co-operation and Development (OECD) and Group of 20 aims to restrain strategies that multinational companies use to exploit mismatches in national tax laws in order to avoid paying taxes. These cost countries an estimated $100–240 billion USD annually in lost tax revenue, according to the OECD.

O’Rourke’s trade plan called for the United States to commit to the BEPS framework, while Warren’s plan would require that any country signing a trade agreement with the United States participate in it.