BRASILIA – Brazil is calling for opening government procurement as a tool of regional integration, which, according to conservative estimates, could create business opportunities worth $40 billion.
“The Brazilian government seeks to more fully integrate the country into the global economy” and this includes some “non-conventional ways,” Jorge Arbache, secretary of international affairs at the Ministry of Planning, Budget, and Management, told EFE.
These “non-conventional ways” include negotiating government procurement agreements, as in the case of the agreement signed last December during Mercosur’s most recent summit.
Mercosur’s Government Procurement Protocol will allow companies from the trade bloc’s member states – Argentina, Brazil, Uruguay and Paraguay – to bid on government contracts in any of these four countries.
The agreement will come into effect once it is ratified by the four parliaments.
Arbache said that the change could lead to significant savings in public spending.
He also cited projections made by Brazil’s government showing that the procurement agreement would advance regional integration, as companies from the four countries would be more willing to create partnerships to bid on government contracts.
Government procurement agreements, however, have faced resistance within the Mercosur.
An agreement had already been negotiated in 2006, although it was never ratified.
According to Arbache, the current Government Procurement Protocol is different, as every government has agreed to the terms and its implementation will be progressive.
The only country that has expressed doubts is Paraguay, which is “understandable” because of the size of its economy, Arbache said.
“In countries with smaller economies, the government has a crucial role in promoting economic activities and even has economic influence through procurement,” which can help “promote social justice” and “incite technological modernization,” he added.
This is why the matter is “highly sensitive” in certain countries, although Arbache said he was convinced that the government procurement agreement would “benefit everyone.”
Brazil has already signed similar agreements with Peru and Chile, and is currently carrying out negotiations with Mexico, Colombia and Canada.