Brazil's GPA accession will involve costs and benefits

Significance

The agreement would open a market of USD1.7tn for Brazilian companies to compete for government procurement contracts internationally, but would also render them vulnerable to competition for Brazilian government contracts from foreign suppliers on equal terms. The process of negotiations is a lengthy one, as well as controversial.

Impacts

• Accession to the GPA could facilitate Brazil’s ambition to join the OECD.
• Domestic companies’ lack of competitiveness within the GPA could aggravate existing problems with industrial performance.
• Political uncertainties surrounding the October elections could delay the pace of accession.