Category Archives: The BRICS

Threatening a ‘Single International Community’

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Who would think that the threat to the global order could emanate from global summitry leadership. But that appears to be a real possibility. Let me explain.

For some time now at CWD and the Global Summitry project (GSP) we have identified that sustaining global order requires the maintenance, even strengthening of a ‘single international community’. Stability cannot be sustained without such a community. Fragmentation hinders collaboration. But that single international community is being challenged today. The current wars in Europe and in the Middle East undermine a single international community.  Rising geopolitical tensions between the leading powers, China and the United States, especially, erode it. Fragmentation then undermines stability of the order and diminishes, or eliminates,  opportunities for advancing global governance.  As described in the WPR Daily Review:

These tensions were underlined recently by statements from the President of Brazil, Luiz Inácio Lula da Silva, better known as Lula, now the host for this year’s G20. In an opinion piece he published in the Washington Post in January Lula described the impact of geopolitics and nationalism on global governance efforts:

The world is experiencing a contradictory moment today. Global challenges require commitment and cooperation among nations. We have never been so connected. At the same time, we are finding it increasingly difficult to dialogue, respect differences and carry out joint actions. Societies are taken over by individualism and nations are distancing themselves from each other, making it difficult to promote peace and face complex problems: the climate crisis; food and energy insecurity; geopolitical tensions and wars; the growth of hate speech and xenophobia.

Such a statement seems to suggest that Lula really gets it. Only a single international community can maintain a stable global order. But that may not be true. In fact Lula’s recent statements may be undermining such a goal. Why such statements are unclear. Some have suggested that he is determined to promote a different global order no longer dominated by the US and the West more broadly. Others focus on his imperatives in current domestic politics. Whatever. Nevertheless his recent comments over the War in Gaza may make it difficult to promote collective efforts in this critical Informal – the G20. One need only reference Lula’s view of Israel’s action in Gaza expressed by him in remarks at the African Union Summit Conference in Addis Ababa and reported in the NYTimes:

What is happening in the Gaza Strip with the Palestinian people has no parallel in other historical moments,” Lula told reporters during the 37th African Union Summit in Addis Ababa, Ethiopia. But, he then added, “it did exist when Hitler decided to kill the Jews.

And now as a result of these remarks his global summitry leadership efforts – and here I am focusing on his G20 efforts as the President – are being called into question. Rather than trying to knit the order together he apparently seems willing to fracture it.

Such a rupture of the international community is possible notwithstanding a promising start as G20 host. Indeed at the time of the transfer of hosting to Brazil, Lula set out important developmental priorities in a speech at the closing of the India G20 Summit. There he declared:

We are living in a world where wealth is concentrated. In which millions of people still go hungry. In which governance institutions still reflect the reality of the middle of the last century.

We will only be able to tackle all these problems if we address inequality.

Income inequality; inequality in access to healthcare, education and food; gender, race and representation inequality is behind all these anomalies.

If we want to make a difference, we must place the reduction of inequalities at the center of the international agenda.

Thus, Brazil’s G20 presidency will have three priorities:

(i) social inclusion and the fight against hunger;

(ii) energy transition and sustainable development in its three aspects (social, economic and environmental); and

(iii) reform of global governance institutions

All these priorities are contained in Brazil’s G20 presidency motto: “Building a fair world and a sustainable planet”

In advancing these priorities Lula announced  that Brazil would establish two G20 Task Forces (TF) for the Brazil hosting year. These TFs will unite the Finance and Sherpa tracks in a concerted effort to advance global governance policy. The two are: the Global Alliance against Hunger and Poverty, and  the Global Mobilization against Climate Change.

And in addition in the Concept Note Brazil also committed to the  following:

Seeking to close this gap, Brazil plans to launch a G20 Initiative on Bioeconomy with the objective of deepening the international debate on the subject and of identifying potential avenues for cooperation in the area. The Initiative would be structured into three axes: (i) research, development, and innovation for bioeconomy; (ii) sustainable use of biodiversity for bioeconomy; and (iii) bioeconomy as an enabler for sustainable development. As a final result,  the Initiative would be expected to produce a set of “High Level Principles on Bioeconomy.

All these priorities and institutional efforts require concerted collective action. Yet today all these promises seem to be in question over Lula’s statements on the current geopolitical crises, notwithstanding Lula’s injunction in his speech at the closing of the India G20 Summit that:

Thirdly, we cannot allow geopolitical issues to hijack G20 bodies’ discussion agendas. A divided G20 does not interest us. We can only tackle present day challenges through joint action.

Lula needs to heed his own words or he will find that his G20 leadership is undermined by his own words. Such words put at risk his determined collective priorities in the G20. They divide the international community putting at risk ‘a single international community’.

Image Credit : Brazil

This Post was first published at my Substack Alan’s Newsletter

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Troubles with Global Summitry

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We are definitely in the midst of Global Summitry gatherings. With the BRICS Summit just recently ended, we are deep into the G20 weekend gathering in New Delhi. So much commentary has accompanied these summitry gatherings. But I caution casual observers and readers: there are way too many assessments and conclusions drawn by all those folks that unfortunately barely pay attention to Global Summitry through much of the year. You can see this in the various ‘hair on fire’ commentaries in the assessments and consequences of the actions of key players in both the BRICS and now especially with the G20. Too many declarations of the G20 demise; firm conclusions that China and Russia would block any consensus statement that sought to condemn Russia’s aggression against Ukraine; the fragmentation of global summitry with the rise of the BRICS plus and the demise of the G20 with leaders from Russia and China choosing to absent themselves from summit.

Now don’t get me wrong, the geopolitical pressures, particularly rising US-China competition and opposition and condemnation of Russia for its unprovoked aggression on Ukraine are impactful. The geopolitics has seemingly hindered the G20 in advancing global governance policies. Yet the global governance agenda and goals remain. Look at the G20 agenda as described by Damien Cave in the NYT:

The agenda in New Delhi includes climate change, economic development and debt burdens in low-income countries, as well as inflation spurred by Russia’s war in Ukraine. If members can reach consensus on any or all of these subjects, they will produce an official joint declaration at the end.

In the ‘hair on  fire’ camp here is a piece by Alec Russell in the FT

The countdown to the talks was dominated by news that Xi was not going to attend. This was widely seen as a major blow to the G20, and an acceleration of the shift to a world in which a China-led bloc is facing off against a US-led one, with many countries hovering in the middle.

But the collective global governance effort has not been stymied. Indian efforts to reach consensus have proven successful. The G20, thanks to India, has released the Declaration a day early. Our good fortune. As described by the Indian Sherpa the Declaration was:

… a complete statement with 100% unanimity” that highlights India’s “great ability to bring all developing countries, all the emerging markets, China, Russia, everybody together at the same table and bring consensus.

He went on:

Urging adherence to the United Nations Charter, the New Delhi statement says: “All states must refrain from the threat or use of force to seek territorial acquisition against the territorial integrity and sovereignty or political independence of any state. The use or threat of use of nuclear weapons is inadmissible.

So there we are, a consensus statement has been issued. As often is the case, the document was not short, some 29 pages of declaration plus pages of annex.  Nevertheless it ended on a ‘high note’:

81. We reiterate our commitment to the G20 as the premier forum for global economic cooperation and its continued operation in the spirit of multilateralism, on the basis of consensus, with all members participating on an equal footing in all its events including Summits. We look forward to meeting again in Brazil in 2024 and in South Africa in 2025, as well as in the United States in 2026 at the beginning of the next cycle. We welcome Saudi Arabia’s ambition to advance its turn for hosting the G20 Presidency in the next cycle. We also look forward to the Paris Olympic and Paralympic Games in 2024 as a symbol of peace, dialogue amongst nations and inclusivity, with participation of all.

But a reading of the Declaration raises again the question: what success has in fact been achieved? As Caves points out:

But how much progress has the G20 made toward its ambitions? And what can be expected from this year’s meeting in India on Saturday and Sunday? … Then what? Often, not much, when it comes to real-world results. Most of the grouping’s joint statements since it formed in 1999 have been dominated by resolutions as solid as gas fumes, with no clear consequences when nations underperform.

‘Solid as gas fumes’. Well, in many respects the Declaration is no more than a statement of collective progress – what have we collectively identified as worthy of committing to and implementing. And, I did note, in an earlier Substack Post, Not Simply the Pace of Summitry that Leaders and their official are working toward commitment but:

So, let me at least raise in this Post, what I believe is the ‘continuum of action and commitment’ available to leaders in these various Leaders’ Summits. This continuum identifies the extent to which global governance policies have been secured. We move from the aspirational, often set out in the leaders’ declarations or communiques all the way to implementation by a country. What is evident from the continuum is that these folks are governmental leaders. And, as a result no matter what the communique announces, individual leaders’ may, or may not, actually implement a collective wish set out in a declaration.  This is well beyond just the aspirational.

The continuum, as I see it, is:  Consultation/ Cooperation/ Coordination/ Collaboration – the 4Cs of global governance progress, as I see it. Distinguishing between these concepts can be quite difficult. And of course, beyond this is, collectively achieving the actions, proposals and policies that are set out in the communiques, or announced at the Leaders’ gatherings.

And that is paydirt. Collectively achieving the actions set out in all these Summit Declarations – implementing policy in other words – is global governance success. Such implementation lies generally at the national political level, although there are instances where international organizations do in fact implement.

Bottom line: it requires a lot more than a statement in a Leaders’ Declaration to achieve global governance progress. But a number of us are watching including my colleagues at the CWD process.

This Post was originally uploaded to my Substack – Alan’s Newsletter. Feel free to subscribe.

Image Credit: Al Jazeera

 

 

BRICS Confusion is Rather Evident

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Well, though still in the weekend, I must admit this Post is a bit late, though still available, I hope, for an enjoyable weekend read.

So, I was not planning to target the BRICS South Africa gathering a second time in this Alan’s Newsletter Post, at least not quite this soon. However,  the decisions taken, or not taken in some cases at this most recent BRICS Summit in Johannesburg South Africa was too ‘juicy’ to ignore.  As pointed out by Rajiv Bhatia of India’s Gateway House now, more than ever the diplomatic balancing act for the new and enlarged BRICS presents an even more dramatic challenge for this Leaders’ Summit:

As BRICS heads into its 18th year, [the South Africa Leaders’ Summit is the 15th] its success and way forward will depend on the members’ ability to tackle the principal challenge of retaining its internal solidarity while balancing expansion and its impact and influence in the world.

And that central point – retaining its internal solidarity while balancing expansion – is hard to foresee. There is confusion over who was chosen to add and indeed whether they have agreed to join, and what conditions; there is confusion over the choices themselves; and there is confusion over what the enlargement is likely to mean for this Leaders’ Summit.

It is evident that the enlargement has added heft to an already significant leaders’ group. As Bhatia points out:

As a grouping of five nations, BRICS represents 27% of the world’s land area, 42% of the population, 16% of international trade, 27% of global GDP in nominal terms, and 32.5% in PPP terms.

Now the group, according to, Bhaso Ndzendze in The Conversation , is:

The enlarged grouping will account for 46.5% of the world population. Using IMF GDP data, we can deduce that it will account for about 30% of global GDP.

On a PPP basis apparently, it will represent 37 percent of global GDP according to James Kynge in the FT.

So, six countries were identified as joining the BRICS come January 2024: Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and Iran. JIm O’Neill, formerly of Goldman Sachs,  who has been tagged for creating the BRICS acronym suggested this about the enlargement:

… I have questioned the organization’s purpose, beyond serving as a symbolic gesture. Now that the BRICS has announced that it will add six more countries – Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates – I pose the question again. The decision, after all, does not appear to have been decided on any clear objective, much less economic, criteria. Why, for example, was Indonesia not asked? Why Argentina and not Mexico, or Ethiopia and not Nigeria?

All good questions. Now the list, I would suggest, seems to reveal that China and Russia prevailed in the choices agreed to. Why, I suspect that is, is the BRICS enlargement includes Iran. As the NYTimes pointed out in its article on BRICS expansion:

The inclusion of Tehran — which has antagonistic relations with China’s chief rival, the United States — suggests that Chinese and Russian pressure had succeeded over the qualms of members like India, Brazil and South Africa, which maintain friendly ties with the West.

It is not unreasonable to suggest that adding Iran can only heighten the geopolitical tensions between the BRICS and others – most notably the G7, and most particularly the US with its many Iran sanctions.

Nevertheless, the hosts and commentators as quoted in the NYTimes again, tried to put the best face on it:

… South Africa, sought to put a hopeful spin on the enlargement decision in any case.

Anil Sooklal, South Africa’s representative in the BRICS negotiations, told reporters that the group needs to change with the times. “This is what BRICS is saying, let’s be more inclusive. BRICS is not anti-West,” he said.

And then of course there is the boosterism from the South Africa President, Cyril Ramaphosa as well (FP):

BRICS has embarked on a new chapter in its effort to build a world that is fair, a world that is just, a world that is also inclusive and prosperous,

As for Indonesia, an obvious choice for the BRICS to draw closer to ASEAN and Southeast Asia more  broadly. Why was it not part of the enlargement group? It would seem that Indonesia has not yet decided whether it wants membership. It has not submitted, apparently, a letter of intent. Also, it appears, notwithstanding the announcement that the UAE, in fact, has not decided whether to accept the BRICS invitation, though I suppose in the end it will.

And then there is – Argentina.  Argentina remains mired in a dreadful economic crisis. If in the end new members will be asked to contribute capital to the most important BRICS creation, in my opinion, the New Development Bank (NDB), Argentina is far more likely to ask for support than to be able to contribute support. In the end, I suspect it was Brazil and its current president, Lula that pressed for membership to be extended to Argentina.

As just noted, the most notable significant BRICS achievement, in my opinion, has been the creation of the NDB. There  was some indication that the expanded members would all be required to contribute to the NDB.  And that still may occur.  Still, it is disappointing that not more was mentioned of the NDB by the current announcements.

There was, also, a fair bit of reporting, and loud statements prior to the conclusion of the Summit, that suggested the BRICS might well take steps to create some form of common currency, or steps at de-dollarization by the BRICS. But as was pointed out by Henry Poenisch in OMFIF:

A declaration released at the gathering in Johannesburg on 24 August made no mention of a common currency and instead focused on bilateral clearing – the second-best option. It stressed the importance of ‘encouraging the use of local currencies in international trade and financial transactions between Brics as well as between their trading partners.’

Yet, it seems to me the enhanced use of local currencies, except possibly the Chinese renminbi, is a rather questionable proposition. Using some of the local currencies available, and then holding the surplus for future use doesn’t seem a rather appealing course of action.

Finally, what most commentators failed to point to in their descriptions of the enlargement of the BRICS is that two of the six new members – Argentina and Saudi Arabia – are already members of the G20, as of course are all of the original BRICS. Rather than contemplating the consequence of the enlarged BRICS for global policy progress, it strikes me targeting the efforts, and today’s evident hardships in advancing global governance in the face of rising geopolitics by focusing attention on the G20 might well be a more fruitful avenue of inquiry if one was examining global summitry and the efforts to advance global governance. Looking again, at Jim O’Neill he turns, not reasonably, in this direction:

What the world really needs is a resurrected G20, which already includes all the same key players, plus others. It remains the best forum for addressing truly global issues such as economic growth, international trade, climate change, pandemic prevention, and so on. Though it now faces significant challenges, it still can reclaim the spirit of 2008-10, when it coordinated the international response to the global financial crisis. At some point, the US and China will have to overcome their differences and allow the G20 to return to its central position.

This was originally posted at my Substack ‘Alan’s Newsletter’ You can view there and you are free to subscribe as well.
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Image Credit: France 24

Puzzling over BRICS Enlargement

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As Global Summits go, and besides the leader-led summits, G7 and the G20, there is nothing with greater presence, and possible impact in international relations, than the BRICS. As noted by Ndzendze, Bhaso, Siphamandia Zondo (2023) in their recent article in The Conversation on the state of the BRICS: 

What began in 2001 as an acronym for four of the fastest growing states, BRIC (Brazil, Russia, India and China), is projected to account for 45% of global GDP in purchasing power parity terms by 2030. It has evolved into a political formation as well.

It is the political impact that is most interesting and, I would say, somewhat puzzling. For the BRICS club – Brazil, Russia, India, China and South Africa – all are members of the G20.  Like the G20, and for that matter the earlier created G7, the BRICS represent a ‘leaders club’ that is a leader-led global summit that has an annual meeting of those leaders – the centerpiece of the year-long hosting by one member or another. In some respects the BRICS are unique in what the group is not. That is, unlike the G7, the BRICS members have no  evident ideological dimension – neither democratic nor autocratic. Instead it appears to see itself as focused on opposition to US hegemony in the current global order and they appear to demand a greater development focus and attention to the Global South. Again, as pointed out by Bhaso and Zondo: 

Crucial to this was these countries’ decision to form their own club in 2009, instead of joining an expanded G7 as envisioned by former Goldman Sachs CEO Jim O’Neill, who coined the term “Bric”. Internal cohesion on key issues has emerged and continues to be refined, despite challenges. … Ever since, the grouping has taken on a more pointedly political tone, particularly on the need to reform global institutions, in addition to its original economic raison d’etre. 

Now, it is not that there haven’t been efforts to enlarge these informal leader-led institutions  – to draw in the systemically important Global South players – China, India, Brazil – and other regional powers, Turkey and Indonesia for instance.  Obviously, the G20 is the evident case. Still, it would seem that the BRICS members resisted absorption in the G20, indeed, just at the G7 members – Canada, France, Germany, Italy, Japan, UK and the U.S., and also the EU, failed to wind up the G7 and ‘live’ in an enlarged G20 after the Global Financial Crisis (GFC) in 2008. Though there has been constant academic and expert discussion over absorption, enlargement and continuing separation, there continues to be both a G20 and a G7 a G20 and a BRICS. Again my SOAS colleagues focussing on the BRICS suggest: 

Some may even bring destabilising dynamics for the current composition of the formation. This matters because it tells us that the envisioned change in the global order is likely to be much slower. Simply put, while some states are opposed to western hegemony, they do not yet agree among themselves on what the new alternative should be.

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Scepticism Again Abounded Prior to the Opening of a G20 Leaders’ Summit – But Then …

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Alan Beattie, veteran G20 watcher from the Financial Times, has regaled us once again with reasons to dismiss G20 summits before they begin.  On November 14th,  a day before the Indonesian G20 summit begins in Bali, we are treated to the conclusion by him that the G20 is a “gabfest” and  that “it is what it always has been, which is largely pointless”! 

To prove his point,  Alan Beattie links us to his March 13, 2009, article , published a month before the London G20 summit, which was arguably the most important economic summit ever. Entitled “the gap of twenty”, he wrote back then rather definitively that “there should be little doubt…that the divisions seen on display have already dissipated the G20’s ability to spread confidence”.

The Indonesian G20 Summit has in fact demonstrated that without the G20 there would be no global leadership platform which could bring together a finite number of major actors in global affairs from an eclectic array of regions and regime types to address the war in Ukraine, US-China relations, and global systemic challenges. 

What Alan Beattie gets wrong in both 2009 and now more recently just prior to the Bali Summit is to fail to see that “domestic  constituencies “do indeed drive the “domestic calculus”.  The dynamics of global summitry are intended to push the frontiers of public discourses in order to mainstream ambition as good governance rather than to be an exercise in fancy pants diplomacy.  The term “gabfest” trivializes the efforts by global leaders and their officials, advisers and experts to provide societies with the vocabulary for understanding global risks and with vision for global solutions.   

What has gone on all year before the Leaders’ Bali gathering is the tedious developments of policy proposals that will work and the quest for pushing  feasibility frontiers to the maximum that domestic  and financial constraints will bear.   

The  G20 process is essential for global survival and for guiding global systems toward sustainability instead of disaster. The Indonesian Summit has underlined this critical point.

Image Credit: SMA Negeri 1 Singaraja

By Guest Blogger Colin Bradford who is lead-co-chair of the China-West Dialogue (CWD), co-chair of the Vision20, global fellow of the Berlin Global Solutions Initiative (GSI), and non-resident senior fellow of the Brookings Institution.

 

The Shanghai Cooperation Organization: “Symbolically significant”, for now

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The Shanghai Cooperation Organization (SCO) leader-led summit was held in Samarkand in this September. It brought global attention to the group first established by Beijing at the start of the 21st century. Not only was it Xi Jinping’s first trip outside the country since January 2020, with the ongoing war in Ukraine, but the meeting was also an opportunity for a sit down between Xi and Putin on the margins of the summit. That meeting was the immediate point of interest for the global media. In Samarkand, India’s PM Modi was openly critical of Russia as he tried to carve out a leadership position for the South Asian republic. While commentators noted that PM Modi did not hold a bilateral with President Xi indicating that the warmth of 2018’s Wuhan Summit between the two has not yet been rekindled.  Iran participated for the first time with the group now representing 40 percent of the world’s population and nearly a third of global GDP and all of which, barring India, are decidedly illiberal regimes.

While the SCO has more than two decades of existence, the summit is of interest not just because of the high-level leader diplomacy but on the peculiar qualities of a multilateral institution that is often neglected by Western scholars and analysts.

The SCO was established in 2001 by the People’s Republic of China (PRC) with the intention of providing stability to the former Soviet Central Asian spaces with a particular focus on cooperation to combat what the members called the ‘three evils’ of terrorism, separatism and religious extremism. This initial motivation reflected China’s broader concerns about counterterrorism and Islamic extremism in the early 2000s as well as long term anxieties Beijing has had about the threat to the Communist Party of China (CPC) rule at the peripheries of the China.

The initial work of the SCO focused on coordinating the members’ security policies and sharing information, as well as conducting regular military exercises. The group added narcotic trafficking to its counterterrorism agenda and began to talk about economic collaboration and had periodic rhetorical flourishes about global governance and international order. From its initial membership of: Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan, the SCO has expanded to include India and Pakistan in 2017and now Iran.

While the SCOs public diplomacy has been wide ranging, the group was, and remains at its heart, interested primarily on matters of international and transnational security. Yet as many analysts point out, Beijing and the members often appear disinterested in many quite obvious regional security matters, the most immediate example of which is the deadly clash between Tajikistan and Kyrgyzstan taking place barely 200 km from the current Summit which elicited neither comment nor action from individual leaders or the group as a whole.

Multilateral institutions often serve both symbolic and substantive functions. With the former, symbolic functions provide the opportunity to signal intent, represent collaboration and more broadly to perform statecraft. But substantive functions can provide the means to advance actual policy coordination and, in their more advanced forms, bind members into strict policy commitments, most famously exemplified by the EU and WTO. Most initiatives provide a blend of performance and policy as well as offering a platform at which ad hoc diplomacy can take place, such as the China-Russia meeting this year.

The SCO today is, however, a grouping that is long on symbolism and short on substance. At first glance it appears to be a good example of institutional balancing, that is when states use international institutions to balance against the influence of major powers. In this case the intention is to use the SCO to ensure that the US and its allies’ influence on the geopolitical dynamics in the Eurasian heartland is blunted. From this perspective bringing India into the fold was intended to hedge against Delhi’s growing alignment with Washington.

More broadly, it also represents a desire for a more multipolar and multimodal international order in which the North Atlantic powers have less influence; and liberal values are diluted as well.

While the symbolism is strong, and in the current moment it has particular salience given the Ukraine war illustrating starkly the clash between authoritarianism and democratic systems, there is little sign of the SCO making any meaningful progress on the substantive side of the ledger. One might be tempted to view the SCO as a nascent Central Asian NATO, yet the preferences of the key SCO powers remain low on concrete commitments as well as exhibiting not inconsiderable tensions between various members. At least for now, it is unlikely that the SCO will take any steps to move beyond the symbolic.

It is tempting, therefore, to write off the SCO as another example of shallow diplomacy in which grand statements of intent and photo opportunities are confused for actual statecraft. That is certainly true right now, but in the building of the foundations for collaboration among  influential and illiberal states in a geopolitically crucial zone of world politics, the members in general, and China in particular, have established a solid platform from which members may ultimately make good on their very real ambitions to transform the principles and practice of the regional order and possibly the international order.

Image Credit: YouTube

The March of Global Order

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This Post is a collaboration with Yves Tiberghien Professor of Political Science at UBC and RisingBRICSAM blogger Alan Alexandroff.both Principals at the Vision20. It underscores that key actors in Asia, Europe and elsewhere are not waiting on the United States to return to global collaboration and multilateral action.

Out of Asia there is a major push on various global governance fronts. The world is not waiting for the United States. And in fact Joe Biden, the President Elect and his people are going to have to think ‘hard’ about whether they are prepared to be ‘left behind’ in the march forward of various multilateral gatherings. Are the demands of domestic politics and the Democratic Party’s distaste for ‘free trade arrangements’ going to leave the Biden Administration lukewarm to rejoining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership or CPTPP? Lukewarm leaves the United States on the outside of efforts to integrate trade and investment in Asia and beyond.

While the Regional Comprehensive Economic Partnership (RCEP) is a limited integration of trade and investment, nevertheless the RCEP is the largest regional agreement concluded in Asia. The Pact covers 2.2 billion people and 15 countries . It includes China and other major economic actors including Japan and South Korea. As the NYTimes (2020) points out:

The pact will most likely formalize, rather than remake, business among the signatory countries. Its so-called rules of origin will set common standards to determine whether a final product qualifies for duty-free treatment, potentially making it simpler for companies to set up supply chains in several different countries.

While the RCEP lacks significant and needed steps to further liberalization and common regulation in key areas such as services trade, e-commerce, intellectual property protection and the elimination of manufacturing subsidies it is a key advance for the Asian region. As pointed out by Yves Tiberghien (2020) in a just published EastAsiaForum post:

RCEP will advance the acceleration of regional economic integration in Asia, and pushes back on Trump’s strategy of decoupling of US allies from China. While Southeast Asian countries, Japan, South Korea, and Australia may all be wary of China at the moment and seek diversity in their trade relations, they simply cannot sustain their prosperity without stabilisation of trade relations with China. Asia is criss-crossed by ever intensifying value chains, and China’s still an integral part of that. Vietnam and other ASEAN countries are rising as manufacturing hubs, but that’s a process accompanied by increased imports of intermediary goods from China.

But RCEP is also of global significance. The agreement, signed off in the middle of a pandemic and US–China trade war, reminds the world, first, that East Asia countries, unlike the Americas and Europe, have broadly succeeded in controlling COVID-19. That success, across different types of political regime, with a similar respect for science, expertise, and trust in government, was accompanied by general acceptance of mask-wearing and community rules.

Second, it also reminds the world that the biggest trading group in the world economy is doubling down on the rules-based multilateral system. Research by Homi Kharas shows that most of the increase in the global middle class until 2030 will take place in China and Asia.

 

RCEP also embeds the first trilateral agreement between China, South Korea and Japan, itself a huge deal. The common interests of these three countries have over-ridden tense geopolitical relations across the Asia Pacific. RCEP underscores the pragmatic efforts of Japan to balance its strong security stance on the South China Sea and in the East China Sea with stability in the bilateral relationship with China. After the completion of the CPTPP, the EU–Japan partnership, and the US–Japan agreement, this marks the completion of the Abe trade agenda (even though Japan would have preferred India to join RCEP). …

As well, RCEP brings significant institutionalization to Japan’s economic relations with China, including a new chapter on e-commerce (with a ban on data localisation requirements), rules on government procurement, and rules on intellectual property rights that go beyond WTO rules. The same calculations drive Australia’s readiness to sign RCEP in the midst of a bitter, but hopefully short-lived, trade fight with China.

The coming Biden Administration needs to rethink its reluctance to rejoin the CPTPP. If it fails to do this it could be on the outside of growing multilateral economic integration and possibly more.

Image Credit: Vietnam News Agency, via Associated Press.

From Shanghai to Pretoria – From Where You Stand: Part II

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Shanghai was the first conference stop; but it wasn’t the last.  For the first time the partners – the Munk School of Global Affairs and the Stanley Foundation – held a conference in Pretoria partnering with our friends at the Department of Political Science at the University of Pretoria.  We were very fortunate to welcome friends from most of the key countries – Brazil, India, China and obviously South Africa.  Unfortunately, our colleague from Russia was ultimately unable to make it.

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A Compelling Counterweight? – The Role of the BRICS in Global Summitry

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So the 5th BRICS Summit has come and gone in Durban South Africa.  The first BRICS Summit in Africa; the first hosted by the newest BRICS member South Africa; and the first to be attended by the new Chinese leader, Xi Jinping.  I am sure there are a number of other firsts but that will do for the moment.

For the world’s media there were these persistent questions –  what is this organization?  What does it represent?  Do we need to take any notice of it or is this a leader-made media opportunity?

For the experts the questions weren’t really all that much different.  It is not at all clear how to assess the impact and influence of this Leaders Summit?  And where are we to place this annual leaders gathering in the larger architecture of global summitry?

First, and barely mentioned by either the experts or the global media is the fact that all these BRICS countries are also members of the G20 Leaders Summit.  Indeed Russia is not just a member of this leaders gathering but is also a member of the G8 – extant since the late ’90s – and hosting the G20 this coming September in St. Petersburg.  Oh and it will shortly host the G8.

By now even the most casual observer knows the annual summit’s origin – at least with respect to the name.  Jim O’Neill of Goldman Sachs fame created the BRIC grouping – Brazil, Russia, India and China – as an investment monicker for these large emerging market countries  – only to see it appropriated by leaders from those very same countries first by ministers from these countries in 2008 and then in an annual leaders meeting beginning in 2009 at Yekaterinburg in Russia.  The original four were joined by South Africa in 2011 at the Summit in Sanya in China.

So what are we to make of this grouping?  Is it a developing country alliance – a magnet for developing country concerns; a caucus of large emerging market economies within the G20; or some kind of counterweight  – whether in the G20 or not – to the traditional and dominant states in the fashioning and future organization of the global economy.

Let’s start with their accomplishments.  At the end of the day analyzing their decisions is an important aspect of global summitry, and worthy of some attention.  Like the G7/8 and the G20, the BRICS leaders issue a declaration at the end of each gathering.  Now these communiques have been worked on by Sherpas, personal representatives of the leaders, and officials long before the conclusion of the meeting.  The current communique issued, the eThekwini Declaration – you can find it at the official BRICS website – or use the BRICS website at the University of Toronto – brought to you by my colleague, Professor John Kirton and the students at University of Toronto as well Marina Larionova of the Higher School of Economics in Moscow and her colleagues.

Well the communique is lengthy and I am afraid not terribly edifying.  I was asked by various media outlets what I thought the leaders had to accomplish to consider the Durban Summit a success.  I suggested two concluded policies were necessary:  the creation of the new BRICS Development Bank (see paragraph 9); and then the Contingent Reserve Arrangement (paragraph 10).  But neither was concluded notwithstanding that the Statement declared that both would be established.  All the critical detail for both projects still need to be worked out at this point and who knows when, and whether, the BRICS officials will be able to do so.

One other matter seemed to raise interest over the collective influence of the BRICS – this a possible the statement on Syria. Just before the Durban Summit began Bashar al-Assad appealed to the BRICS leaders to help end the two-year conflict in Syria.  The appeal raised all sorts of possibilities for involvement of these countries – especially given that Russia but also China – had resisted muscular international efforts, including at the UN, to end the Syrian civil war.  So here would be a collective effort in security cooperation among the 5 states.  It might bring influence.  Paragraph 26 speaks to the BRICS-Leaders’ concerns at the Syrian situation.  But other than a statement to permit “unimpeded access to humanitarian organizations” – possibly provision of assistance without notification to the current government, which would be a change in policy – the statement evidenced little in the way of a new initiative.

So a reading of the Declaration reveals little in the way of effective decision making.  In reading the experts and the more enthusiastic officials – read that at least as Jacob Zuma –  the pendulum swings in the direction of some kind of counterweight – to the traditional states especially the United States.   And this view pushes in the direction of suggesting that the global economy and the traditional institutions – World Bank and IMF have failed to adjust and accommodate the rise of these large emerging market economies and that the BRICS somehow can force the pace.  Now we all can agree that the reforms promised have failed to keep pace with the promises made at the time of the global financial crisis; but how the BRICS will bring about a more rapid change – I’m afraid I don’t see it though my colleague Oliver Stuenkel at Post Western World thinks it – or at least the BRICS bank possibly will:

The answer is that while emerging powers seek a larger role within the existing framework, they do not feel established powers are willing to provide them with the adequate power and responsibility – reforms at the World Bank and the IMF have been too slow, and not far-reaching enough. The World Bank remains, despite its name, essentially a Western-dominated institution in the eyes of emerging powers.  It is difficult to read the creation of the BRICS Development as anything other than that.

Oliver then swings in a very Brazilian direction – that is “state-led economic growth sustained by strong development banks.”  This is the possible BRICS consensus.  And while there is some attention in the Declaration, see paragraph 18, to what is called State Owned Companies (SOCs) and encouragement to explore cooperation among these companies, there is little substance you can point to to suggest that the development model is the foundation for the BRICS.

So while a counterweight remains possible motivation for the BRICS how is it shaped in the context of the BRICS?  Many experts have referred to the BRICS and the character of consensus, or lack thereof.  On the latter experts from the traditional countries have alluded repeatedly to the lack of consensus.  My friend and colleague from the WTO, John Hancock writing recently  in Canada’s Globe and Mail targeted this feature of the BRICS:  “But ironically as the BRICS grow more powerful, they also grow more fractious.”  Now John acknowledges that the lack of consensus is not restricted to the BRICS, but like-mindedness has always been overrated whether at the BRICS or the G8 or the G20.  What’s important, as I argued above, is what gets decided and as we can see from this current Summit there is a long way to go.  John suggests, however, that there may be substance to the notion of a counterweight:

The only thing the BRICS clearly share is a smouldering resentment of Western dominance, and a palpable desire for their own place in the sun. Russia is still smarting from its loss of superpower status.  China has not forgotten the humiliations of the 19th and early 20th centuries.  India still carries heavy colonial baggage, and the South Africa carries even heavier baggage from its grim apartheid past.  If your enemy’s enemy is your friend, then the BRICS at least have that in common.

Is it enough?  Well rhetorically, maybe but on a developmental level, its seems far fetched. And as John concludes, “But shared covetousness doe not a common agenda make.”

There is no obvious answer at this juncture as to what the BRICS represents but I’m willing to bet that in the medium and longer term. we are far more likely to see the BRICS acting as a caucus within the G20 than anything else. And we have seen it acting that way already.  For instance in building policy consensus for committing funds to the IMF, that could be used among other things for the eurozone crisis, the willingness to commit among all the BRICS was concluded after just such a caucus gathering persuading Brazil to commit though it had expressed doubts publicly.  Indeed it would be a sad outcome if the BRICS ended up as a counterweight when much hope has been expressed over the expansion of the G8 to the G20 exactly because it brings together at the global summitry level leaders from the large emerging market countries and the traditional states.

As a parting comment there was much idle discussion at the conclusion of the Summit over the name with some suggesting the BRICS should be renamed the BRICSI as there was much discussion about extending membership to include Indonesia.   But I and others took care of that long ago – so a sign off for now from Rising BRICSAM

Image Credit: globalpost.com