Opinion: Brazil’s Wavering Commitment to OECD Accession

(Opinion) Brazil’s government has decided not to pay the €5.1 million fee for OECD membership by the end of 2023.

Initially due in April, the organization has allowed an extension until December. Failure to pay by year-end will result in Brazil’s default.

Brazilian diplomacy plans to renegotiate the accession process and cost. The fee, due annually until Brazil joins the OECD, will accumulate if not redefined.

In January 2023, Finance Minister Fernando Haddad indicated possible changes in Brazil’s OECD entry process at the World Economic Forum in Davos.

He suggested Brazil might have its own demands.

Later, in May, Haddad used OECD membership to push Congress to approve a tax law, hinting at possible changes to Brazil’s Council of Fiscal Appeals (Carf) to ease OECD entry.

The formal request for OECD membership began in 2022 under former President Jair Bolsonaro.

The current administration seeks to revise the terms and annual fee, proposing that fewer studies and steps could lower costs.

Brazil’s first interministerial meeting on this subject took place in October. The country has yet to inform the OECD of its intention to renegotiate.

The 2023 budget law, sanctioned by President Luiz Inácio Lula da Silva, allocates R$ 27.4 million for OECD accession.

Has Brazil Lost Interest?

The Brazilian government appears to have lost interest in joining the OECD.

The process has nearly stalled under President Lula’s administration, slowing Brazil’s integration into the global economic and financial system.

This delay contrasts with the government’s stated goal of enhancing Brazil’s international image.

This lack of urgency aligns with advisor Celso Amorim’s August 2022 statement prioritizing Mercosur over OECD.

Economists warn that delaying or canceling OECD membership could hinder Brazil’s economic productivity and growth.

The government’s secretive approach to changing the OECD accession plan raises concerns about transparency.

There’s a lack of clarity about the government’s intentions beyond deviating from the previous administration’s path.

This hesitation was informally discussed by European OECD representatives on November 2, questioning the Brazilian government’s seriousness.

Meanwhile, nations like Peru and Indonesia actively pursue OECD membership, potentially outpacing Brazil’s interest.

This divergent strategy risks leaving Brazil behind in the global economic landscape.

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