Transfer pricing refers to how prices are set for goods and services exchanged between entities within the same corporate group, typically multinational corporations. The goal is to ensure these transactions are conducted at arm's length, reflecting market conditions, to prevent tax evasion and promote fair competition. Photo: Yuri Arcurs / Mostphotos

On May 31 2024, Lawrence Williams successfully defended his dissertation titled "Transfer Pricing and the World Trade Organization Agreement: The Compatibility of Transfer Pricing Principles Contained in Bilateral and Multilateral Tax Treaties with the WTO Non-Discrimination Norms." The opponent for the defense was Professor Mattias Dahlberg from Uppsala University.

Williams' dissertation examines how bilateral and multilateral tax treaties function within the framework of international trade law and transfer pricing. Specifically, it investigates whether WTO members applying transfer pricing principles found in bilateral tax treaties based on the OECD Model Tax Convention and the "Multilateral Convention to Implement Amount A of Pillar One" (OECD MLC) do so in compliance with their WTO obligations.

International trade law and transfer pricing are pivotal components of the global economy. Williams' research highlights how these two legal domains interact, overlap, and sometimes conflict with each other. This understanding is crucial in a globalized world where nations often need to adhere to multiple international agreements simultaneously.

Compatibility Challenges and Lack of Coordination

Williams' study reveals that transfer pricing principles, even though not always explicitly excluded from the scope of WTO agreements, can lead to compatibility issues between international trade law and transfer pricing. Through an in-depth analysis, the dissertation identifies how these two legal fields coordinate and how their overlaps and conflicts can be understood and managed.

A central conclusion is that there is a lack of horizontal coordination between international trade law and transfer pricing during both the drafting and implementation stages of the OECD MLC. Despite identifying overlaps and conflicts, the dissertation concludes that these are justified and do not result in irreconcilable treaty conflicts. However, Williams emphasizes that this area should be a focus for policymakers and organizations such as the OECD and WTO when proposing future reforms in international law.

Paving the Way for Fair and Coordinated Rules in Global Trade

The findings of Williams' research are significant for various stakeholders in international law and global trade. For policymakers, the dissertation provides valuable insights that can help in crafting more coordinated and equitable laws and regulations, thereby minimizing potential conflicts between different international agreements. For academics, the research offers a deeper understanding of how various legal domains interact and influence each other, which can inspire further research and discussion in the field.

Williams' research contributes to the development of more predictable and fair rules for international trade and taxation. This is essential for the effective and just application of international law and for ensuring that global trade and tax systems operate harmoniously. His findings offer valuable insights for policymakers, academics, and international organizations, guiding them towards more coordinated and transparent reforms. 
By addressing the complexities and potential conflicts between trade and tax treaties, Williams' work paves the way for a more integrated approach to international regulation, fostering a stable and equitable global economic environment.

Read the thesis with Open Access in DiVA
 

Text: Natalie Oliwsson