Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.
Sign up for our Technology newsletter
You must correct or enter the following before you can sign up:
Thank You!
Law360 (May 26, 2020, 8:43 PM EDT ) Governments have so far deployed $9 trillion against the global coronavirus pandemic, but additional spending — to levels unseen since the aftermath of World War II — may be needed to pull economies out of the crisis, the OECD's top official warned.
Ángel Gurría, secretary-general of the Organization for Economic Cooperation and Development, said during a webinar Friday that upcoming projections for the Paris-based body's advanced-economy members would likely prove dire. The event was hosted by the Inter-American Dialogue and focused on the pandemic's impact on Latin American countries and the global economy.
"Unfortunately, there's going to be a sea of red in our projections," which the OECD is scheduled to release on June 10, Gurría said. "It's not going to look good," he added.
The secretary-general pointed to the U.S. rescue of postwar western Europe in predicting that the equivalent of "several Marshall Plans" would be needed to bolster economies amid the historic pandemic.
"You've talked about $8 trillion, $9 trillion that have been thrown at the thing — it may be necessary to do more," Gurría told the webinar's moderator.
Gurría was asked by the moderator about OECD-led efforts to establish an international standard for countries seeking to tax digital business activities. Nearly 140 jurisdictions that make up the organization's inclusive framework on base erosion and profit shifting are working toward a two-pillar solution on digital taxation, with the intention of reaching agreement by a Dec. 31 deadline.
"We are on track, but we wanted to produce the 'blueprint' by the first and second of July in Berlin," Gurría said, referring to the original schedule for introducing the twin proposals. That has been postponed due to the pandemic until a November meeting in Saudi Arabia of leaders of the Group of 20 economic powers.
He cautioned that without a global agreement, about 40 to 50 of the jurisdictions engaged in the talks will feel the "political imperative" to undertake their own domestic digital taxes. Such actions could irritate the U.S., Gurría said, alluding to threats by President Donald Trump's administration to impose retaliatory tariffs on France after it enacted a digital services tax that Washington considers discriminatory against American tech companies. The two countries reached a truce in January as the OECD talks continued.
Any risk of a "trade war," he said, would be especially severe as the world's economies struggle to deal with the pandemic.
Gurría's comments came a day after OECD tax chief Pascal Saint-Amans urged U.S. businesses not to oppose or try to delay the digital tax project, out of their own self-interest.
Without multilateralism, "countries will move unilaterally, and at a time of nationalism, of selfishness by the countries, you may be the victim of bad actions," Saint-Amans said Thursday during a webinar organized by a Washington, D.C., research group.
--Additional reporting by Alex M. Parker. Editing by John Oudens.
Editor's note: This story replaces a previously published version. Please use this version for citation purposes.
For a reprint of this article, please contact reprints@law360.com.
