What is the OECD?

If you’re finding it difficult to keep up with the many acronyms used by politicians and the media, you’re not alone. By the end of this article, you’ll be well-acquainted with one of the most important.

This week, Australian representatives, led by the Minister for Trade and Tourism, Senator the Hon Don Farrell, and the Deputy Permanent Representative of the Australian Delegation to the Organisation for Economic Co-operation and Development (OECD), Mr Anthony Stannard, attended the OECD 2025 Ministerial Council Meeting.

Join the Nexus APAC team as we detail what the OECD is, why it is important, and the key takeaways for Australia and the global economy.

About the OECD

The OECD is an intergovernmental organisation that succeeded the Organisation for European Economic Co-operation (OEEC) in 1961. Like its predecessor, the OECD’s overall goal is to serve as a platform for governments to debate and shape economic frameworks that encourage global development and prosperity.

The OECD also works closely with other international and regional organisations such as the World Trade Organisation (WTO), G20, Association of Southeast Asian Nations (ASEAN), and the International Monetary Fund (IMF) to promote economic development and security.

Although its main purpose relates to economic policies and frameworks, the OECD also acts as a forum for general discussions around pressing issues such as the rise of artificial intelligence (AI) and the growing threat of climate change.

The OECD’s annual Ministerial Council Meeting brings together international leaders and representatives, and provides an important opportunity to discuss current issues, improve diplomatic relations, and promote a secure and prosperous world order.

OECD Membership

The OECD is comprised of 38 members:

In addition to these 38 members, there are also 8 Accession Candidates who work alongside the OECD and are seeking membership. These are:

• Argentina
• Brazil
• Bulgaria
• Croatia
• Indonesia
• Peru
• Romania
• Thailand

The requirements to become a member of the OECD are different for each Accession Candidate. Following nomination by an existing member of the OECD, the OECD Council establishes a roadmap for the Accession Candidate containing tailored key performance indicators.

At ratification, the OECD comprised of 19 members, meaning exactly half of the current members have undertaken the existing accession pathway to gain membership.

Why is the OECD important to Australia?

Australia joined the OECD in 1971, becoming the organisation’s 23rd member country and the third from the Asia Pacific region. Australia is particularly involved in the OECD Southeast Asia Regional Programme (SEARP) and served as its co-chair from 2022-2025, alongside Vietnam.

Additionally, the current OECD Secretary General is an Australian, former Senator the Hon Mathias Cormann. He served as Minister for Finance for seven years under the Abbott, Turnbull and Morrison governments, making him the longest serving Finance Minister in Australia’s history.

The OECD has also been instrumental in the creation of revolutionary frameworks and recommendations which have influenced Australian legislation, including:

• Criminal Code Amendment (Bribery of Foreign Public Officials) Act 1999 (Cth) (‘Bribery Act’)
• A New Tax System (Goods and Services Tax) Act 1999 (Cth) (‘GST Act’)
• International Tax Agreements Act 1953 (Cth)
• Social Security Legislation Amendment (Youth Allowance Consequential and Related Measures) Act 1998 (Cth) (‘Youth Allowance Act’)

Key Takeaways from this week’s Ministerial Meeting

The 2025 OECD Ministerial Council meeting, chaired by Costa Rica, with Australia, Canada and Lithuania as Vice-Chairs, took place from 3-4 June at the OECD Headquarters in Paris. This meeting was centred around the theme of ‘Leading the Way Towards Resilient, Inclusive, and Sustainable Prosperity Through Rules-Based Trade, Investment and Innovation’.

Over the course of the two day forum, representatives emphasised the importance of strengthening regional cooperation and knowledge sharing, raised concerns over a downgraded global growth forecast (particularly the US economic outlook), and reaffirmed a commitment to combating state supported illegal fishing and illicit trade.

The OECD also committed to further strengthening its partnership with Latin America and the Caribbean through the adoption of the Strategic Framework for Latin America and the Caribbean, and launched the Paraguay Country Programme, a structural reform agenda to address major socio-economic policy challenges.

Forums such as the OECD also provide opportunities for ‘sideline diplomacy’ and, in this way, can facilitate outcomes beyond their immediate remit.

Although not an item on the agenda for the OECD, Minister Farrell seized the opportunity to re-ignite discussions of an EU-Australia Free Trade Agreement (FTA) with the European Commissioner for Trade, Mr Maros Sefcovic. Initial negotiations for an EU-Australia FTA broke down in 2023, largely due to deadlock over agricultural market access. In a global environment of increasing economic volatility, there is optimism that this historic deal may be concluded in the coming weeks.

Photo credit: Heute