Policy Research Domains (Major Policy Research Domains) III. Formulating Japan's Strategy in Response to Globalization and Deepening Economic Interdependence in Asia

Trade Agreements and Tax Systems

Project Leader/Sub-Leader


KOTERA Akira Faculty Fellow



MATSUMOTO Kayo Consulting Fellow



2009 - 2010

Since trade agreements (i.e. WTO Agreements, economic partnership agreements, international investment agreements, etc.) address trade measures, references to taxation often do not specify what aspects of taxation and tax measures are to be regulated. However, it has become globally recognized that trade agreements have an important regulatory impact on taxation.

The importance of the relationship between trade agreements and taxation becomes evident when a trade agreement is objectively interpreted by a third party. A good example of this is the 1980s dispute concerning the grading of alcoholic beverages that was referred to the General Agreement on Tariffs and Trade (GATT) dispute settlement procedures. The GATT ruling against the established grading practice clearly revealed how GATT regulations can impact domestic taxation. The growing coverage of trade agreements creates increased opportunities for this type of problem.

This problem is further complicated by the existence of bilateral tax agreements. Trade agreements frequently contain provisions for exemption from certain matters covered by tax agreements (as in the case of the General Agreement on Trade in Services [GATS] and Japan's economic partnership agreements). When exemptions are not stipulated, a series of other issues may arise, which go beyond how to modify domestic measures, how to make adjustments between the provisions contained in trade agreements and tax agreements. One of these issues is how to coordinate the dispute settlement procedures of the two types of agreements.

With these issues in mind, small-scale study sessions will be organized with the participation of legal scholars and specialists specializing in the fields of international law, international economic law, tax laws, EU laws, etc. On occasion, researchers from the field of economics will also join the sessions.

October 14, 2008 - March 31, 2011

Major Research Results


RIETI Discussion Papers


RIETI Discussion Papers

RIETI Policy Discussion Papers