The Brazilian government decided to adhere to the government procurement agreement, signed within the scope of the World Trade Organization (WTO) by 48 countries. It is a market of more than US$ 1 trillion and brings together countries such as the United States, Japan, Canada and the European Union. The expectation is that, in the coming months, other giants of world trade, such as China and Russia, will also sign the document, making the Brazilian decision even more interesting.
And what does this action mean in practice? Brazilian companies now have access to public tenders held in other countries. And, on the other hand, foreign groups may participate in invitations to bid in Brazil, an extremely interesting and promising market that has an annual turnover of R$ 78 billion. It is important to remember that Brazil has already participated as an observer since 2017. The expectation of the Brazilian government is high in relation to the benefits of greater competition, such as, for example, the reduction in the rates of corruption and the offer of more competitive prices.
The government procurement agreement means that participating countries can grant equal treatment to domestic and foreign companies in public tenders, with mutual recognition of suppliers’ documentation. In practice, it is a real reduction of barriers to the participation of companies from other countries in operations. Another important point is that the company that wants to compete does not need to have a representative in Brazil.
“Brazil’s adherence to GPA (acronym for the agreement in English) is a measure long awaited by foreign investors who have (or have had) any interest in the country. The equal treatment between national and foreign companies in public procurement provided for in the agreement, coupled with the commitment to the transparency of procedures, is, in fact, a great attraction to foreign companies, from different sectors (maritime, infrastructure, oil, etc.), which have an eye on the extensive Brazilian market”, says lawyer Raphael Zaroni, partner at Zaroni Advogados. “The expectation is that the agreement will “get off the drawing board” and will actually be implemented by the government, so that the changes are soon noticed by the business community and also by society, which will have better quality services and infrastructure, with the promised reduction of corruption”, emphasizes the lawyer.