Less than a week after President Donald Trump announced that the U.S. would pull out of the Paris Climate Accord, the U.S. government abstained from signing another multilateral agreement in the French capital meant to combat tax evasion by companies operating in multiple countries.

The agreement, formed in conjunction with the Paris-based Organization of Economic Co-operation and Development, sought to stymie profit-shifting by multinational firms, a practice that costs the U.S. government an estimated $100 billion in foregone tax revenues each year. The OECD pegs the global annual tax loss at up to $240 billion.

On Wednesday, 68 countries signed the agreement to prevent a practice known as “treaty shopping,” in which a company with operations abroad attempts to capitalize on bilateral tax accords between the nation in which it’s based and any foreign country where it also operates. The U.S., which has been involved in the pact’s development, was not among the signatories.

“China and India were proud signers on this, and the U.S. was not even present at the meeting,” said Clark Gascoigne, the deputy director of the Financial Accountability and Corporate Transparency (FACT) Coalition. The American government, he said, was “deciding to go at it alone and on our own. We are continuing to abdicate our leadership on the global stage.”

Still, OECD spokesman Pascal Saint-Amans said the U.S. decision, far from being new or unique to the current administration, was “no surprise,” as the U.S. already had a “robust treaty network” with other nations.

But a key part of the agreement is the “principal purposes test,” which seeks to keep companies from making it appear as if a large amount of their operations is taking place in a country with laxer tax laws, when in reality the firm’s operations may be limited to a shell company or similar mechanism. The U.S. has its own version, the “limitation on benefits” rule, which is more quantitative, while the principal purposes test gives the taxing authority the power to determine whether firms are abusing tax laws.

One company that has come under scrutiny for that kind of abuse is Caterpillar Inc., which spent $1.26 million on federal lobbying efforts at least in part related to the OECD project to clamp down on the practice in the first three months of this year. An April 2014 Senate report, which advocated for the OECD initiative, noted that Caterpillar had shifted 85 percent of its profits to Switzerland, a notorious tax haven, “after the adoption of a Swiss tax strategy in 1999… without making any real changes in its business operations.”

“The company’s U.S. presence as a whole is far larger than its Swiss presence,” stated the report, which cited over 150,000 pages of documents from both the company and its auditor at the time, PricewaterhouseCoopers. “Caterpillar’s worldwide headquarters has long been in Peoria, Illinois, and all of its most senior executives are located there. Of its 118,500 employees worldwide, about 52,000, or nearly half, work in the United States, while only 400 employees, less than one-half of one percent, work in Switzerland. Of its 125 manufacturing facilities worldwide, 54 are in the United States, while none are located in Switzerland.”

RTR23WXQ Caterpillar Inc. spent $1.26 million in federal lobbying at least in part on the OECD agreement on base erosion and profit shifting in the first quarter of this year. Above, a bulldozer was photographed on a railcar outside the Caterpillar plant in Peoria, Illinois, where the firm is headquartered, Jan. 26, 2009. Photo: Reuters

A Caterpillar spokesperson declined to comment on the company’s position on the OECD agreement, as did a spokesperson for the organization Financial Executives International, which spent $25,674 on federal lobbying related at least partially to the main objective of the OECD agreement in the first quarter of this year and which called the pact “a directed attack on U.S. multinationals and their tax-planning proficiency.” International Business Machines Corp., which spent $1.13 million on federal lobbying at least in part on the project in the first three months of 2017, and the National Foreign Trade Council, which spent $65,000 over the same period, did not respond to requests for comment from International Business Times. (Lobbying files list issues on which companies and organizations attempt to sway legislation, not their positions on that legislation.)

The Business Roundtable — an advocacy group representing chief executives of large corporations, which counts Caterpillar’s CEO as a member — spent $2.31 million in federal lobbying on issues that included the OECD initiative in the first quarter of 2017. Although the group did not respond to IBT questions, the chair of its Tax and Fiscal Policy Committee, EY chief executive Mark Weinberger, wrote a letter to former Treasury Secretary Jack Lew in April 2016 urging the Obama administration to “accept” the OECD project. Weinberger cited compliance burdens in the event the U.S. did not embrace the agreement.

Sempra Energy, which a federal lobbying document shows spent $470,000 in lobbying at least in part on the issue in the first three months of 2017, said in a statement that it “was not active in lobbying against” the agreement.

RTR4STLG Sempra Energy, a natural gas utilities holding company, spent nearly half a million dollars in lobbying efforts at the federal level at least in part related to the OECD agreement on corporate tax treaties. Above, the Sempra Energy building was photographed in San Diego, March 10, 2015. Photo: Reuters

Sempra was likely not alone. As in the case of the climate accord, of the American multinational firms and organizations that collectively spent millions of dollars in lobbying efforts related to the OECD project in the first quarter, some actually favored the agreement. They had good reason to, according to experts. In addition to reining in efforts to evade corporate taxes, the OECD sought to codify or streamline corporate tax accords around the globe, simplifying compliance for firms with global operations.

Saint-Amans, of the OECD, said he believed the U.S. business community was “sad” about America’s failure to sign on. Tax expert Lawrence Zlatkin, writing for Bloomberg BNA, noted that “with the rest of the world moving along” with the agreement, “we should expect reaction, potential double taxation and other adverse consequences.” Gascoigne, of the FACT Coalition, pointed out that, absent the U.S. signing the OECD agreement, the American government “will have to go around with countries one by one to negotiate treaties,” a practice he said “diverts business resources away from productive investments and into tax planning shenanigans.”

The missing U.S. signature also affects the American government’s reputation as a global leader, as well as ordinary Americans who “are footing the bill for this,” Gascoigne said.