The creation of an institutional framework to strengthen business cooperation among the expanded group of Brazil, Russia, India, China and South Africa (BRICS) countries is on the cards. A proposal leading to the formation of such a framework received the endorsement of all BRICS trade ministers, who met here today to discuss ways of deepening economic cooperation and trade in the region.
The trade ministers, who met for the first time under the BRICS umbrella for about 90 minutes, were Anand Sharma from India, Chen Deming from China, Robert Davis from South Africa, Fernando Pimentel from Brazil and Viktor Khristenko from Russia.
No time frame for the creation of the institutional framework was set at the meeting, but the trade ministers agreed that to start the process they should first set up a liaison group, which will analyse the current economic co-operation and trade among BRICS countries and assess its future.
This, they said, would lead to the creation of an institutional framework that would also look at the scope for broader South-South co-operation with other developing countries. The significance of the proposed institutional framework is that the BRICS trade ministers mooted it in the wake of their commitment to oppose all manifestations of trade protectionism and intensify co-operation by expanding mutual trade and investment.
The trade ministers meeting took place a day before the BRICS Summit scheduled for Thursday, when Prime Minister Manmohan Singh along with Chinese President Hu Jintao, Brazilian President Dilma Rousseff, Russian President Dmitry Medvedev and South African President Jacob Zuma will discuss ways to strengthen their co-operation and assess the current international economic situation and other developmental issues.
There were three other significant outcomes of the trade ministers’ meeting. One, the ministers reiterated their support for Russia to join the World Trade Organisation or WTO in 2011.
All trade ministers observed that Russia’s exclusion from the multilateral trading system was unreasonable, particularly because almost 18 years have lapsed since the country had applied for joining WTO. They also were of the view that Russia’s accession would make the WTO more representative and expand the influence of the multilateral trading system.
Russia is a major player in the oil trade and the BRICS countries are now expected to press for Russia’s inclusion as a WTO member at the next round of negotiations in Geneva by first resolving all pending issues in the matter.
China became a WTO member in 2001 and Russia’s accession would create an even stronger group within the international trade body, which is now stuck with the inconclusive Doha round of trade talks. Not surprisingly, the second major decision taken by the BRICS trade and economic ministers pertained to the reiteration of their commitment to the conclusion of the Doha round of negotiations, keeping in mind the interests and concerns of the poorest countries, especially the least developed countries.
They regretted that there was a risk of upsetting the delicate balance of trade-offs achieved over 10 years of negotiations in the draft texts of December 2008. They would like those draft modalities to remain the basis of concluding the Doha round. South African trade minister, Robert Davis, even said there was no scope for any alternative round, if WTO could not conclude the development round of trade negotiations to the satisfaction of developing countries.
The third decision was to remain united in their call to all the countries in the world to strengthen co-ordination on macro-economic policies in order to secure world economic recovery and achieve robust, sustainable and balanced growth. This arose from their assessment that the global financial crisis and the stimulus policies introduced by the developed countries had created new problems like economic overheating, inflationary pressures and asset bubbles for the BRICS countries.
Adding to this problem was the uneven global recovery, made worse by recent turmoil in West Asia and North Africa and the impact of earthquake and tsunami in Japan.
