MercoPress. South Atlantic News Agency

What new WTO and OECD status would mean for Brazil

Jair Bolsonaro and Trump said in a joint statement that Brazil had agreed to begin a process to relinquish special and differential treatment in WTO negotiations.

Brazil’s agreement with the United States to forgo special treatment by the World Trade Organization (WTO) would apply only to future negotiations within the multilateral trade body, Director General Roberto Azevedo said on Wednesday.

For example, Brazil’s self-defined status as a “developing” country has allowed it to subsidize up to 10% of its agricultural output, whereas the limit for “developed” nations is 5%, Azevedo said.

That would not change with Brazil’s potential new status, he said at a foreign trade seminar, because the plan to forgo the special WTO status would not affect prior agreements.

After a White House meeting on Tuesday, Brazilian President Jair Bolsonaro and U.S. President Donald Trump said in a joint statement that Brazil had agreed to begin a process to relinquish special and differential treatment in WTO negotiations, in line with a U.S. proposal.

In return, the United States would back Brazil’s bid to become a member of the Organization for Economic Cooperation and Development (OECD), a forum for rich nations.

“The proposal would only concern future negotiations and whether countries would benefit or request differentiated treatment in WTO talks,” Azevedo said.

Azevedo said the United States has proposed new criteria to differentiate among a range of countries in the “developing” category, which includes major economies such as Brazil and China along with smaller nations such as Guatemala and Honduras.

According to Azevedo, such criteria could include whether a country is a member of the OECD or the G20 group of nations, and whether its participation in total global trade exceeds 0.5%.