BRICS to enhance trade, economic cooperation

The volume of trade between Russia and BRICS countries in 2013 grew by just 0.5 percent, to $105.4 billion, which is about 12 percent of the total foreign trade of Russia. Source: Sergey Krasnouhov / RIA Novosti

The volume of trade between Russia and BRICS countries in 2013 grew by just 0.5 percent, to $105.4 billion, which is about 12 percent of the total foreign trade of Russia. Source: Sergey Krasnouhov / RIA Novosti

At the up-coming summit, officials will chart out a BRICS Economic Cooperation Strategy, which is a major initiative from Russia.

On July 14, economic cooperation will be high on the agenda at the BRICS meeting in the Brazilian city of Fortaleza, a source from the Russian Ministry of Economic Development of Russia told RIR. Officials will discuss ways to expand trade, especially in high-value goods. A joint declaration, which was initiated by the South Africans, is almost ready, the source told RIR. Moreover, proposals and initiatives of Russia, China and South Africa to further expand trade and investment cooperation will be considered at the meeting.

In addition, officials will discuss a project on a BRICS Economic Cooperation Strategy, which is a major initiative from Russia. Moscow initiated the development of the project after the BRICS Summit in Durban. Experts have analyzed the national strategies of the individual participating countries and, out of necessity, have taken into account the most complementary areas while preparing for the project. The Russian Ministry of Economic Development is optimistic that the strategy will be approved by leaders of the grouping at the 2015 BRICS summit in Ufa.

“Priority areas of cooperation between the participating countries, which are enshrined in the Strategy project, are trade and investment, manufacturing and mining, energy, transport and logistics, agriculture, innovation, and technology exchange,” a source told RIR. “We believe that these areas will be those ‘points of growth’ that will allow BRICS countries to strengthen their position in the world economy and enable them to cope with crises better.”

The source did not disclose other details of the strategy document, warning that a “Made in BRICS” label may be premature. “The circulation of goods under a single label implies a common market in the classical sense with all the associated attributes and institutional framework. BRICS is a relatively young union, and we still have quite a few steps left before realizing the serious potential of our cooperation,” he said.

In addition, the ministerial meeting will discuss the development of cooperation in the field of electronic commerce. The purpose of this initiative is the creation of a barrier-free environment for the development of e-commerce between partner countries. Analysts polled by RIR, however, were sceptical that the development of such an e-commerce project could significantly affect trade turnover within the grouping. Trade in consumer goods over the Internet is already under way (for example, Chinese online shops actively sell their goods in Russia). “E-commerce began to flourish only at the beginning of the 21st century. Currently, however, it only accounts for a maximum of 5 percent of trade, so there is no reason to suspect that the development of e-commerce will seriously affect trade between BRICS countries,” said Roman Andreeshche, Associate Professor, at the Department of Foreign Area Studies and the RANEPA International Cooperation.

A source from the Russian Ministry of Economic Development said discussions are planned at a ministerial meeting in China for a Framework Agreement to strengthen economic cooperation and a plan of action for trade and investment. South Africa proposes to consider the outcome of its presidential elections in conjunction with a seminar on investment agreements. Following the meeting, there will be a joint communiqué.

It is assumed that during the visit of the Russian delegation to Brazil issues of bilateral cooperation will also be raised. In particular, on the sidelines of the meeting, ministers are expected to sign the plan of action for the development of trade and economic cooperation between Russia and Brazil in 2014-2015. The document provides for joint steps for cooperating within the framework of mutually advantageous projects, strengthening interregional cooperation and the exchange of business missions, the participation of Russian and Brazilian businessmen in international fairs and exhibitions, as well as in other business ventures.

According to official statistics, the volume of trade between Russia and BRICS countries in 2013 grew by just 0.5 percent, to $105.4 billion, which is about 12 percent of the total foreign trade of Russia. The results of the first four months of 2014 give us hope that this year we will not see a reduction in overall numbers. From January-April 2014, the volume of trade reached $33.5 billion. BRICS participants have made significant progress in the formation of joint institutions, which in the future should strengthen cooperation. In particular, we are talking about the formation of a developmental bank and a pool of foreign exchange reserves. Currently, an initiative is being developed to create a pool of reinsurance.

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