U.S. to Prioritize Brazil Over Argentina in OECD Reversal

Samy Adghirni

(Bloomberg) -- The Trump administration plans to promote Brazil’s bid to join the Organisation for Economic Co-operation and Development, reversing a previous commitment to give priority to Argentina’s candidacy to the world body, according to three people familiar with the situation.

The new U.S. stance was communicated on Wednesday in a letter to the OECD board in Paris, where the organization is based, said the people, who asked not to be identified because they were not authorized to discuss the matter in public. The board meeting ended without further discussions on the subject, according to one of the persons. The U.S. decision had been previously conveyed to Brazilian officials and to the OECD Secretary General Angel Gurria, the persons said.

The White House didn’t respond to a request for comment while the OECD declined to comment. Brazil President Jair Bolsonaro told reporters in Brasilia on Wednesday that news of the U.S. decision was welcomed and that it shows his country is on the right path.

U.S. support to Brazil was announced with fanfare by President Donald Trump last March, during a joint press conference with his Brazilian counterpart Bolsonaro at the White House. Access to the group of 36 rich countries would help attract investment to Latin America’s largest economy and raise its global profile.

Yet in a letter sent by U.S Secretary of State Mike Pompeo to Gurria in August and seen by Bloomberg, Washington only backed the bids from Argentina and Romania, rejecting a request to discuss further enlargement of the OECD. At the time, Trump said he still backed Brazil’s entry but never formally changed his stance. Critics of Bolsonaro cited the episode as evidence that Brazil was getting no benefit from the president’s full-alignment with Trump.

Brazil’s secretary of Foreign Trade and International Affairs Marcos Troyjo said in an interview that the U.S. support for the country’s OECD bid is the biggest achievement from closer ties between the two administrations. “Future big trade deals aren’t about tariffs and quotas, they are about standards. And the OECD is a factory of standards and an elite club”, he said.

Read More: Trump Says He Still Supports Brazil in OECD, Despite Letter

It is not clear if the U.S. is only putting Argentina’s bid behind that of Brazil or whether it continues to support the country at all. Since Pompeo’s letter, Argentina has politically moved to the left, with the inauguration of President Alberto Fernandez last month. A government official in Buenos Aires declined to comment.

Joining the OECD has been a badge of honor for countries looking to show the international community that their nations have economically prospered. Brazil submitted its application to the group in May 2017.

(Updates with Bolsonaro, Troyjo comments)

--With assistance from Jordan Fabian, Patrick Gillespie, Jorgelina do Rosario, Martha Beck, Simone Iglesias and Murilo Fagundes.

To contact the reporter on this story: Samy Adghirni in Brasilia Newsroom at sadghirni@bloomberg.net

To contact the editors responsible for this story: Juan Pablo Spinetto at jspinetto@bloomberg.net, ;Julia Leite at jleite3@bloomberg.net, Matthew Bristow, Walter Brandimarte

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