As we expected, the online summit convened by President Lula yesterday did not seek to introduce retaliatory trade restrictions versus the US, but rather focused on the exploration of possible modalities of closer trade cooperation between BRICS economies. These discussions in our view will serve as a foundation for practical steps and initiatives in the coming years that will target greater trade and investment partnerships within the BRICS and the BRICS+ circles. The real significance of the meeting was the positioning of the BRICS bloc to take the lead in advancing multilateralism and trade liberalization in the world economy.
The main message in the statement delivered by China’s leader Xi Jinping to BRICS partners and the global community in general: “economic globalization is an unstoppable trend of history”. The key three proposals featured: the centrality of multilateralism, greater openness and the consolidation of the efforts and resources of the Global South and the BRICS bloc. President Xi further underscored the importance of upholding the multilateral trading system with the WTO at its core – something that has also been reflected in the Declarations of the BRICS summits in the past several years.
Another message coming from China’s leader – the importance of “BRICS+” cooperation, a message that points to the continuation of active outreach of the BRICS bloc to the international community and to building new alliances in the years to come. In other words, BRICS as a bloc is likely to continue to operate in “extrovert mode” through expanding the partnership belt and potentially building new modalities of alliances and trade accords that may include regional integration blocs and organizations.
For his part India’s Foreign Minister S. Jaishankar pointed to the need for BRICS economies to address some of the imbalances in their mutual trade. In particular, the Indian representative stressed the importance of ensuring greater sustainability in mutual trade via addressing the issue of sizeable trade deficits, with India registering high and growing trade gaps with some of the BRICS economies. These considerations could in our view be incorporated into the overall package of trade agreements between BRICS economies to achieve a reduction in trade imbalances alongside the rise in mutual trade turnover. This in turn could potentially be attained via bringing down non-tariff barriers in South-South trade (potentially important for the pharma industry), exploring the scope for greater trade liberalization in the services and agricultural sectors as well as in the sphere of e-commerce. There is clearly ample to scope for BRICS scholars to explore in depth the potential modalities of trade accords across the BRICS+ space that could facilitate a reduction in trade imbalances across the BRICS core as well as the BRICS partnership belt.
Overall, the statements and discussions delivered at the online summit will serve as an impulse for BRICS experts and state officials to delve into the practicalities of advancing closer trade cooperation between BRICS/BRICS+ economies. We continue to believe that the three key priorities in this area lie in forming a unified BRICS bloc within the WTO (in the “groups in negotiations” of the WTO); delineating a roadmap for reducing mutual tariff/non-tariff barriers; launching a platform for the cooperation among the regional trading arrangements of the Global South (the BEAMS mechanism). As such these steps may position the BRICS bloc to become the main source of trade liberalization impulses in the world economy and the leading force of a revitalized globalization effort[1].
For more on the discussion of the results of the online BRICS summit please see our most recent video interview: https://youtu.be/fcL2gWF-UBs?si=MzI0oSLPucCWPKV7
[1] https://eng.globalaffairs.ru/articles/brics-plus-alternative-globalization-in-the-making/
Yaroslav Lissovolik, Founder, BRICS+ Analytics
Image by geralt via Pixabay