Brazil submits application to join the WTO Government Procurement Agreement

May 21, 2020

Brazil submits application to join the WTO Government Procurement Agreement

The country is the first in Latin America to submit its application to join the pact

Brazil submitted a formal application for accession to the World Trade Organization’s Government Procurement Agreement (GPA). The country’s statement (1) was published by the WTO on May 19th. Brazil was granted observer status by GPA parties in October 2017 and the Brazilian Minister of Economy, Paulo Guedes, had already declared that the country was interested in becoming a member during the World Economic Forum (WEF) in Davos.

The GPA aims to open its members’ government procurement markets (2) to foreign competition in a reciprocal manner to the agreed extent. Since it is a plurilateral agreement, each applicant negotiates its terms of participation within the parties, and it is binding only for those that have joined it. The GPA provides accountability to government procurement, establishing legal guarantees of isonomy for the goods, services, and suppliers of the members in covered activities, which, according to the WTO, are worth an estimated USD 1.7 trillion annually.

Once the agreement enhances competition, there is a consensus within the Brazilian Ministry of Economy and the Presidency that its terms align to the guidelines of economic development based on policies to attract foreign investment, especially regarding simplification and increase of legal certainty.

Last year, Brazil had already demonstrated its interest in easing foreign investment on government purchases. In June 2019, the signature of the European Union-Mercosur Free Trade Agreement established the opening of Mercosur’s market to the exchange of proposals in government procurement contracts with EU member countries. Although it has not come into force yet, such effort provides procedural transparency and non-discriminatory treatment between companies from both economic blocks.

The next steps for the Brazilian accession to the GPA include the presentation of an initial offer regarding the conditions to access the market of public procurement and the replies to the Checklist of Issues for Provision of Information. In Brazil's official statement, Alexandre Parola, Ambassador of Brazil to the WTO, affirms that Brazil hopes to present its initial offer and its replies to the checklist "as soon as the current situation impacted by COVID-19 returns to normalcy".

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Currently, 48 WTO members (including the 27 member states of the European Union and the United Kingdom) are bound by the GPA.