Brazil invited to join OECD as full member

On January 25th, the Council of the Organization for Economic Cooperation and Development (OECD) sent a letter of invitation to the Brazilian government thus starting discussions regarding Brazil's path to becoming a full member of the exclusive international association, which gathers the world's most industrialized economies.

Headquartered in Paris, OECD was founded in 1961 with the goal of stimulating global economic progress and world trade. The long-standing forum mostly gathers high-income economies with lofty Human Development Index (HDI) scores to compare policy experiences, seek answers to common problems, identify best practices and coordinate national and international policies between its members.

After almost a decade of cooperation, Brazil became a key partner of the organization in 2007, in light of an OECD resolution to strengthen ties with the country, as well as with China, India, Indonesia and South Africa, through a program of enhanced engagement.  

In 2017, Brazil formally expressed its interest in becoming a full member of the OECD and has actively sought to adhere to the organization’s normative instruments – so far, the country has adhered to 103 of the its 251 norms. 

“This process to access the OECD requires from Brazil, precisely, this convergence on tax reform, financial liberation and international service agreements. Everything we have already been doing.”, stated Brazil’s Minister of Economy, Paulo Guedes. “[The invitation] is a recognition of our agenda and, at the same time, a commitment to remain on this track of modernization reforms.”, he added. 

Mr. Guedes additionally pointed out that Brazil is the only country which is set to be a member of three major institutional bodies focusing on the global economy – G-20, BRICS and now, potentially, OECD. 
 
Nevertheless, Brazil's desire to join OECD was also met with skepticism by some market observers. According to Vinicius de Carvalho, founding partner of renowned antitrust law firm VMCA – Vinicius Marques de Carvalho Advogados and professor of commercial law at Universidade de São Paulo (USP), the organization has been focusing on issues which potential members have limited powers to influence and which places a geoeconomical agenda over geopolitical priorities. Mr. De Carvalho also stated that joining OECD will not be an automatic guarantee of economic development, citing Chile’s crisis following its entrance to the organization in 2009.  

“The question which must be asked is if the OECD is still neoliberal. 40% of the block's taxes are related to income and assets. In Brazil this figure is 23%. OECD is a 'think thank' which challenges neoliberalism. The association raises discussions such as the impact of technologies on democracy. If there is no global governance, this ends up generating a negative impact, via authoritarianism or extreme populism, which, in the end, impacts the market economy.”, he concluded.  

By: Ana Luisa Ferrari