The New Poor at Our Gates: Global Justice Implications for International Trade and Tax Law

Abstract

The Article explains why international trade and tax arrangements should advance global wealth redistribution in a world of enhanced economic integration. Despite the indisputable importance of global poverty and inequality, contemporary political philosophy stagnates over the controversy of whether distributive justice obligations should extend beyond the political framework of the nation state. This stagnation results from the difficulty of reconciling liberal impartiality with notions of state sovereignty and accountability. The Article offers an alternative approach that bypasses the controversy of the current debate. It argues that international trade results in relational distributive duties when domestic parties engage in transactions with foreign parties that suffer from an endowed vulnerability - such as extreme poverty prevalent in the developing world. These relational duties differ from "traditional" distributive claims because they rely on actual economic relationships, rather than upon hypothetical social-contract scenarios. In a competitive market, private parties cannot address these relational distributive duties by themselves, because doing so would put them at a competitive disadvantage. This Article therefore argues that the only collective-action solution to this systemic problem in the current global political setting is wealth transfers among states.

The Article proceeds to suggest some policy implications of this normative analysis in the field of international tax law. It points out that the allocation of taxing rights is a form of wealth allocation that divides globalization's revenue-proceeds among nations. As such, tax allocation arrangements should help "correct" international trade relationships that fail to meet relational distributive standards. This discussion stresses a point frequently neglected in both the tax and political philosophy literatures - that real-world attempts to promote a more just distribution of global wealth could greatly benefit from integrating distributive considerations into tax allocation arrangements.

Keywords: Global distributive justice, relational duties, international trade, international taxation, fair trade, global inequality, global poverty

JEL Classification: D63, E62, H23, H25, K34, F10, F40, H87, K33, F02, F23, P45