I am very excited to announce the launch of a new blog category/thread in arisoflawxley: WTO/GPA: Brazil Accession.
The purpose of the new thread is to kick-start a discussion about two important parallel developments, namely the entry into force of the new public procurement legislation in Brazil (Law 14.133, of 1 April 2021) and Brazil’s WTO/GPA accession negotiations. These two developments may stem from different starting points, but they inevitably intersect, influence one another and ultimately affect and inform public procurement law and practice in Brazil as well as the process of internationalisation of government procurement more widely.
The new tread kick-starts with a thought-provoking piece by Professor Vinícius Klein and Mrs Ariê Ferneda (The piece will be published on arisoflawxley on Thursday 16 December).
Although my interest in Brazil and Brazilian government procurement is not new, the idea for this new blog category/thread came whilst I was writing the preface to the forthcoming 3rd edition of the book of my good colleague Rafael Wallbach Schwind, about the new public procurement legislation in Brazil (the book will be reviewed here soon).
“Understanding more about the Brazilian government procurement regime, its policies, and priorities as well as the wider legal, administrative and economic environment of the country is therefore crucial.”
After all, arisoflawxley ‘s motto is “connecting the dots- building bridges”. What better opportunity for starting a conversation forum which connects the various stakeholders within and outside Brazil at a time when better understanding of the Brazilian government procurement legal system, practice, policy preferences, political and economic context is necessary for the success of the GPA negotiation process.
I include below the preface I wrote for the to the forthcoming 3rd edition of Rafael Wallbach Schwind’s Licitações Internacionais. Participação de Estrangeiros e Licitações Realizadas com Financiamento Externo, which explains the importance and topicality of this discussion/conversation.
It is almost customary for introductions/prefaces of books which cover public procurement law to begin by referring to the economic importance of government procurement (an area which corresponds to 10 to 15 per cent of a country’s Gross Domestic Product (GDP) as an average). The reference to these statistics of government procurement is generally aimed at highlighting the significance of this area of economic activity at global level and prepare the readership for the next part which contains a “sales pitch”: the case for the benefits of the internationalisation of government procurement regulation, through the establishment of international disciplines which aim at opening-up national government procurement markets to international participation, thus fostering competition and leading to net (economic) welfare gains.
Although such an introduction was needed perhaps at the start of the main effort of the internationalisation of government procurement regulation, in the late 80s early 90s, as a means to attracting the attention of stakeholders, I believe that thirty or so years later, the process of internationalisation of government procurement regulation has gained enough traction and as a result such a “sales pitch” is now optional. The process speaks for itself.
As we have discussed elsewhere with esteemed colleagues, one of whom is the author of the present book, the internationalisation of government procurement regulation has evolved significantly and now manifests itself in a variety of bilateral, regional and plurilateral agreements. Nowadays it is almost unthinkable for comprehensive trade agreements not to include disciplines in the area of government procurement often taking the form of lengthy chapters and occupying a lot of the time and energy of these trade negotiations. The aforementioned momentum of the internationalisation of government procurement regulation process explains the latter’s “survival” during the recent resurgence of “economic nationalism” or “neo-mercantilism”. Indeed government procurement was probably the only area of international trade where meaningful negotiations continued against an atmosphere of general stagnation -see for instance the stalemate of multilateral negotiations of the Doha round and the World Trade Organisation (WTO) Appellate Body crisis.
Central role in the process of the internationalisation of government procurement regulation is played by the Government Procurement Agreement (GPA), the plurilateral agreement administered by the WTO since 1994. After the successful renegotiation of the GPA 1994 which culminated in the formal adoption of the revised text of the Agreement in 2012 (GPA 2012) and its entry into force in 2014, the GPA saw its membership increase by attracting both developed economies (Australia, New Zealand) but also, for the first time, developing economies (Armenia, Montenegro and Moldova). In addition, and perhaps more importantly, other important global players and emerging economies have initiated accession negotiations amongst them Brazil, the Russian Federation and China.
The existing size of government procurement opportunities under the GPA regime, currently estimated circa $1,7 trillion dollars annually, in combination with the potential increase of the latter after the accession of large economies like China constitute a pull factor for other countries to join. However, it is not just the government procurement opportunities that explain why countries, especially developing economies and emerging markets have joined or consider joining the GPA. There is another important factor that appeals to them: joining the GPA is a “validation” that their national government procurement system adheres to the standards of good governance. It is a testimony that their system conforms with a framework that promotes transparency, contributes to the fight against corruption. It also provides these countries with the opportunity to participate in a regulatory ecosystem which seeks constant improvement, facilitates capacity building and identifies best practices. Such a “validation” can also have positive externalities from a political standpoint and also from an economic and foreign investment standpoint making these emerging economies more attractive to foreign investment. In a nutshell GPA membership is a “badge” of a modern, transparent, system of government procurement which all states (and especially developing economies) are proud to showcase.
Moreover, the significance of the GPA as a benchmarking regime and an ecosystem of improvement and capacity building is expected to increase with the new set of objectives promoted by national and international policy agendas such as social and green sustainability in government procurement, protection of Human Rights in the global supply chains and the wider net zero aims agreed at the UN Climate Change Conference (COP26) in Glasgow.
In this international regulatory environment Brazil’s application to join the GPA in May 2020 and the formal start of accession negotiations in March 2021, constitute a significant development. Brazil is one of the so-called “BRICS” (Brazil, Russia, India, China and South Africa) emerging economies with immense potential in terms of economic development. Understanding more about the Brazilian government procurement regime, its policies, and priorities as well as the wider legal, administrative and economic environment of the country is therefore crucial. Furthermore, the need to update our knowledge about the Brazilian government procurement legislative framework is intensified because of the enactment of the new Public Procurement Law, Law 14.133 in April 2021. The coincidence of the introduction of the new legislation with the almost simultaneous start of Brazil’s GPA accession negotiations raises pertinent questions of law and policy which are relevant for practitioners, negotiators, and academic researchers.
“…joining the GPA is a “validation” that their national government procurement system adheres to the standards of good governance. It is a testimony that their system conforms with a framework that promotes transparency, contributes to the fight against corruption. It also provides these countries with the opportunity to participate in a regulatory ecosystem which seeks constant improvement, facilitates capacity building and identifies best practices.”
The timing for publishing the present volume could not have been better. The book puts the Brazilian government procurement legislation in its wider context, analyses the features of the new law, explains the improvements introduced by the latter and identifies the areas where tensions still exist between the Brazilian government procurement rules and the GPA regulatory framework. Rafael Wallbach Schwind uses his extensive knowledge as legal practitioner, arbitrator, but also as prolific academic writer, to shed light to these important aspects which will inform and affect the negotiation agenda.
This book is important for all stakeholders, at national and international level, with an interest in Brazilian government procurement. It constitutes a significant contribution which is relevant both from a practical and theoretical standpoint.
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