Brazil Should Use G20 Momentum to Join the OECD

Brazil Should Use G20 Momentum to Join the OECD

REUTERS/Evelyn Hockstein/Pool

Brazil has an opportunity to become a powerful bridge between developed economies and the Global South—the United States should support that ambition. 

April 1, 2024 11:28 am (EST)

REUTERS/Evelyn Hockstein/Pool
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Current political and economic issues succinctly explained.

Brazil’s presidency of the Group of 20 (G20) presents a unique opportunity for the United States to support Brazil in its ambition to be a powerful bridge between the developed world and the developing countries often referred to as the Global South. Brazilian President Luiz Inácio Lula da Silva’s (Lula) has had a longstanding objective to give the Global South a larger voice in decision-making in multilateral institutions. He made this objective one of three pillars of this year’s G20 presidency, together with social inclusion and the fight against hunger and poverty, and energy transition.  

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Lula’s global governance priority appears to be UN reform and the expansion of the UN Security Council, but that is unlikely to happen during Brazil’s G20 presidency, if at all. Even with U.S. support for increasing the number of permanent and nonpermanent representatives on the Security Council—including permanent seats for developing countries—it will be a heavy lift. Additionally, Security Council expansion would not guarantee Brazil a seat on a reformed Security Council—a longtime Brazilian strategic goal.  

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While UN Security Council reform is a worthy ambition, alongside reform of the Bretton Woods Institutions, a more effective near-term opportunity for Brazil to position itself as a bridge to the Global South is to conclude accession talks to join the Organization for Economic Cooperation and Development (OECD). It would also serve U.S. strategic interests for Brazil to have a seat at this table given the Joe Biden administration’s keen focus on the collective action of democracies and market-based economies, the two defining features of OECD members. The United States should support Brazil with whatever technical assistance it needs to finish its outstanding structural reforms to conform to OECD standards, primarily through the Inter-American Development Bank which already provided some initial assistance. The United States should galvanize other OECD members and international organizations to provide similar support. 

Brazil has a unique and symbolic two-year window to conclude OECD accession while it hosts the G20 in 2024, the UN Climate Change Conference (COP30) in 2025, and the BRICS (Brazil, Russia, India, China, and South Africa) summit in 2025. Should Brazil become an OECD member, it would be the only country to simultaneously represent the BRICS, the G20, and the OECD. Brazil could become the de facto interlocutor between developed and developing countries during a period of rising geopolitical and economic competition while still maintaining its long-held geopolitical nonalignment. This is especially relevant given China’s increased positioning of the enlarged BRICS as an adversarial counter to the Group of 7 (G7) country interests, values, principles, rules, norms, and standards.  

Brazil has an excellent case to lead and influence governance and policy within both developed and developing multilateral institutions, yet it lacks a foothold in the former, which the OECD could provide. Membership makes sense: it is South America’s largest democracy, its $2.27 trillion gross domestic product places it between Canada and Italy, it plays an increasing role as a geopolitical heavyweight, and it is committed to the values, vision, and priorities of the OECD. Brazil is already well into the accession process, having applied for membership in 2017 and made clear from the outset that the reforms required by the OECD were consistent with its own goals. Brazil received an invitation to begin accession negotiations in January 2022 and has already reached many of the milestones. Most recently, it adopted the OECD’s Transfer Pricing Rules in June 2023 and passed a historic tax reform package in December 2023. 

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OECD membership would be advantageous for Brazil by providing a stamp of approval for global investors looking to ensure the OECD’s high standards for ease of doing business are met. Brazil would reap the benefits of private sector investment to grow and become more integrated in global value chains, especially in the transition to carbon neutrality and green manufacturing. Moving forward, the most important reforms will be addressing high external tariffs and corruption. Brazil has already committed to the OECD’s shared values, and Lula’s administration has made significant strides by improving Brazil’s defense of human rights, democratic norms and values, and environmental sustainability since the Jair Bolsonaro administration. None of these contradict Brazil’s own ambitions for itself. Brazil would also have a voice on future OECD rules of the road and best practices on artificial intelligence (AI) and fast-evolving technology standards. 

In hosting the G20, Brazil has the opportunity to engage further with the OECD, which is an integral part of the G20 fabric, acting as a strategic advisor, participating in all G20 working group meetings, and helping define the agenda. Together with the International Monetary Fund, World Bank, International Labor Organization, and World Trade Organization—where Brazil is already a member—the OECD does much of the G20’s support work, providing data, analytical reports, and proposals on topics including economic growth, tax reform, employment, poverty and development, energy and energy transition, investment, and trade. Brazil has engaged with the OECD since 1994 and participated in extensive peer reviews and policy studies, but full membership would ensure a seat at the decision-making table for all OECD policy areas relevant to future G20 summits. 

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The OECD itself would benefit from Brazil’s enhanced input in key areas. Brazil brings unique experience in successfully tackling poverty and hunger, supporting food security as a leading producer and exporter of food, and managing the trade-off between dependence on increased oil production and exports and transitioning to renewable energy in its own economy, given that 83 percent of Brazil’s domestic energy matrix comes from renewable sources, making it one of the cleanest in the world. 

Only President Lula can decide whether Brazil should move forward with OECD accession, and he has not yet played his hand. Much has changed since Lula was last in office and the OECD was considered just a “club of rich countries.” Mexico, Chile, Colombia, Costa Rica, and Turkey are members and other large developing countries are signing up to apply. Last month, the OECD opened accession discussions with Indonesia, and in December 2023, Argentina’s new President Javier Milei engaged the OECD to “actively resume” the process of becoming an OECD member. The stigma has been replaced with an eagerness to be part of this rich club of countries as they seek to grow and prosper together. 

In the meantime, Brazil will need to navigate its own potentially diminished power in the BRICS, given the organization’s expansion and the increasing dominance of China’s leadership. Brazil, together with India, should ensure the group is more than a voice and platform for China and other autocratic countries. By hosting the BRICS Summit in 2025, Brazil can prove itself the powerful bridge it aspires to be.  

Balancing the U.S. security relationship with Brazil—given its independent and differing positions on Russia, China, Israel and Gaza, and more—requires accepting differences. But adding another strong democratic voice to the OECD from the Global South outweighs conflicting geopolitical positions and will ensure viability and strengthening of the multilateral architecture. As a leading member of the OECD, the United States should strongly encourage and support Brazil’s membership during this 2024–25 window and use the momentum of Brazil’s G20 presidency to help push it forward.  

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