Brazil determined to quickly join the OECD

If you don’t help us, we’ll go somewhere else. During a trip to Paris, where his teams met with officials from the Organization for Economic Co-operation and Development (OECD), Brazil’s Economy Minister Paulo Guedes showed strength by ardently defending his country’s admission to the organization.

“We are a country that shares the values ​​and principles of democracy,” he stressed. This fall, current President Jair Bolsonaro will attempt to run for a second term, where he must face former President Lula, who currently dominates him mostly in the polls (43% to 26%) in a fight that will pit the far right and left against. . Paulo Guedes stressed the fact that Brazil is the only BRICS member country (Brazil, Russia, India, China and South Africa) that twice voted in the UN against Russia’s aggression against Ukraine.

Liberal democracies and Western civilization are losing ground. Developing countries are growing fast

Given that the GDP of the seven major developing countries (ed. note: BRICS plus Indonesia and Mexico) is higher than the GDP of the industrialized countries of the G7, “liberal democracies and Western civilization are losing ground. Developing countries are developing rapidly. As a result, Brazil’s rapprochement with OECD countries must be judged “by its true value,” he explained at a press briefing at the Brazilian embassy on Tuesday.

“Geopolitically, we all have an interest in securing Brazil in the OECD as quickly as possible,” confirmed a source familiar with the matter. Even if it takes a little time given the many steps to go through.

Historically, this South American country has been close to the Organization since 1998 before being recognized as an important partner there in 2007. In 2017, the country’s candidacy for full integration was officially announced. Last January, along with five other countries, the accession process was officially launched.

About 25 technical committees of the Organization will evaluate various Brazilian policies in the areas of health, work, taxation, combating global warming, exchange rates… These analyzes are to be presented at the OECD ministerial meeting next June. After that, “probably in July,” according to the Brazilian minister’s entourage, Brazil will present an initial memorandum on its policy intentions regarding the recommendations made by the OECD. “During the second semester, the real membership work will begin.”

Tax projects

Lots of items on the table. Starting with tax issues. The Brazilian system is quite far from the practice of the OECD, in particular in transfer pricing matters, which do not follow the arm’s length rule. For four years, work has been carried out with the OECD to achieve convergence of views. A bill to this effect is expected after the presidential elections, which will be held in early October. Similarly, the Brazilian government is working to harmonize its practices with those recommended by the OECD for VAT.

On the vital topic of the future of the planet, in this case the fight against global warming and deforestation, the Brazilian minister assured that Brazil, which is heavily criticized for its environmental policy, intends to take part in international efforts. The country also raised its commitments at COP 26 in Glasgow. Brasilia is considering the creation of a carbon market, a carbon tax and a system of payments for environmental services that, for example, would reward farmers for actions that contribute to the restoration or maintenance of ecosystems.

We want to be part of the climate change solution together with the OECD. We don’t want to be a problem

At the same time, Paulo Guedes assures that the government has tripled the budget to combat illegal logging in the country.

“We want to be part of the climate change solution together with the OECD. We do not want to be a problem,” the minister assured. Thus, the latter appreciated the fact that Brazil has invested heavily in the green economy. In a few years, we have gone from zero to 15% of the energy produced by wind turbines, solar panels or hydraulics. Today, 75% of our energy is clean and we want to be a major player in the transition to a low-carbon economy” in line with the principles defined by the OECD. Obviously, the minister sees no obstacles for Brazil’s entry into a narrow circle of OECD member countries.

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