In Davos this week, Economy Minister Paulo Guedes criticized Belgium and France for “delaying” Brazil’s entry into the OECD, the Organization for Economic Cooperation and Development. Guedes claimed that protectionist policies in these countries would be hampering Brazilian accession. Days later, President Jair Bolsonaro said that Brazil’s participation in the organization is a matter of time and that “in 2 or 3 years Brazil will be in the OECD”.
The lawsuit is old and this conversation is more complicated than our authorities make it seem. It started and gained momentum in previous administrations, always dividing opinion in the country. Brazil has participated in the organization’s meetings since, at least, 1996, becoming part of several programs and committees. In 2012 he was classified as a “Key Partner” of the institution. Years later, in 2015, it signed a Cooperation Agreement with the OECD and, in 2017, requested membership as a full member.
In January 2022, Brazil strengthened this dialogue and was officially invited to start the accession process. It wasn’t the first time, however. In 2007, Brazil had already received this type of onslaught. At the time, however, then-President Luiz Inácio Lula da Silva refused the OECD’s invitation.
The process of incorporation in this type of structure is long and complex, and can take years. It includes adherence to various protocols and codes, in addition to the adoption of measures that involve economic freedom, efficiency of public policies and guarantees of transparency. Therefore, they demand a complete restructuring of the Brazilian State, with the effective consolidation of a reform agenda and, for that, the creation of numerous domestic political agreements.
Participating in the OECD means receiving, from an international point of view, a seal of validation of good practices. It contributes to raising Brazil’s credibility and would help boost competitiveness and the business environment in the country. It would also help to attract investments and raise funds abroad at lower interest rates.
On the other hand, it would require commitments in absolutely sensitive fields, such as the environment, for example. It would also involve a relative limitation of macroeconomic management, since there are specific expectations involving the degree of State interference and practices related to the control of interest rates, exchange rates and taxation of foreign capital. Finally, as everyone knows, participating in the OECD implies giving up, definitively, special treatment and advantages in the WTO. This means not benefiting from longer deadlines to comply with trade agreements, nor having a wider margin to protect national products.
We know, at least since Jean-Paul Sartre, that “hell is other people”. It is true that, around the world, several actors could be interested in holding back the advance of the Brazilian election, as Minister Guedes claims. Despite this, attributing our difficulties in this field to third parties is, at the very least, filtering reality through an absolutely optimistic perspective. In the coming years, the lack of internal consensus will be our biggest challenge in terms of the OECD.
