Leaders of the G-20 will join together 136 countries this weekend approving an international tax agreementTo make the world’s economy fairer and more productive. The historic agreement will encourage workers to invest and increase workplace productivity. It also ensures that big and successful corporations are not exempted from tax. This deal also shows the strength of diplomacy in enhancing U.S. leadership throughout the globe.

Janet Yellen, Secretary of the Treasury Department, and others reached an agreement to end the race for the bottom in corporate taxation. They established a minimum global tax on all foreign earnings. For over forty years, each country, which included the United States played the self-destructive game of seeking to be the best at attracting and keeping businesses by setting the lowest rate, but other countries quickly followed suit.

Countries would cut their corporate rates. These tax havens allowed the richest businesses around the globe to escape taxes, which in turn hurt the tax base of both the home and tax-home countries. While all countries would be better off working together to maintain a low level of taxes, they each created a bad situation for themselves.

This is what defines a race towards the bottom. There are no losers in a race toward the bottom. The United States’ tax base declined rather than becoming more competitive. The 2017 Tax Cuts and Jobs Act resulted in corporate tax collections that fell to just 1%. Our country was unable to invest the essential ingredients for economic growth, namely infrastructure, education and childcare, as well as research and development.

The end of this destructive cycle is now. A global minimum tax at 15% or less will not incentivize nations to lower their rates. This is because strong enforcement rules prevent them from doing so. Nation’s will be competing on the aspects of their economic strength, which will help to underpin growth for many decades. Are workers skilled and educated in the country? Is their supply chain modern and efficient? A level playing field will make the United States more competitive and encourage all countries to offer more productive and growing terms. U.S.-based businesses will not be the only ones that are subject to foreign earnings minimum taxes.

This deal is also a major diplomatic accomplishment. This agreement is an important step in restoring U.S. leadership at the international level. This agreement was reached after close consultations with allies. It marked a turning point in a previous period of unilateralism. To strengthen the global economy, and to serve the best interests of American workers, the Administration adopted multilateral leadership.

Rarely does 136 countries agree on something, especially when it comes to a complex topic like international corporate taxation. This is a positive example of international cooperation that gives hope to tackle other transnational problems, such as climate change and ending the pandemic. This issue cannot be dealt with without multilateral cooperation. However, this is a sign of hope for other difficult issues.

Although the conclusion of the international tax deal is a significant achievement, Secretary Yellen and other leaders don’t have the luxury to take a victory lap even if it merits one. The stakes are higher than ever, there is still a lot to be done.

If negotiations are followed by action, leadership on the world stage can only be maintained. Importantly, Congress needs to act fast to implement the international minimum tax agreement in the forthcoming reconciliation bill. The landmark foreign policy achievement and investments it supports can flow to the American middle class who will benefit.

—Jacob J. Lew, U.S. Treasury Secretary from 2013-2017