This OECD Competition Assessment Review of Brazil presents the outcome of a major project conducted by the OECD in close co‑operation with the Brazilian Competition Authority. The review has benefited from inputs by numerous organisations and studies how competition advocacy can help to further develop the ports and civil-aviation sectors in Brazil. Increasing competition in these sectors which are critical to national development can broadly and systematically foster economic productivity, consequently, promote well-being and quality of life throughout society as a whole.

This review examines the impact of regulation on competition in the Brazilian civil-aviation and ports sectors, which together accounted for almost 1.6% of the country’s pre‑pandemic GDP. The assessment was conducted in co‑operation with Brazilian competition authority CADE and in close consultation with relevant Brazilian authorities and local stakeholders.

This competition assessment review was carried out by the OECD, in co‑operation with the Brazilian Competition Authority (CADE), to identify rules and regulations that may hinder the competitive and efficient functioning of markets in Brazil in the civil-aviation and ports sectors.

While regulations pursue legitimate policy objectives, when they are overly restrictive or onerous, however, a comprehensive review can help identify problematic areas and develop alternative policies that achieve government objectives without harming competition.Competition Assessment Projects evaluate market regulations to identify regulatory barriers to competition. These include regulations that restrict entry into a market; constrain firms’ ability to compete (for example, by regulating prices); treat competitors differently (for instance, by favouring incumbents); facilitate co‑ordination among competitors; or restrict consumers’ ability to change suppliers. The methodology followed in this systematic exercise is summarised in Annex A., which also describes the stages of the project and provides full references to the OECD Competition Assessment methodology.This chapter provides some background information on the Brazil Competition Assessment Project, before summarising the main findings of the literature on the benefits of competition and the estimated economic benefits of implementing the recommendations.

This chapter provides an economic, institutional, and legal overview of the civil-aviation sector in Brazil. As flying is the fastest and safest way to travel between Brazilian states, the sector has a fundamental role in Brazilian economic development and national integration. In 2019, before the COVID‑19 pandemic, aviation accounted for 1.4% of the Brazilian GDP and 1.5 million jobs. The main institutions responsible for issuing and implementing regulation, and overviewing the sector are the Ministry of Infrastructure, through the National Civil Aviation Secretariat (Secretaria Nacional de Aviação Civil, SAC), and the National Civil Aviation Agency (Agência Nacional de Aviação Civil, ANAC). The civil-aviation sector is highly regulated, including several technical requirements that follow international standards developed to ensure aviation safety and security. The OECD has identified 120 pieces of legislation related to the civil-aviation sector dealing with passenger traffic, on which this project focuses.

This chapter provides an economic, institutional, and legal overview of the ports sector in Brazil. The water transport sector has a fundamental role in Brazil’s foreign trade and in its economic development: it is responsible for the flow of more than 98% of Brazilian exports and more than 92% of imports in terms of volume. Three main bodies are responsible for the creation of policies and guidelines for the port sector, while specific state‑owned enterprises are responsible for exercising the functions of port authorities in public ports, and the Agência Nacional de Transportes Aquaviários as an independent regulatory agency is in charge of implementing the Ministry’s policies for ports and waterways.

Several regulations that apply to both civil aviation and ports sectors pose challenges to competition. These norms are related to public procurement and procedures for foreign firms to operate in Brazil. This chapter makes recommendations for reform.

The Brazil Competition Assessment Project began in the first half of 2021 and was carried out in five phases, as agreed between CADE and the OECD. This annex describes the methodology followed in each of the project stages.