Rule Making on New Issues and Possible Common Position of BRICS

Rule Making on New Issues and
Possible Common Position of
CUTS International
BRICS-TERN Annual Meeting
New Delhi, 27 March 2012
Flow of Presentation
1. Trade and Climate Change: Issues and way forward
2. Trade and Food Security: Issues and way forward
3. Trade, Debt and Finance: Issues and way forward
1. Trade and Climate Change
• Unilateral Trade Measures
• Climate Protectionism and Border Measures
• Technology Transfer and Environment Goods and Services
• Carbon Labelling
2. Trade and Food Security
• Since Doha Round, major fluctuations in world food market
has been witnessed leading to phenomenal rise of food prices,
causing immense harm to some of the world’s poorest
countries, especially those highly dependent on food imports
• As the FAO noted in its recent Food Outlook, higher food
prices in 2010-2011 increased the food import bill of the
world’s least developed countries by over one-third from the
previous year
• Subsidies by OECD countries account for over 90 per cent of
trade-distorting domestic support and export subsidies reported
to the WTO
The Action Plan 2012-2016 for Agricultural Cooperation
among BRICS Countries provides for the following:
• The BRICS countries shall make commitment to promote
trade and investment cooperation between agricultural
enterprises, and encourage and assist enterprises of respective
countries to participate in the economic and trade promotion
activities held by the BRICS countries
• To promote market infrastructure by designing and developing
supporting facilities
• To explore the possibilities of increasing the value of
agricultural trade and investment
• By 2080, cereal imports by developing countries will increase
by 10-40 per cent and much of this increase will occur as a
result of decline in agricultural productivity and production
due to climate change and other factors (Fischer et al., 2002)
• Importantly, since many of today’s food sufficient countries
are expected to become net food importers, the criticality of
this issue cannot be undermined.
• Also, since food exports restrictions are detrimental for both
rich and poor countries in the long-run, and given the fact that
there is no common Southern voice on the same, BRICS
seems to be well-positioned to build a common position on
this issue.
3. Trade, Debt and Finance
• Trade, debt and finance have emerged as a new issue and need
to be seen in the light of the provisions of Paragraph 36 of the
Doha Ministerial Declaration and Paragraph 42 of the Hong
Kong Ministerial Declaration.
Trade and Finance: Issues and way forward
• Exchange rate Volatility
• Financial Flows
Trade and Debt: Issues and way forward
• Establishing a sound mechanism of relating trade with debt is
important as most developing countries and emerging
economies are faced with burdens of huge external debt
• Also, to establish a complementarity between initiatives to
reduce indebtedness and to improve market access for least
developed countries, trade and debt, and indebtedness should
be seen within the larger aid architecture
• It may be noted that international borrowings are equivalent to
deferred trade, even when it is purely speculative
• A major concern among developing nations is the issue of
financial protectionism, which is deemed to rise in a scenario
defined by a plethora of factors like debt crisis, fragile banking
and securities sectors, tighter lending standards, increased
capital reserve requirements, and government pressures on
banks to lend more domestically rather than overseas.
• So, BRICS need to develop a common possible position or a
Southern voice on various aspects of trade, finance and debt
and especially those on protectionism during periods of crisis.