Guedes criticizes war and sanctions and defends multilateral organizations

Minister Paulo Guedes (Economy) said this Tuesday (12) that wars and economic sanctions represent a return to the past and defended the importance of multilateral institutions in order to maintain the level of civilization achieved by the world.

“We cannot delve into a past of physical wars, economic sanctions, interruptions of trade and investment flows,” he said.

For the minister, the moment of war in Ukraine reinforces the importance of global organizations and the entry of Brazil into the OECD (Organization for Economic Cooperation and Development).

“This is a moment we cannot hesitate. Brazil wants access to the OECD to reaffirm its values, reaffirm its belief in multilateralism and in the importance of multilateral organizations. For this convergence of procedures, values ​​and, above all, to keep the global system functioning from the point of view of investment, trade, and celebrating civilization, the stage of civilization that we have reached,” he said.

Guedes’ position is completely opposite to the foreign policy view from the beginning of the Jair Bolsonaro (PL) government, which was led by Ernesto Araújo, then Minister of Foreign Affairs, until March 2021. at the head of Itamaraty, the then Chancellor made opposition to “globalism” one of his hallmarks.

Ernesto, who at the time of his inauguration was an unknown diplomat recently promoted to ambassador, left the post after having amassed the aversion of different sectors of society and the government. From the summits of the National Congress to the generals who advise Bolsonaro, from big businessmen to agribusiness leaders, everyone came together in his last days to get him off the Esplanade.

“As Brazil’s Minister of Economy, I am saying that Brazil will always work to reinforce the value of multilateral institutions,” Guedes said on Tuesday.

Guedes’ statements were made at a joint event between the Ministry of Economy and the OECD in Brasília that presented the new transfer pricing system for Brazil, a set of rules applied to multinational companies to transfer goods to companies associated with them.

According to the Ministry of Economy, work on the new transfer pricing system for Brazil started in 2018 and was based on an assessment of how aligned the rules in the Brazilian case were with those of the OECD – which resulted in a report of convergence to the Organization’s standard.

Guedes said the aim of the new transfer pricing system being launched by Brazil, one of the steps towards joining the OECD, is to avoid both excessive taxation and tax evasion. “We avoid both evils. This is fundamental because it allows us to gain efficiency,” he said.

The minister recalled that the country still wants, in addition to access to the OECD, the conclusion of the Mercosur-European Union agreement. For him, these moves will “lubricate” the investment channels and benefit Brazil.

The invitation for Brazil to join the OECD was approved in January by the Organization’s board members, which started a negotiating process that should last at least two years.

To be successful, Brazil will need to adhere to a series of regulatory instruments of the entity, in addition to having its candidacy analyzed in several committees. Among the obligations imposed on Brazil are the reduction of deforestation and climate change mitigation measures provided for in the Paris agreement.

Candidates also need to confirm their endorsement of certain values ​​of the organization. Among them, the preservation of individual freedom, values ​​of democracy, protection of human rights, as well as open, competitive, sustainable and transparent market economies.

The formal application for membership was made in 2017 and joining the “rich countries club” is one of Guedes’ priorities, but Brazil’s effective entry has been threatened by the Bolsonaro government’s environmental policy.

The French Foreign Ministry published a note in January saying that Brazil’s entry into the OECD will depend on serious, concrete and measurable progress in the fight against deforestation and climate change.

The communiqué extends to the other five candidate countries (Argentina, Bulgaria, Croatia, Peru and Romania), but it serves as an indirect warning to Brazil, whose environmental policy has been repeatedly criticized by the government of Emmanuel Macron. France is one of the 38 countries that make up the group and that need to reach a consensus to confirm membership of the entity.