LatinNews Daily - 26 January 2022

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BRAZIL: Moving closer to OECD membership

On 25 January, Brazil was invited to formally begin the accession process to the Organisation for Economic Co-operation and Development (OECD). 

Analysis:

The OECD council decided yesterday to open accession discussions with Brazil and five other candidates to OECD membership – these include Peru and Argentina in Latin America (as well as Bulgaria, Croatia, and Romania). This has been hailed as a “historic” step by both the Peruvian and Brazilian governments. In Brazil, the accession to OECD membership was declared a foreign policy priority by the administration led by President Jair Bolsonaro – although membership comes with some conditions which may force a realignment of some of the Bolsonaro government’s policies, notably on the environment. 

  • “Brazil is fully in line with the OECD’s core values, [...] such as upholding free market principles, strengthening democracy, economic modernisation, and the protection of the environment and human rights,” Brazil’s foreign and economy ministries said yesterday in a joint statement also signed by the chief-of-staff’s office. 
  • Economy Minister Paulo Guedes hailed the formal beginning of the accession process as “recognition that we are a great nation,” and added that Brazil will be the only country at the intersection of the G20, the BRICS group of developing nations (which also comprises China, Russia, India and South Africa), and the OECD. 
  • The government says that Brazil has already adhered to 103 of the OECD’s 251 normative instruments. According to Guedes, the recent approval of a law regulating the foreign exchange market, which was sanctioned in December, was key to advancing Brazil’s accession process; the economy minister said he last week sent the OECD a letter highlighting the new law and pledging to zero the tax on financial operations (IOF) for international transactions. 

Looking Ahead: The OECD council may have launched formal discussions on accession, but there is still a way to go before Brazil – or Argentina, or Peru – achieve full membership. The negotiations can take three to five years and membership must be unanimously approved by the OECD’s 38 members. Some members may resist Brazil’s membership on environmental grounds, although this could change if Bolsonaro is voted out of office later this year and a more environmentally committed administration takes over. 

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