When ministers of the Organisation for Economic Co-operation and Development meet in Paris this week, the US can expect some tough questions about its recent move to scale back the body's plan for a worldwide crackdown on tax havens. But instead of berating Washington, other governments should use the opportunity to re-examine the project. There are several reasons for doing so.
More precision is needed about the plan's focus and objectives.
However, questions remain about exactly what that means in practice. Paul O'Neill, US treasury secretary, says the plan is an attack on governments' sovereign right to determine their own tax rates and systems. The OECD denies that, saying it wants only to encourage good tax practices. Nonetheless, it is threatening sanctions against uncooperative jurisdictions whose tax systems favour offshore investors. Whether such sanctions would comply with World Trade Organisation rules is uncertain.