Tax, trade, and investment conundrum in Asia-Pacific regionalism

This article examines the interplay between taxation, trade, and investment in the context of new Asian regionalism. With the emergence of multilateral initiatives, tax rules have evolved with the potential to conflict with trade and investment treaties, resulting in tax-related disputes. This article argues that tax cooperation and harmonization between Asian nations are crucial for promoting tax certainty and maximizing the benefits of regional integration. To achieve this, it is necessary to align trade, investment, and tax policies in the region, which requires coordinated efforts between countries. One approach is to establish a regional tax framework that includes common rules and standards for taxation, as well as mechanisms for cooperation and coordination among member states. This article highlights the importance of a coherent and consistent international tax framework to prevent double taxation and erode the benefits of trade and investment. The increasing digitalization of the global economy has challenged traditional tax principles, leading to debates on the tax implications of digital transactions. This article proposes the implementation of a comprehensive approach that includes infrastructure development, human capital, and technology transfer to maximize the benefits of regional integration fully. Achieving this alignment ensures that trade and investment are not hindered by tax-related disputes, which can negatively impact economic growth and development. Thus, greater coordination and cooperation among Asian nations, along with the development of a shared vision and long-term strategy for regional integration, are necessary. © 2023 School of Law, City University of Hong Kong.