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BRICS to Show Its Weight at WTO

Analysis by Marwaan Macan-Markar

BANGKOK, Apr 17 2011 (IPS) - Despite political differences among member countries, BRICS has set its sights on global trade talks to assert its weight. Its declared aim: to secure economic benefits for developing nations.

The World Trade Organisation (WTO) has, not surprisingly, been singled out as a venue to demonstrate the collective strength of the informal coalition of major emerging economies across three continents – Brazil, Russia, India, China and South Africa, the BRICS nations. All member countries but Russia are members of the Geneva-based WTO.

This emerging centre of economic power – seen by some analysts as a potential counterweight to dominant industrial nations from North America and Europe, and to an economic power such as Japan – will not have to wait long, following the one-day third annual BRICS summit in the southern Chinese beach resort Sanya on Thursday this week.

The WTO is due to circulate draft texts Apr. 21 of the contentious issues over the stalled Doha round of negotiations to agree a single global trading regime. Trade representatives from the developing and developed worlds have been at odds over a raft of issues, including the heavily subsidized agriculture sectors in the United States and the European Union.

“Brazil, China, India and South Africa remain committed and call upon other members to support a strong, open, rules-based multilateral trading system embodied in the World Trade Organisation and a successful and comprehensive and balanced conclusion of the Doha Development Round,” declared the closing statement of the BRICS summit.

“Ministers agreed how to uphold the interest of developing countries in multilateral cooperation,” added China’s Commerce Minister Chen Deming. “We insisted to lock in what has already been agreed upon in past negotiations to secure a balanced and ambitious Doha round.”

The BRICS leaders are asserting a view shared by many in the developing world, with emphasis on the Doha round as fundamental to “correct the development deficit in terms of trade gains,” says Ravi Ratnayake, director of trade and investment at the Economic and Social Commission for Asia and the Pacific (ESCAP), a Bangkok-based U.N. regional body.

“Developing countries want to profit more from global trade, which developed nations have dominated for many decades.”

BRICS nations are perfectly positioned to secure a deal favourable to the developing nations, “since they represent the most powerful developing countries in the world and consequently have a powerful voice,” he told IPS.

Together the countries of this new grouping cover nearly 25 percent of the world’s surface area, are home to 40 percent of the planet’s population, and accounted for close to 16 percent of the world’s 62 trillion dollar economy in 2010.

From 2001 – the year when Goldman Sachs economist Jim O’Neill coined the acronym BRIC to highlight the rise of four major emerging economies (minus South Africa then) – till 2010, trade amongst BRICS nations has risen 15 times. It is now estimated to be 230 billion dollars.

By 2050, some analysts say BRICS is poised to become the dominant global economic player, dethroning the long dominance of the G-7, the club of richer, industrialised nations including France, Germany, Italy, Japan, Britain, the United States and Canada.

The battle lines between the G-7 and the developing world have been stark at the WTO, where negotiations for a new round began in 2001.

Trade representatives from China, India and Brazil have stood their ground at the WTO, reminding their counterparts from the U.S. and Europe that this ninth round of global trade talks since a new trade regime emerged after World War II had a special mandate to improve the economies of the developing nations by offering them benefits of participating in the global multilateral trading system.

“In order to save the (Doha) round, China is still trying its hardest to take part in the negotiations of various forms in a constructive manner, as long as those negotiations will not challenge the Doha mandate for developing countries,” Yi Xiaozhun, China’s ambassador at the WTO’s trade negotiations committee said in a statement Mar. 29.

“Developing countries have been frustrated that there is little development content left in the proposals on the table,” writes Martin Khor, executive director of the South Centre, a Geneva-based think tank, in the organisation’s mid-April bulletin.

“At the recent WTO meetings, Brazil, South Africa and India have made strong statements on why it is unfair to expect them to undertake extreme commitments that would ruin their domestic economies, especially when there are no extra concessions being offered by the developed countries that are making these new demands.”

BRICS economies appear in no mood to reduce their tariffs to permit a flood of industrial, chemical, engineering and electronic goods from the G-7 into their markets, while the G-7 economies retain their heavily subsidised agriculture sectors.

“Real cuts in agriculture subsidies in rich countries were supposed to be the priority aim of the Doha talks, when they started in 2001,” argues Khor. “It’s quite clear that is not going to happen, given their entrenched farm interests.”

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