Brazil Formalizes Offer to Open Government Bids to Foreign Companies at WTO

RIO DE JANEIRO, BRAZIL – A year after its first announcement, Brazil formalized its offer to open government bids to international companies on Tuesday, February 3rd. The country presented a list of bodies, goods and services to the World Trade Organization (WTO) that may now enter Brazil’s government contract market after Brazil’s adherence to an international Government Procurement Agreement.

Currently, 48 countries are part of the agreement, which levels terms for domestic and foreign companies in public tenders. In a joint note, the Ministries of Economy and Foreign Affairs reported that the measure opens up access to a US$1.7 trillion per year market and expedites Brazil’s accession to the “wealthy countries” OECD group.

The main change in the agreement is exempting foreign companies from having a legal representative in Brazil to take part in government tenders. This requirement will be compulsory only for the company that is awarded the contract. Suppliers’ documentation will be mutually recognized.

The agreement does not only cover product purchase, but also services and public works. Accordingly, a foreign company will be able to compete on equal terms with a domestic company in tenders ranging from the purchase of office supplies and computer services to public works projects. The list of products and services was not publicly disclosed.

According to the two Ministries, the agreement may result in an increase of Brazilian exports by opening access for Brazilian companies to compete for government contracts in other countries. “Adherence to the agreement will foster a reduction in public spending and an improvement in the quality of government goods and services, and will encourage Brazilian exports and foreign investments in the country,” the note said.

History

Brazil’s Government Procurement Agreement membership proposal had been formalized by the Brazilian government at a meeting of the World Economic Forum, in Davos (Switzerland) in January last year. In February 2020, the country announced the debureaucratization of foreign companies’ participation in government bids. The rules would initially come into force in May, but were deferred until October last year because of the Covid-19 pandemic.

Source: Agencia Brasil

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