At WEF summit, Economy Minister accuses France and Belgium of delaying Brazil’s accession to OECD

RIO DE JANEIRO, BRAZIL – Brazil’s Economy Minister Paulo Guedes said Wednesday (25) that Belgium and France are working to delay Brazil’s entry into the Organization for Economic Cooperation and Development (OECD), which includes the world’s most developed countries.

According to him, with this stance, the two countries want to protect their agricultural sectors from competition from Brazil.

Guedes made the statement in Davos, Switzerland, where he is attending the World Economic Forum. He also said that Europe has “lost Russia” and will also lose Latin America as a trading partner if there is not greater integration between the countries.

“Belgium and France are delaying Brazil’s entry into the OECD because they are protectionist in their agriculture. We told them: accept us before you become irrelevant to us,” Guedes said in a presentation.

The Paris-based OECD is made up of 38 countries, most of them industrialized. It is still referred to as the “club of the rich,” although it includes several emerging economies such as Colombia and Costa Rica.

In January, the organization extended a formal invitation to Brazil and five other countries to begin accession talks.

Guedes said France and Belgium have become commercially “irrelevant” to Brazil. By way of illustration, he cited that Brazil traded US$2 billion annually with France and China at the beginning of the century and now trades US$120 billion annually with China and $7 billion with France.

INTEGRATION

In light of the disruption of global production chains caused by Covid-19 and the war in Ukraine, the Economy Minister reiterated that Brazil is a good option for the supply of food and for investments in green energy such as wind power and solar energy.

He added that the country is very excited despite its late arrival to the “party” of globalization.

The minister also advocated greater integration between Europe and Latin America, saying that without it, Europeans “will be alone.”

“I told the Europeans that they lost Russia and now they will lose Latin America. And they will be alone with themselves if they don’t understand that they have to integrate with those who are left behind,” Guedes said.

“We have been left behind in the past, but we can grow with the new access: food, energy, green economy,” the minister concluded.

He added that all countries are trying to protect jobs by increasing import tariffs, while Brazil is going in the opposite direction, reducing tariffs and becoming more efficient.

ECONOMIC GROWTH AND INFLATION

Guedes also said that Brazil should grow by 2% this year, more than economies considered developed, and estimated that the Brazilian economy will also “get rid” of inflation before most advanced economies.

The minister’s forecast for gross domestic product (GDP) growth this year is higher than the 1.5% announced by the Ministry of Economy last week.

According to him, the country’s growth will be higher this year and inflation will be lower, as the government has promoted fiscal adjustment and curbed spending, while the Central Bank has started raising the key interest rate earlier.

“While the economy grew more [last year], instead of 7% or 8%, we are ahead of the curve, and so we will get rid of inflation before advanced economies and grow more than them,” he said.

On Tuesday (24), the Brazilian Institute of Geography and Statistics (IBGE) reported that the IPCA-15, which is considered a prediction of the country’s official inflation, stood at 0.59% in May, down from the 1.73% rate recorded in April.

Despite the slowdown compared to April, it was the highest index for the month of May since 2016 (0.86%). In twelve months, the index reached a high of 12.20%.

In order to slow down the rise in prices, the Central Bank has been increasing the key interest rate of the economy for 15 months.

Currently, the Selic rate is 12.75% per annum, the highest level in more than five years. The institution’s president, Roberto Campos Neto, believes inflation will peak between April and May.

With information from G1