While Africa and Latin America have seized leadership roles in shaping the UN Framework Convention on International Tax Cooperation, Asia remains conspicuously absent from global tax governance debates despite generating the majority of world GDP growth. As mega free trade agreements like RCEP and CPTPP reshape regional commerce, Asia’s failure to match its trade prowess with coordinated tax policy risks deepening inequality and weakening its bargaining power in an increasingly interconnected global economy.
In the recent decade, the Asia-Pacific has unlocked new opportunities for the integration of Regional Free Trade Agreements (FTAs). While the multilateral trading system has faced significant challenges since the Doha Round stalled, the Asia-Pacific Region, specifically East Asia and Southeast Asia (ASEAN), has advanced its regional trade agenda unabated. Concurrently, the international tax agenda has reached its height through the development of OECD BEPS 2.0 and the ongoing UN Tax Framework Convention. Unfortunately, the Asia-Pacific region has not yet fully seized this momentum, despite clear signals that these developments warrant close observation and proactive engagement, especially to advance the integration of Asia’s regional tax affairs.
Without the contestation over the power and influence of the US and China, linked to the relationship between RCEP and CPTPP, Asia’s regional integration has fortunately become interconnected, mutually reinforcing soft-law and hard-law frameworks that have shaped contemporary trade and investment agreements. Yet as trade and investment become a mainstream element of the regional economic agenda, tax concerns continue to lag. Over the past decade, international tax reform has progressively influenced the global political economy, but Asia’s regionalism remains primarily anchored in trade and investment. Given the inevitable interconnection among trade, investment, and tax, Asia’s evolving economic architecture must consider regional tax matters.
At the international level, the emerging UN Tax Framework Convention, under construction from 2025 to 2027, marks a crucial development in the global tax order. This current situation is unusual, as it brings two major institutions, the OECD and the UN, into direct engagement over the future of global tax governance. Fundamentally, the debate over global tax battles between the OECD and the UN was shaped by the former’s initiatives, namely BEPS 1.0 and, more recently, BEPS 2.0 or the Global Tax Deal, whose operation does not necessarily reflect the priorities of Global South countries.
As a result, culminating in late 2023, significant attention has been directed toward global tax cooperation, particularly through the United Nations General Assembly (UNGA), which the African group pioneered. In this context, the UNGA adopted Resolution 78/2023, which endorsed a draft resolution for a UN Framework Convention on International Tax Cooperation. Given this circumstance, regional approaches now offer a necessary paradigm for global tax cooperation, with Africa serving as a leader.
Moreover, 2023 marked the first Latin American and Caribbean summit on an inclusive, sustainable, and equitable global tax order, which emphasised rethinking the means of achieving international tax cooperation and the Sustainable Development Goals (SDGs). In upholding the SDG mandate, regionalism is also taken into account in advancing policy coherence for taxation, regional cooperation, and economic development. So, the question arises about Asia’s political standing, because the African and Latin American regions have already asserted their positions in global tax cooperation.
Today, the Asia-Pacific share of global GDP growth has surpassed that of Africa and Latin America combined. Unlike the African and Latin American regions, Asia’s economic miracle story and diverse economic style provide sufficient confidence to sustain its economic growth, primarily through trade and investment (FDI) agendas, while overlooking tax affairs. However, an over-reliance on generating growth solely through this trade and investment regime creates a potential pitfall: it risks generating inequitable growth, which could, in turn, lead to rising inequality both among and within countries.
One variable in Asia’s regional tax architecture delineates this reality: the expanding network of Bilateral Tax Treaties (BTTs) or Double Tax Agreements (DTAs). Hand in hand with Bilateral Investment Treaties (BITs), the tax treaty regime has fundamentally changed the Asian economic and business framework, specifically global supply chain landscapes. Indeed, the increase in DTAs has had a profound positive impact on trade performance, including in emerging markets such as Vietnam. However, within ASEAN, tax incentives are naturally driving competition among member states, a situation that instead challenges the commitment to ASEAN economic integration. It is largely attributable to the collectively insufficient policy consideration of double taxation relief and agreements among ASEAN member states.
One of the striking variables in the international tax cooperation is that, despite a fragmented geopolitical and geoeconomic landscape, global tax affairs still foster interconnected collaboration between nation-states. In other words, every country, under uncertain circumstances, needs to ensure its rational fiscal budget, which is intertwined with those of other states. From the perspective of institutional tax and trade relations, the European Union serves as a strong example in international taxation, as its powers are directed at preserving the EU’s four freedoms and thus enforcing the common European single market. So, framing this through the lens of Asia’s messy inward multilateral trade competition and tomorrow’s global tax governance in regionalism, both prospects offer measurable, concrete reasons to glue Asia’s regional economic power dynamics.
Within this background of inequitable growth concerns & regional power dynamics, Asia’s tax regional cooperation will play a pivotal role, ranging from representing Asia within the global institutional tax landscape to coordinating national tax, trade, and investment agendas.
While there is initiative for a regional tax agenda in Asia, including the recently established Asia Pacific Tax Hub by the Asian Development Bank, Asia’s attempts at progressive tax coordination & cooperation remain limited. Given this context, ASEAN, at the forefront of Asia’s multilateralism, appears to be the most viable platform for initiating broader, more progressive tax cooperation in the region, specifically through the ASEAN Economic Community (AEC) Strategic Plan 2026–2030.
So, both the rise of Asia’s key mega FTAs, RCEP & CPTPP, and global tax multilateralism, with the ongoing UN Tax Framework Convention, create a powerful initiative. To capitalise on this momentum, the Asia region should rethink its priorities for tax matters, moving beyond professional and technical groups to establish a politically empowered, unified, policy-making institution that ensures these efforts strengthen regional power dynamics and promote equitable economic growth.
Andi Mohammad Ilham is a Graduate of the School of Government and International Relations, Griffith University. He is also a Tax Researcher at MMStax Consulting, Indonesia. His research area focuses on the International Political Economy of Global Tax Governance.
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