In a surprising break from decades of protectionism regarding its public procurement markets, Brazil has announced that it will seek to join the World Trade Organization (WTO) Government Procurement Agreement (GPA). Accession to the GPA (see J. Heilman Grier, The WTO Government Procurement Agreement (Djaghe 2020)) could open Brazil’s public procurement markets, which have been estimated to total over US$150 billion annually, to competition from other GPA members; it would also give Brazilian exporters access to the public markets in other GPA members, including the United States. If it overcomes concerns in Brazilian industry and succeeds in acceding (China’s accession has been pending for over a decade), Brazil would be one of the first major low-cost producers to join the GPA, which could cause shifts in public procurement markets worldwide.
George Washington University Law School LLM candidate and Brazilian attorney Ricardo Campello commented:
The Brazilian Minister of Economy, Mr. Paulo Guedes, announced yesterday (January 21, 2020) during the World Economic Forum in Davos that Brazil will formally request to join the GPA as a full member (since 2017, Brazil has had an “observer” status). The announcement was reported in Brazil`s biggest newspaper for corporate matters, called “Valor Econômico” (link to the article in Portuguese). As reported, the request is being prepared and can be submitted soon, maybe even before the end of the Forum. Joining the GPA will help Brazil to incorporate best procurement practices and will also be a full attack against corruption, said Mr. Guedes. When asked about the possible impact to local companies, Mr. Guedes answered that Brazil can no longer have this type of mentality which only contributes to the exploitation of Brazilian consumers and taxpayer funds by local companies. In this regard, it`s mentioned that the fact that Brazil will soon no longer be able to have price preferences in favor of local suppliers against European companies, due to the free-trade agreement signed between Mercosur and the European Union, contributed to the decision to join the GPA. This is the first time Brazil`s government officials have expressed the country`s intention to join the GPA as a full member. As Brazil`s Senate is currently discussing the country`s new procurement system, it would not hurt to consider the GPA’s requirements in such discussions.
Robert Anderson, formerly Senior Counsellor and Team Leader for Government Procurement at the World Trade Organization and now Honorary Professor at the School of Law of the University of Nottingham (UK), commented as follows:
The announcement yesterday by the Brazilian Minister of the Economy, Mr. Paulo Guedes, during the World Economic Forum in Davos, that Brazil will seek to join the WTO Agreement on Government Procurement (GPA) represents a huge step forward for Brazil. Joining the GPA will align Brazil’s procurement system with best practices internationally, provide Brazilian suppliers with unfettered access to huge markets for goods and services in the US, Europe and elsewhere, and send a powerful signal to the global community regarding Brazil’s determination to grapple successfully with past corruption and supplier collusion problems in its procurement system. It will establish Brazil as an important thought and practice leader in this area across Latin America and the developing world. The announcement also shows the continuing vitality of the GPA itself, which was modernized in 2012 and continues to gain new members, year by year. Minister Guedes’ announcement will be enthusiastically welcomed by advocates of good governance and procurement reforms across the globe.
