Advantages and disadvantages of Brazilian accession to the Organization for Economic Cooperation and Development – OECD

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DOI: 10.32749/nucleodoconhecimento.com.br/law/brazilian-accession
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ORIGINAL ARTICLE

CORDEIRO, Luciana Machado [1], CAMPINA, Ana Cláudia Carvalho [2]

CORDEIRO, Luciana Machado. CAMPINA, Ana Cláudia Carvalho. Advantages and disadvantages of Brazilian accession to the Organization for Economic Cooperation and Development – OECD. Revista Científica Multidisciplinar Núcleo do Conhecimento. Year 06, Ed. 04, Vol. 02, pp. 88-102. April 2021. ISSN: 2448-0959, Access link: https://www.nucleodoconhecimento.com.br/law/brazilian-accession, DOI: 10.32749/nucleodoconhecimento.com.br/law/brazilian-accession

ABSTRACT

The research work, which is proposed here, has the scope to bring to the discussion the advantages and disadvantages arising from Brazil’s support of the OECD. It is an International Organization that through its members and member countries promotes policies aimed at the development and well-being of people. The study will begin with a brief history on the creation of the Organization, pointing out its origins, objectives and instruments, besides characterizing what it means to be a member of the Organization. The methodology used will be bibliographic, based on doctrine based on the theme. In conclusion, it will address the importance of global governance, in order to discuss the main results of the study on the admission process of Brazil, as well as the advantages and disadvantages of Brazil’s support to the Organization.

Keywords: Brazil, Adesion, Public Policies, Advantages, Disadvantages.

1. INTRODUCTION

The research work that is presented now has as object of study the advantages and disadvantages regarding the Brazilian accession to the OECD – Organization for Economic Cooperation and Development.

The OECD is an international organization composed of the most industrialized countries of the market economy, which exchange information and establish common policies, aiming to maximize the development and economic growth of member countries.

The application for admission to the OECD depends on the fulfiling of some requirements, known as legal instruments and recommendations, as well as the support of other member countries, as the organisation works with mutual support.

Brazil has been in the process of admission since the request made in 2017, fulfills some requirements and is receiving the support of member countries, and especially the U.S., after the country’s change of strategy. It will be up to the research work to analyze all this dynamics.

The possible entry of Brazil into the OECD generates expectations of progress for the country, however it is a fact that a whole historical context will be taken into account, which will translate positive and negative perspectives, so that it will be appropriate to analyze the research work that will come from this research work, the following questions: What is the role of the OECD in the global context? How important is Brazil’s entry into the OECD? What will be the possible legal, economic and social effects to be generated for Brazil with its entry into the OECD? What are the criteria to be met for joining the OECD? Will there be advantages and/or disadvantages for the country?

The research work aims to study the historical context and the worldwide insertion of the OECD, as well as to analyze the process of admission of Brazil as a member of the organization presenting its advantages and disadvantages. Indicate the origins of the OECD through its historical context; to point out the importance of the OECD in world governance, highlighting the policy of admission, economic and social development; infer about the admission process of Brazil, observing the advantages and/or disadvantages of admission.

This research can be classified as its nature as applied methodological, since it is intended to investigate paths and procedures for achieving a certain purpose, so that results capable of providing a global view about the importance of OECD in the global context, through methodological integration, as well as the advantages and disadvantages of the future possible admission of Brazil , and in this case the approach will be qualitative and, with regard to the types of research, as to the objectives, will be explanatory and, with regard to procedures, bibliographic and case study.

The structure of the work will initially address the historical context of the organization, its worldwide and last importance, the process of admission of Brazil and consequent advantages and disadvantages of the entry.

2. BRIEF HISTORY ON THE OECD

The OECD is an international organization that aims through mutual work between member countries to provide progress and development for nations by providing well-being for their peoples.

2.1 THE ORIGINS OF THE ORGANIZATION FOR ECONOMIC DEVELOPMENT AND ITS OBJECTIVES AND INSTRUMENTS

The OECD’s origins date back to the post-World War II period. Its creation is associated with the European arrangements for the execution of the European Recovery Program – ERP, which was proposed by the United States and became known as the Marshall plan (OECD, s.d).

George Catlett Marshall, then Secretary of State of the United States, in a famous speech delivered at Harvard University on June 5, 1947, stressed the importance of the United States doing what it could to return to the normal economic health of the world, emphasizing that without which there would be no political stability. And also, the importance of establishing unity of European leaders for joint decision-making, focusing on the European economic recovery. It should be emphasized that the initiative should come from the Europeans. Marshall suggested that Europe and the United States could develop together a recovery plan for Europe.

Then, on 3, 1947, the foreign ministers of Great Britain and France invited all countries to meet in Paris for the preparation of an economic recovery plan. The Conference established the European Economic Cooperation Committee to manage the early stages of the European Recovery Programme (WOLFE, 2008, p.26).

From that moment, in April 1948, the predecessor of the OECD, the OCEE – Organization for European Economic Cooperation (OECD, s.d) [3], was created. Which, after a certain period of activity, declined after 1952 due to the unexpected end of the Marshall Plan, in addition to a subsequent amendment in favor of NATO – North Atlantic Treaty Organization. The change reflected in the mutual security policy that mixed economic aid and military assistance. OCEE was replaced by the Mutual Security Agency – for some purposes on January 1, 1952. In addition to this, other autonomous agencies were created for the sphere of activities of OCEE.

In September 1961, the OCEE was replaced by the OECD, a global body. Encouraged by the success and prospect of carrying out the work done on a global stage, Canada and the U.S. joined oecc members in signing the Convention of December 14, 1960. The OECD was officially born. The Convention entered into force on 30 September 1961.

Japan joined in 1964. Today there are 36 countries that meet regularly to identify problems, discuss, analyze and promote policies for the solution.

Second (GURRIA, s.d), in information recounts its history the U.S. has seen its national wealth nearly triple in five decades since the creation of the OECD. It reports that other countries have made similar progress, and also highlights countries considered for a few decades as smaller actors and that today emerge as new economic giants. They are Brazil, India and the People’s Republic of China. These countries are partners of the Organization.

Special emphasis for Brazil, since the intention of this study is to address the advantages and disadvantages and disadvantages of Brazil’s OECD’s support.

However, before this approach, it is important to present in the next topic the importance of being a member of the Organization.

2.2 WHAT IT MEANS TO BE MEMBERS OF THE OECD

The OECD is at the Centre for International Cooperation. Its member countries work with partners and organizations around the world to address pressing political challenges.

The Organization works through intellectual production seeking to discuss strategies and enable the formulation of policies and propose joint development. Thus, the group serves as a space for exchanging experiences to find a solution to challenges arising from the international economy, as well as in national public policies.

Article 10 of the OECD Convention sets three main objectives for the Organization, one of which is to contribute to a solid economic expansion of member and non-member countries in the process of economic development.

The OECD has mechanisms to monitor the internal action of its members and make sure that they are implementing the combined policies, and also to force them if they are not.

More than protecting against imminent external threats, the OECD represents an alliance of shared identities around liberalism and liberal democracy whose center is the US and Western Europe. These countries are not the source of danger, but rather a basis for economic and political gains for countries that adhere to the model. Becoming a member of the OECD means adhering to certain values and, in return, new members are expected to have international behaviour that favors leaders and their status quo position. (GUIMARÃES, 2017, p. 107)

According to what you infer (DAVIS, 2016.) the choice of new members for the OECD is highly related to entrepreneurial decisions aimed at the economic reforms recommended by the OECD, as well as to improved relations with current members. Currently, 36 countries make up the OECD. The twenty founding members and the other 16 who later became members.

Economic reform is not the only basic criterion for adtome, democracy, has also become a criterion to be considered for the following. Meanwhile, the discussion about the OCDE admission policy will be presented in the next item of this research paper.

3. OECD AND ITS IMPORTANCE IN WORLD GOVERNANCE

3.1 THE MEMBERSHIP AND MUTUAL SUPPORT POLICY

Becoming an OECD member is not an easy task. Requires submission to a rigorous review process. The governing body comprises all members of the Organization and must decide on the opening of discussions about the addition of new members and to fix the terms and conditions.

After approval by consensus of the OECD a document entitled Accession Roadmap is issued, it lists the revisions to be made for further evaluation of the Organization, such as the candidate country’s position in relation to OECD instruments and their policies and practices in relevant areas.

The following is an overview of the steps in the process of adhering:

negotiations by means of a committee from the OECD or application to the OECD;

Accession Roadmap. The OECD sets out the terms for country-specific to be departing;

Initial memorandum of the candidate country with its position on the 250 oecd legal instruments;

technical reviews by the OECD and meetings with representatives of the candidate country;

unanimousdecision by the OECD Council;

Approval by the National Congress and ratification of the Agreement; and filing of the Agreement of Access (GIÁCOMO, 2019, online).

The duration of the process can vary between 3 and 4 years. Although in some cases the deadline may be longer.

However, it is important to note that during the process, sensitive points such as conflicts between national legislation and OECD guidelines will be analyzed.

The search for sustainable development through mutual cooperation is imperative for the benefits to be achieved.

It is a fact that cooperation for development does not have the excuse to create a perfect world. However, one already has the conviction that progress will only take place through solidarity.

The OECD’s work through mutual support is already proven through data presented by the Organization, which claims global progress is remarkable. And, it cites some achievements from recent decades. The number of people living in extreme poverty is at a low level, the infant mortality rate has dropped, literacy is on the rise and nine out of ten girls worldwide, 75% in developing countries, now complete primary education (OECD, 2019.)

In this perspective, however, in the conception of Moorehead e Silva (2019, p. 20), the process of development of the present day is different today, in relation to past decades. Rich Western nations no longer dominate the global agenda. The rapid transformations of many countries regarded as geopolitical powers mean that the ancient forms of dividing countries into categories such as donor and recipient, developed and developing, rich and poor no longer apply.

Next, the approach will focus on the policy of economic, social and environmental development.

3.2 ECONOMIC, SOCIAL AND ENVIRONMENTAL DEVELOPMENT POLICY

After admission to join the OECD, member countries come to each other’s efforts for a common goal, namely economic, social and environmental development.

The work carried out by the OECD aims to establish a stronger, cleaner and fairer world economy. We highlight the Organization’s main objective, namely, to promote policies for sustainable economic growth and employment, improving the standard of living and liberalizing trade. By sustainable economic growth, the OECD understands growth that balances the economic, social and environmental balance (OECD, 2017).

As for governance, it is inferable that:

[…] the ‘usefulness’ of the OECD in global governance would be under questioning due to the confluence of three processes: (i) the end of the Cold War, with the disappearance of the division between the ‘transatlantic economic alliance’, represented by the OECD, and its antagonistic pole, (ii) the affirmation of the Bretton Woods institutions and the World Trade Organization as a mechanism for managing the global economy , in the context of globalization and greater economic interdependence, generating greater competitive pressure on the OECD in international architecture, and (iii) the emergence of major actors outside the organization’s staff, with increasing influence on the performance of the economy and the international schedule (GODINHO, 2018, p. 70)

The OECD monitors trends, analyses and anticipates the development of the economy. It investigates patterns of evolution in a range of public policy areas such as agriculture, development cooperation, education, employment, taxation, trade, science, technology, industry, innovation and the environment.

As for Brazil, despite being already a partner of the Organization, its goal today is to make up the board of members. And this will be the subject of the next topic.

4. BRAZIL AND THE OECD

4.1 BRAZIL’S ADMISSION PROCESS IN THE OECD

According to the Secretary-General of the OECD, Brazil is an important partner for the OECD. For the secretary, this is a moment of crucial importance for the future of Brazil. This is because a serious economic crisis is being left behind, and reform efforts to consolidate the government’s fiscal balance and promote macroeconomic stability, including pension reform are paving the way for more sustainable growth. (GURRÍA, s.d)

It is a fact that it will still be necessary to address the issues about inequality that affects well-being and economic growth. These issues are being advanced in the negotiations due to Brazil’s interest in the OECD.

The OECD Council Resolution on Enlargement and Forced Engagement was adopted on 16 May 2007. And this invites the Secretary-General to strengthen the OECD’s cooperation with Brazil, China, India, Indonesia and South Africa, through a commitment to create enhanced programs with a view to a possible association. The Council will deliberate, according to the Resolution, on the opening of discussions on the association, so that these countries can be prepared and empowered to implement OECD practices, policies and standards.

The process of access is adapted for each case to the candidate country, being flexible and dynamic.

Brazil’s admission process to the OECD began in December 2017. By coordinated action with the Ministry of Foreign Affairs, it took place during a Global Forum on the subject held in France that year.

In March 2018, cade (Administrative Council of Economic Defense) received positive signalling to the request, but was also informed that it would have to undergo a peer review process, which would cover broad and thorough Brazilian competitive policy and legislation and its compliance with the standards defined by the OECD.

Taking advantage of the 130th Meeting of the OECD Competition Committee in November 2019 in Paris, the Peer Review was presented by the CADE delegation. The OECD acknowledged the major advances made by the broad implementation of the recommendations arising from the previous Peer Review, conducted in 2005 and 2010.

On July 18, 2019, Decree No. 9,920 was published, establishing the Council for the Preparation and Monitoring of the Process of Accession of the Federative Republic of Brazil to the OECD. It is for the Council to adopt the government strategy related to the preparation and monitoring of the process; approve the integrated and articulated communication policy of the organs represented in the Brazil Council and also guide the work of its Steering Committee.

As already portrayed, Brazil advances in the negotiations of recognition and proof that it is capable of being accepted as a member of the Organization, however, it is necessary to receive the support of the other members and especially of the United States, as can be seen on the website of the State Department of the American Government.

On its official website, the U.S. government clarifies that the United States supports Brazil’s steps toward participation in the OECD. It contradicts media reports, and states that the United States consistent with the March 19 Joint Declaration of President Donald Trump and President Jair Bolsonaro fully supports Brazil in the process of becoming a full member of the OECD (2019).

It is known that Brazil’s entry into the Organization will be considered a major advance in economic and social terms for the country, however, there is still debate about the advantages and disadvantages that this entry can mean. This is what will be presented below.

4.2 ADVANTAGES AND DISADVANTAGES ON THE ENTRY OF BRAZIL INTO THE OECD

Brazil’s process of its support for the OECD will enable its insertion into the world economy as an emerging power. Meanwhile, it is important to emphasize that such insertion is capable of generating beneficial consequences, but some debate about the advantages and disadvantages arising from such insertion.

Despite this possibility, the OECD, in a report on Brazil, released in February 2018, points out that Brazil is less integrated into the world economy than other emerging markets. And that stronger integration would improve the ability to compete in the foreign market, providing greater access to insum and technology (OECD, 2018).

Brazil will be able to take advantage of the benefits of greater regional and global integration. And also according to the report, among other situations, greater exposure of trade will also lead to increased productivity among domestic producers, as they improve efficiency and take advantage of new export opportunities, and this would allow the creation of new jobs.

Brazil’s support generates global chains and has as a competitive advantage for the future, the flow of trade, investment, research and development. They are pointed out as challenges that are associated with the mainness of new technological and productive standards. Godinho (2018, p. 163.) points out the following:

[…] (i) impacts on the labour market, with automation of currently existing jobs; (ii) adaptation of infrastructure, regulatory conditions and education and training systems to future technological changes; (iii) impacts on trade patterns and national growth prospects […]; (iv) potential barriers to technological advances in areas such as public health.

Godinho also points out about Brazilian participation as an opportunity:

[…] to exercise influence for negotiation of international standards, it can be recalled the performance of Brazil with regard to the Aeronautical Sector Understanding, the BEPS project and the revision of both the guidelines for multinational companies and the principles of corporate governance, OECD instruments with importance in the definition of international standards in their respective areas (GODINHO, 2018, p. 242.).

As for what would be considered a disadvantage, the argument would be the analysis that full membership could be about the flexibility of implementing development policies. This argument could have repercussions on the quality of public policies empowered by the existence of policy space, as well as on the effective degree of misalignment between national practices and the OECD normative acquis. Another negative point would be linked to the negative reputational impact on Brazil’s relationship with other developing countries (GODINHO, 2018, p. 242.).

It seems that Brazil’s support will be advantageous to it, although it still has to deal more rigorously with the responsibility to alleviate internal inequalities with a focus on social well-being.

5. CONCLUSION

This research work aimed to bring to the discussion the advantages and disadvantages that OECD’s aswell ing can provide to Brazil.

To this end, a brief history on the OECD, created in 1961, was presented and has become the source of important public policy solutions in a globalized world.

The approach then fell on the importance of the OECD in global governance, referring to the policy of admission of new members, mutual support and also the policy of economic, social and environmental development.

Finally, the discussion hovered over the admission policy, and, as can be seen, it is a complex process, since the candidate country has to, in addition to other requirements, adapt to the 250 legal instruments of the OECD, of which Brazil has already adapted to 80, besides having to receive support from other members, with the most important support and already received , that of the United States.

However, the main longing of this work was to analyze the advantages and disadvantages that the agreement may provide to Brazil, and, from what had been investigated, the advantages overlap with the disadvantages due to the level of global engagement that the initiative will provide to Brazil to perhaps leave the condition of developing country for that of developed country. And even if this thought may be utopian, the prospect of improving the socioeconomic status of the country will advance significantly.

At the beginning of the discussion about what would be good for Brazil, he should give up the different treatment he receives at the WTO (World Trade Organization), this in exchange for the support of the United States for its accession to the OECD, which only enters rich countries . In other words, Brazil would leave the condition of a developing country to be part, therefore, of a group of countries considered rich.

By conducting a well-established analysis we see that the OECD was created so that the coffers of rich countries were met, and Brazil is not yet a rich country. But if Brazil can maintain differentiated treatment at the WTO it would be extremely advantageous. Brazil is still tending the path of development and advancing this process could be disastrous from an economic point of view.

High environmental costs, for example, make it impossible for rich countries to invest in these occasions. The distribution of income in Brazil is still very unequal and this has not yet been a health issue. Of course, after entering the OECD, some multinational companies will be able to enter Brazil and generate jobs, but that does not mean that structural problems would be anana.

REFERENCES

 DAVIS. C. L. More than just rich country club: membership conditionality and institutional reform in the OECD. Princeton University. June 26, 2016. Disponível em:<https://scholar.harvard.edu/files/cldavis/files/davis2016b.pdf> Acesso em 01 de fev. de 2020.

GIÁCOMO. P. et. al. O ingresso do Brasil na OCDE e alguns debates fiscais. 2019. Disponivel em: https://www.soutocorrea.com.br/artigos/o-ingresso-do-brasil-na-ocde-e-alguns-debates-fiscais/

GODINHO. R. de O. A OCDE em rota de adaptação ao cenário internacional: perspectivas para o relacionamento do Brasil com a Organização. Brasília: FUNAG, 2018, p. 163. Disponível em: http://funag.gov.br/biblioteca/index.php?route=product/product&product_id=954

GUIMARÃES. F. Uma nova estratégia pendular? A política externa brasileira entre OCDE e BRICS. In: VASCONCELOS, Álvaro (org.). Brasil nas ondas do mundo. VALENTE, Isabel Maria Freitas & OLIVEIRA, Iranilson Buriti (Coord.). Euro-Atlântico: espaço de diálogos (coleção). Paraíba: Edição brasileira: EDUFCG, 2017, p. 107.

GURRÍA, A. Brazil: a key partner for the OECD. 2018. In: OECD active with Brazil. Disponível em: <https://www.oecd.org/brazil/Active-with-Brazil.pdf> Acesso em 02 de fev. de 2020.

GURRÍA. A. History. Disponível em: https://www.oecd.org/about/history/#d.en.194377> Acesso em 01 de fev. de 2020.

OECD.  Development Co-operation Report 2019: A Fairer, Greener, Safer Tomorrow, OECD Publishing, Paris, Disponível em:  https://doi.org/10.1787/9a58c83f-en.

OECD. OECD Work on environment. 2017-18. Disponível em: <http://www.oecd.org/env/OECD-work-on-environment-2017-2018.pdf> Acesso em 01 de  fevereiro. de 2020.

OECD. OECD Economic Surveys: Brazil. 2018. OECD Publishing, Paris. Disponível em:  http://dx.doi.org/10.1787/eco_surveys-bra-2018-en.

OECDOrganisation for European Economic Cooperation. Disponível em:<https://www.oecd.org/general/organisationforeuropeaneconomicco-operation.htm> Acesso em 21 de janeiro de 2020.

OECD. The “Marshall Plan”speech at Harvard University, 5 sw june 1947. ONLINE Disponível em:<https://www.oecd.org/general/themarshallplanspeechatharvarduniversity5june1947.htm> Acesso em 20 de janeiro de 2020.

U.S. DEPARTMENT OF STATE. U.S. fully supports Brazil’s steps towards OECD membership. 2019. Disponível em: <https://www.state.gov/u-s-fully-supports-brazils-steps-towards-oecd-membership/> Acesso em 02 de fevereiro de 2020.

WOLFE. R. From reconstructing Europe to constructing globalization: the OECD and transnational governance / edited by Rianne Mahon and Stephen McBride. Ed. OECD and transnational governance. Vancouver: UBC Press, 2008, p. 26.

APPENDIX – FOOTNOTE REFERENCE

3. The OEEC emerged from the Sixteen Conference, which sought to establish a permanent organization with the aim of continuing work on a joint recovery program, and in particular to oversee the support division. It followed the following principles: to promote cooperation between the participating countries and their national production programmes for the reconstruction of Europe; develop intra-European trade by reducing tariffs and other barriers to trade expansion; study the feasibility of establishing a customs union or free trade area; multilateralisation of payments and to achieve conditions for better use of work.

[1] Master’s student in Political Legal Sciences. Master’s student in Economic Enterprises, Development and Social Change. Specialist in Constitutional Law. Specialist in Notarial and Registral Law. Graduated in Law.

[2] Guidance counselor. Doctorate in Pasado y Presente of Human Rights.

Submitted: February, 2021.

Approved: April, 2021.

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