How joining OECD affects Brazilian business?

Brazil made a formal application to join OECD. Getting into the club, at last and no longer an outsider. What changed?

Raising the bar

This week Minister of Finance Henrique Meirelles was in Paris for the OECD Forum. He participated in a ministerial panel. Talking to a group of delegates from Diplomacia Civil, Minister Meirelles said that the country’s entry into the organization would bring gains for both parties. According to Clara Nogueira, he stressed that for Brazil, membership would mean a richer and more direct dialogue with the most influential countries in the world economy, as well as increasing the possibility of intensifying trade relations with the private sectors of such countries. The minister also informed that being a member of the OECD would allow Brazil to modernize its economy, coming into contact with new technologies from other countries.

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Minister Henrique Meirelles with the Diplomacia Civil delegates

More compliance, more international participation

According to an executive in the insurance sector: “OECD let Brazil participates in these meetings because they want to persuade us gradually”. He explained that in the insurance business, OECD has agreements about how export credit agencies can support their exporters in terms of conditions, assistance, risk spread, compliance with environmental requirements; and those foreign agencies are bound by these agreements in their Brazilian business.

The rational is simple. A Brazilian exporter will be at a disadvantage when competing internationally. The Brazilian will have to pay a disproportional risk spread. OECD sets  a standard, an independent benchmark that is recognised and prestigious.

In fact, the OECD’s tradition of rule making in the area of officially supported export credits, dates back to 1963. By exchanging information on Members’ export credits systems and business activities, OECD has a major influence in national export credits policies relating to good governance issues. Not a bad idea when we think that it includes  anti-bribery measures, environmental and social due diligence.

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About Hildete Vodopives

Hildete de Moraes Vodopives is founder of Brazil Global and of the Harvard Strategists. She is a member of the Brazilian Investment Analysts Association (APIMEC-Rio) where she served as Corporate Relations Director and later, on the board. Hildete advises companies doing business in Brazil.
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