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Partnership (TTP), Transatlantic Trade and Investment Partnership (TTIP) and 

others, have also presented the BRICS nations with new challenges, which need 

to be carefully studied.

TABLE 10

Progress and sticking points on trade negotiations in the Doha Round

Progress

The Doha Round subsequently became the Bali Agenda. 
Agreement at Ministerial Conference includes ten texts which comprise the Bali Package; these include 
in relation to: Trade Facilitation; General Services; Public Stockholding for Food Security Purposes;  
Understanding on Tariff Rate Quota Administration; Export Competition; Cotton; Preferential Rules of 
Origin for Least Developed Countries; Operationalisation of the waiver concerning preferential treatment 
to services and services suppliers of least developed countries; duty-free and quota-free market access 
for least developed countries; and a monitoring mechanism on special and differential treatment.

Sticking points

Liberalisation in the agricultural sector and food security issues.
Food security and the issue of public stockholding, although there is a formal commitment to address them.
Still no binding commitments on export subsidies in agriculture, although this is a priority area for the 
post-Bali work programme

Divergence in positions

Regarding the single undertaking and further liberalisation, there is a clear divergence in positions 
between developed countries and emerging economies (e.g. the United States versus India). The developed 
countries wish to move further and faster than developing countries. 
Agreement has been reached on the Bali Agenda, and in particular resources made available for trade facilitation. 
No divergence in positions is apparent. 
Some countries are negotiating for an international services trade agreement. 
Still disagreement over treatment of the United States and the European Union subsidies versus Indian safeguards. 

Table 11 presents the evolution of preferential trade agreements (PTAs) and 

regional trade agreements (RTAs) signed by BRICS, the United States and the European 

Union since 2000. The European Union can be seen to have the largest number of RTAs 

and PTAs in force. As influential regional powers, the BRICS countries have made 

significant progress in regional and inter-regional trade and economic cooperation.

TABLE 11

PTAs signed by BRICS, the United States and the European Union

Country

FTAs in 2000 

FTAs in 2005 

FTAs in 2010 

Present number of FTAs

Brazil

4

4

5

5

Russia

13

14

15

16

India

3

7

14

16

China

1

5

10

11

South Africa

3

4

5

5

European 
Union

17

24

33

38

United States

6

10

15

18

Source: WTO database. 
Obs.: Totals are cumulative; date of entry into force used.

Both China and India have signed free trade agreements (FTAs) with the 

Association of South East Asian Nations (Asean) and played important roles in 

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the ASEAN+6 mechanism. Brazil has been actively promoting and participating 

in the Latin American integration process. As early as 1991, it established a 

common market along with Argentina, Paraguay and Uruguay, and it has continued 

to play a leading role in economic integration. While South Africa succeeded in 

promoting the Southern African Development Community (SADC), it was active 

in integrating the Common Market for Eastern and Southern Africa (Comesa) 

and East African Community (EAC) into a free trade zone covering 26 countries 

from eastern and southern Africa. South Africa has also been actively promoting 

the FTA negotiations between the Southern African Customs Union (Sacu) and 

the common market of South America.

Russia joined the WTO in 2011, which is relatively late compared to the other 

BRICS nations. Before that, Russia was active in trade and economic cooperation 

under the framework of the Commonwealth of Independent States and the Shanghai 

Cooperation Organization (SCO). On 27 November 2009 the Heads of State of 

Russia, Belarus and Kazakhstan signed the Customs Code of the Customs Union, 

marking the official establishment of a customs union between the three countries 

within the framework of the Eurasian Economic Community. This Customs Union 

plans to launch FTA negotiations with more than thirty countries worldwide. 

In addition, there are more than thirty Arab and Latin American countries that have 

proposed the establishment of free trade with this Customs Union.

In terms of bilateral cooperation between BRICS countries, cooperation 

between China and Brazil is the most extensive. Since the global financial crisis, 

China has replaced the United States as Brazil’s largest trading partner. These two 

countries have closely cooperated in a variety of fields including public policy, 

defence, science and technology, water conservation, quality inspection, sports, 

education, agriculture, energy, telecommunications, aviation etc. In Latin America, 

China has also established strategic partnerships with Mexico and Argentina and 

signed FTAs with Chile, Peru and Costa Rica. China and India have completed 

a report on the feasibility of establishing a bilateral FTA. China is conducting a 

trade facilitation process with Russia, and negotiations with Sacu are in progress. 

India has already signed bilateral FTAs with South Korea, Singapore and Thailand 

and chose to negotiate with smaller economies such as Pakistan, Sri Lanka, Nepal, 

Maldives and Chile for the establishment of bilateral FTAs.

By optimising their tariff structure, the BRICS countries can raise the level 

of trade facilitation, enhance export promotion via exhibitions, seminars and 

symposiums, organise investment and trade promotion missions, build chambers 

of commerce, and divulge specific real-time information.

The desire to integrate into regional and global production chains is a driving 

force today. It is not only manufacturing that is important in climbing the ladder 

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of development, but also services, which account for a larger share of value in 

regional and global production chains. These factors tend to reinforce the role of 

the WTO in global trade regulation, although they also bring challenges that the 

multilateral trading system needs to address: given the negative effects of divergent 

and complex rules of origin present in regional agreements, multilateral negotiations 

may be more effective and beneficial in facilitating global production chains. 

Developing countries have now become an important part of global production 

chains and have rapidly integrated into the tide of global production since the 

1990s. Especially after the computer and information technology revolution in 

Europe and the United States, BRICS countries have become more integrated 

into the global division of labour. 

Industrial development in BRICS nations has contributed to this upgrading 

process. By improving infrastructure and attracting foreign direct investment 

(FDI), China actively pursued the development of its manufacturing industries 

and has since become the world’s factory. India developed a software-outsourcing 

service by leveraging its competitive advantages in language and labour cost, and 

became the world’s office. Russia, Brazil and South Africa took full advantage of 

their natural resources, becoming suppliers of energy, resources and raw materials.

There are no conditions for a complete value chain to form within the BRICS 

countries, which requires future breakthroughs if they want to maintain their 

current momentum of development. Hence, BRICS countries should develop a 

good communication and coordination mechanism and deal with possible mutual 

competition issues in the global value chain among the BRICS countries. 

They should coordinate their industrial development strategies, with better alignment 

of their policies towards industrial safety, investment etc.

2.3 Intra-BRICS direct investment

The share of BRICS nations in global direct investment inflows increased from 

11 per cent before the 2007 crisis to 21 per cent in 2013. Their share in global 

outflows was 6 per cent in 2013 (UNCTAD, 2014). China ranked first among 

BRICS countries both in terms of attracting FDI and in terms of Outward Direct 

Investment (ODI) in 2013. In terms of FDI inflows, Russia ranked second, followed 

by Brazil, India and South Africa. It is worth mentioning that China, Russia, Brazil 

and India were among the top twenty host economies for FDI inflows in the world. 

As far as ODI is concerned, Russia ranked second, with Brazil next, followed 

by India and South Africa. China and Russia were among the top twenty home 

economies for ODI outflows (ibid.).

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In recent years, India has increased its FDI and provided a large number of 

world-renowned multinational corporations. Russia’s overseas investment mainly 

concentrates on industries where it has comparative advantages, such as oil, gas, 

metallurgy and mining. However, mutual investment among BRICS countries 

remains relatively small.

According to UNCTAD (2014), FDI associated with the BRICS countries is 

expected to grow by more than ten times within the 21

st

 century. Mutual investment 

between the BRICS countries will become a new area for pragmatic cooperation. 

Intra-BRICS investment is mostly “resource-seeking”. The five countries should 

try and alter this profile, since productive complementarity may demand other 

types of FDI. 

2.4 Financial issues 

The BRICS currencies have been gradually gaining in importance. According to 

the latest Bank for International Settlements (2013) survey, the renminbi was the 

ninth most actively traded currency, with 2.2 per cent market share in 2013, a 

significant increase from its 35

th

 place in 2001. The Russian ruble was the next 

most traded BRICS currency, in 12th position worldwide, accounting for 1.6 per 

cent of global trade. The South African rand, Brazilian real and Indian rupee were 

in 18

th

, 19

th

 and 20

th

 position, respectively.

BRICS nations should set up research collaboration on enabling conditions 

for internationalisation of their respective currencies, such as transparency and 

capital account convertibility. 

On 23 June 2011 the People’s Bank of China, authorised by the State Council, 

signed a new bilateral local currency settlement agreement with the Central Bank of 

the Russian Federation. Chinese and Russian bilateral local currency settlement will 

cover not only border trade but also general trade with expanded geographic areas. 

According to the new agreement, economic entities from both countries will be able 

to conduct settlements and payments for trade in goods and services with a currency 

of their choice: either a freely convertible currency, the renminbi or the ruble. 

China and Brazil signed a $ 30 billion currency swap deal on the sidelines of 

the fifth BRICS summit in South Africa, so that normal trade operations between 

the two nations can be guaranteed if a future financial crisis affects global liquidity.

The fourth BRICS summit in India concluded the Master Agreement on 

Extending Credit Facility in Local Currency and the Multilateral Letter of Credit 

Confirmation Facility Agreement between export-import and development banks 

within the BRICS Interbank Cooperation Mechanism including settlements. 

This Mechanism would serve as a useful instrument for cutting trading costs and 

enhancing intra-BRICS trade and investment in coming years.

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BRICS countries should seek to jointly construct a platform for dialogue 

on monetary and fiscal policies and expand the spaces for monetary policies. 

They should participate fully in the formulation of international financial standards and 

rules, make the best use of achievements in international financial reform, and 

implement international standards to achieve internal reforms and to improve 

their own standards of financial rigour.

In the future, BRICS nations are supposed to continue to enhance their 

financial ties by boosting investment exchanges, expanding currency swaps, 

encouraging trade settlement in local currencies and promoting convertibility 

among their currencies to prevent capital outflows.

3  OTHER ISSUES TO FOSTER BRICS COUNTRIES’ COMPETITIVENESS AND 

COMPLEMENTARITY

3.1 Agriculture

It is important that BRICS countries expand their cooperation in agriculture. Since 

they are all coastal countries, they could also actively expand cooperation in the 

fisheries sector to explore growth opportunities in the blue economy. To comple-

ment each other’s advantages and achieve common development, they could join 

forces in fields such as the production, storage and trade of agricultural products, 

logistics and technology from a resource complementarity, technology exchange 

and industry cooperation perspective. 

As the most advanced of the BRICS countries in agricultural science and 

technology, Brazil could offer a platform for other countries to learn from its 

experiences in agricultural technologies and environmental protection and regularly 

hold experience-sharing activities. This should be met by technology sharing in 

other, non-agricultural areas.

By launching information-sharing and communication activities centring on 

common issues in agricultural development, exchanging agricultural information 

regularly, setting up an agricultural information and digital agriculture platform and 

by building an information exchange mechanism, BRICS countries can gradually 

enrich and perfect their food security information systems.

Communication and cooperation can be enhanced in fields such as advanced 

agricultural technologies, equipment and technical personnel. In the process of 

mutual learning, absorbing each other’s advanced technologies and technological 

innovation, special attention could be paid to the following aspects: enhancing 

the research and development of new high-quality, high-yield and disease-resistant 

species; developing new styles of agriculture featuring low water intensity, farmland 

protection and green manufacturing; and promoting the establishment of a 

resource-saving and environmentally friendly agriculture.