Brazilian President Jair Bolsonaro signed a decree in the week to expand the existing free trade agreement with Chile. The decree, which was recently anticipated by Brazilian ambassador Michel Arslanian Neto, director of the Mercosur and regional integration department at the country's foreign ministry, in an interview with BNamericas, paves the way for companies from the two countries to participate in government procurement tenders. "This agreement will provide access for Brazilian firms to Chilean government procurement estimated at US$11bn per year, and we will see companies in the most diverse areas, from medicine, industrial goods to infrastructure, technology, among others, having access to this market," Fabrizio Sardelli Panzini (pictured), international integration manager at Brazil's industries association (CNI), told BNamericas.
Meanwhile, Brazil’s annual government procurement is estimated US$160bn, making it the fifth largest market in the world after the US, EU, Japan and Canada. "These numbers refer to the entire potential of the government procurement market in the two countries, it doesn’t mean that Chilean and Brazilian companies will be able to realistically compete in all open bidding processes," said Panzini. One of the bottlenecks is the absence of a single database where Brazilian companies can have access to all procurement tenders held by Chile’s government, which is a problem Chilean firms also face in Brazil, he said. "Larger companies have departments that are able to map all open bids, but this is not the case with SMEs," Panzini added. To address this problem, CNI created a document with guidelines for Brazilian companies that includes websites used by Chile for public sector tenders (www.mercadopublico.cl, www.chilecompra.cl, www.mop.cl and www.diariooficial.cl). The accord also includes measures to reduce bureaucratic obstacles with the aim of boosting bilateral trade. In terms of trade, Chile was the fifth largest destination for Brazil’s exports last year, with US$6.99bn. The procurement agreement was initially reached in 2018 with the previous Brazilian government, but it was pending final presidential approval. "This is the broadest agreement that Brazil has ever negotiated, with a total of 24 chapters. This agreement includes issues related to e-commerce and a government procurement agreement. In addition, this accord also comprises the end of international roaming charges for phone calls between Brazil and Chile," said Arslanian Neto.