CAMBRIDGE, Mass. (Project Syndicate)—On June 5, the world’s leading economies announced an agreement that will bolster their ability to raise taxes on global corporations. The agreement still needs formal approval from a wider set of countries, and there remain many details to be worked out for it to be effective. Nonetheless, it would not be far-fetched to describe the deal as historic.

The G-7 agreement has two planks. First, it proposes a global minimum tax of 15% on the largest corporations. Second, a portion of these corporations’ global profits will be clawed back to countries where they do business, regardless of the location of their physical headquarters.

Rewriting the rules of globalization

These objectives are as clear an indication as any that hyper-globalization’s rules—under which countries must compete to offer global corporations ever-sweeter deals—are being rewritten. Until very recently, it was…

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