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Tuesday, 03 December 2013 14:17

Introduction: BRICS in the WTO

Written by Vera Thorstensen and Ivan Tiago Machado Oliveira

The following is a translation of the introduction to a book originally published in Portuguese by the Institute of Applied Economic Research (IPEA), Brazil, in 2012 as part of its research project on global trade regulation undertaken in collaboration with the Centre for Global Trade and Investment of the FGV - School of Economics.  Translations of additional chapters will be published in English by the South African Institute of International Affairs in January 2014.

pdf  Click here to download the Introduction in PDF (84.18 kB) .

In light of the great uncertainties surrounding the current global political and economic situation, the role of emerging countries has been the focus of growing academic interest. The unfolding of the financial crisis in the late 2000s, which put into question the leadership role of the US and the EU as spokespersons of political advances and the engines of economic growth, aroused interest in emerging countries, who have succeeded in getting out of the crisis and becoming important drivers of global growth.

At the beginning of the 2000s, Brazil, Russia, India and China, with large domestic markets and growing economies, stood out from the rest. A phonetically suitable acronym – BRIC – was then created with their initials as a promotional element of a portfolio containing risky investments. Because of the stability of their political framework and their continued economic growth, already by the mid-2000s an opportunity surfaced to explore the possibility of joint action between these countries in major international forums of global governance. The original idea was to create a politically cohesive group as a counterbalance to the major international players: the US and the EU. The first meetings date back to 2008 and the formalisation of the group as a new voice on the international stage took place in 2009, with the Summit of the Heads of State and Government in Yekaterinburg, Russia. In 2011 South Africa’s entry was formalised, thereby completing the BRICS acronym. Starting in 2008, meetings between ministers of different areas and senior government officials multiplied, providing substance to a broad international agenda which included not only Group of Twenty (G-20) finance, but also other international forums related to trade and the environment.

Consequently, academic research has intensified with regard to the evolution of the relations between these five countries in the main international political and economic forums over the years as their relations have become further intertwined. A few pertinent questions arose, including how the BRICS countries, which often defended different positions, began to co-ordinate proposals on themes reflecting different realities and interests? On the international agenda, what areas allow for co-ordination between the BRICS members and at what points does such co-ordination seem unlikely? Will financial co-ordination be possible, since the five countries have different needs and practices? In the end, is BRICS just a piece of propaganda or can it already be regarded as a relevant international grouping?

One of the most important forums in the multilateral sphere, which provides ample opportunity for research on the role of the BRICS members as international players, is the World Trade Organization (WTO). The subject of trade policies, when dissected by its instruments of action, presents an interesting picture for examining the participation of each element of the BRICS group as players in the WTO. Additionally, the evolution of the Doha Round negotiations allows for an analysis of an important instance in the history of these countries which, throughout the course of the consolidation process of their political co-ordination, have revealed themselves as new players on the international stage. Though the world still thought of the BRICS countries as a risky investment portfolio, four of these members had already begun an intense exercise to co-ordinate their interests in the complex arena of international trade.

The purpose of the original book published by IPEA in 2012 is to conduct a comparative analysis of the trade policies of each of the BRICS members, with the WTO as a frame of reference. Thus, the book examines the inclusion of each of these members in international trade; their participation in the multilateral trade regime, in terms of their diplomatic–political pillar, the dispute settlement system and their political–negotiating pillar; and the Doha Round negotiations, during which there was an important exercise of co-ordination between the countries of the group within the multilateral trade regime.

Every book has a story, and this one starts with the launch by the Board of Studies and International Economic Relations (DINTE) of the Institute of Applied Economic Research (IPEA) of the Global Trade Regulation Project, which has as one of its lines of research a comparative analysis of the trade policies of the BRICS countries. As a preliminary result of the project, IPEA published texts for discussion and technical notes, available on the IPEA website, which reflected the analytical and research path of the group of researchers involved. The combination of the interests of the institute, which was also responsible for co-ordinating Brazil’s participation in the think tank seminar of the BRICS countries, and of the Center on Global Trade and Investment of the School of Economics of São Paulo and the Getúlio Vargas Foundation (CCGI–FGV), resulted in fruitful co-operation which has broadened the research agenda, giving greater impetus to the project and thereby allowing for the preparation of this book. As such, this is a collective work that received the dedication and contributions of researchers associated with IPEA and the CCGI–FGV, who share authorship and responsibility with their organisers for the analyses carried out herein. This is thanks to the efforts of Abrão Árabe Neto, Daniel Ricardo Castelan, Daniel Ramos, Carolina Muller, José André Stucchi, Thiago Nogueira, Fernanda Bertolaccini, Fabrízio Sardelli Panzini, Frederico Arana Meira, José Luiz Pimenta Júnior, Jacqueline Spolador Lopes and Belisa Eleotério.

In the chapters that follow a summary is presented of the trade policies of each of the BRICS countries, their similarities and contrasts, and the roles that they play as members of the WTO, through the usage profiles of the main instruments of trade. This analysis indicates the areas where the interests of the BRICS members are convergent and where they are divergent, while providing a panorama of the possible co-operation between the groupings in terms of multilateral trade. The aim is to demonstrate that, even in the light of great commercial and political differences, there is room for strategic co-ordination in support of common interests, which are identifiable through a detailed analysis and comparison of the profile of the countries’ trade policies.

In Chapter 1 the key moments in the development of BRICS’ political interaction are presented. The history of the participation of Brazil, India and South Africa in the General agreement on Tariffs and Trade (GATT) and in the WTO is discussed, and the stages of China’s and Russia’s accession to the organisation are outlined.

Chapter 2 provides and analysis of the international trade profile of each country, presenting the development of the main trade indicators since the early 2000s. From this general framework, each of the main policy instruments is examined over ten chapters (Chapter 3 to Chapter 12), addressing tariffs on agricultural and non-agricultural goods; agriculture; technical, sanitary and phytosanitary barriers; commercial defence (ie, anti-dumping, countervailing measures and safeguards); services; intellectual property; investments; plurilateral agreements (ie, information technology (IT) and government procurement); new themes (ie, Singapore issues and the environment); and preferential agreements.

Chapter 13 highlights the participation of each of the BRICS countries in one of the most important agencies of the WTO, the Dispute Settlement Body (DSB), a forum that not only resolves trade disputes, but also serves to interpret key concepts that had been left in ambiguity as a result of an effort to conclude the Uruguay Round.

Chapter 14 shows the participation of each of the BRICS members in the Doha Round by examining their main proposals and positions during the round. One can therefore proceed with a detailed analysis of the first initiatives of political co-ordination on different issues, such as those discussed in the G-20 Agriculture and in the Non-Agricultural Market Access Group (Nama-11).

Finally, in the summary and conclusions chapter, the organisers and authors highlight the points of common interest and divergent points for each issue of trade policy analysed in this work, in order to illustrate, in addition to the difficulties faced when co-ordinating their positions, a few aspects in which co-operation could be carried out more actively.      
The researchers who participated in this project hope that a reading of the following pages will pique the reader’s interest in the trade policy agenda, in general, and in the BRICS countries, in particular, by raising awareness not only of the degree of political co-ordination between the members of the group, but also the fascinating area of international trade regulation.

Research team: Vera Thorstensen, Ivan Tiago Machado Oliveira, Abrão Árabe Neto, Daniel Ricardo Castelan, Daniel Ramos, Carolina Muller, José André Stucchi, Thiago Nogueira, Fernanda Bertolaccini, Fabrízio Sardelli Panzini, Frederico Arana Meira, José Luiz Pimenta Júnior, Jacqueline Spolador Lopes, Belisa Eleoterio.

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