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Pragmatism prevails as BRICS rejects protectionism and trade wars

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As its economy falters, Brazil seeks closer business ties with China and India

Barely hours before Brazilian President Jair Bolsonaro started his bilateral meetings with the fellow BRICS leaders on Wednesday, the Venezuelan embassy here was stormed by a violent mob comprising supporters of Juan Guaidó, the self-declared President of Venezuela. As Eduardo Bolsonaro, a Congressman and the President’s son, sent out a tweet in support of the invasion, there was panic at Itamaraty, the Brazilian Foreign Ministry headquarters that was all set to host the 11th summit of the group of emerging countries. For the next few hours, the Brazilian diplomats worked hard to ensure that the incident did not overshadow the BRICS’ agenda as none of the member countries – barring Brazil – recognise Mr. Guaidó as Venezuela’s legitimate leader; and China and Russia openly back Nicolas Maduro as Venezuela’s President.

But, as Chinese President Xi Jinping arrived at Itamaraty a few hours later, the mood had certainly changed. After signing nine trade pacts – from agriculture to medicine — with China in presence of Mr. Xi, Mr. Bolsonaro said the Asian country “is part of Brazil’s future.” In a separate statement, Brazil’s Economy Minister Paulo Guedes even spoke of creating a “free trade area” with China, which is already Brazil’s top business partner with US$ 100 billion trade between them. “Our economy has been struggling. Despite this government’s ideological alliance with the Trump government, we have no major investments coming from the United States. We have problems with Europe too. We have to look at BRICS, especially China and India, for trade and investment,” says an Itamaraty diplomat, speaking on condition of anonymity.

Brasilia Declaration

In discussions between the BRICS leaders, held behind closed doors, and at the business forum held on Wednesday and Thursday, a consensus emerged that the trade war between China and the U.S. and rising protectionism was hurting the global economy and that multilateralism was crucial for the emerging countries to protect their own interests. The Brasilia Declaration, a joint statement released after the second round of meeting between the five leaders on Thursday, clearly threw the group weight behind multilateralism. “We reaffirm our commitment to helping overcome the significant challenges currently facing multilateralism, as well as upholding the central role of the U.N. in international affairs and respecting international law,” the statement said.

Earlier on Wednesday, the BRICS had criticised protectionism, blaming it for the global slowdown, While Mr. Xi of China called it a form of bullying, Russian President Vladimir Putin said the global economy had been influenced by the wide usage of “unfair competition in trade and unilateral sanctions, including those that are politically motivated, and protectionism is flourishing.”

Modi appeals for investments

Speaking at the BRICS Business Forum, Prime Minister Narendra Modi also called on business leaders of the member nations to invest in India, particularly in its infrastructure development. The shared thinking against protectionism was also reflected in the official declaration released on Thursday afternoon. “Trade tensions and policy uncertainty have taken a toll on confidence, trade, investment and growth… we recall the importance of open markets, fair, just and non-discriminatory business and trade environments, structural reforms, effective and fair competition, promoting investment and innovation, as well as financing for infrastructure and development,” the declaration said.

Pragmatism prevails as BRICS rejects protectionism and trade wars

Before the summit, there was some apprehension about the trade war led by U.S. President Donald Trump derailing the meeting as the Bolsonaro government is now closely aligned to the U.S.. But the state of Brazilian economy and a looming global slowdown seems to have pushed the BRICS towards pragmatism. On the Brazilian side, one of the main votaries of this pragmatism is Marcos Troyjo, special secretary for foreign trade, who has been pushing for more trade with India, especially in the field of agro-business. “Today, Brazil-India trade stands at just US$ 7 billion as compared to US$ 100 billion with China. We need to promote more business with India in all fields, including agro-products, technology and manufacturing,” Troyjo said in an interview on Wednesday.

As Mr. Bolsonaro has accepted Mr. Modi’s invitation to be the chief guest at the Republic Day celebrations in New Delhi in January 2020, the Brazilian President is expected to lead a huge business delegation to India and sign several pacts during the visit. “Brazil and India have seen each other as competitors in many sectors. There are many barriers in doing business. But because of the global situation, we need to invest more in each other. We are looking forward to engaging more with India, especially in biofuel, ethanol and information technology,” says a Brazilian official.

The U.S.-China trade war and its negative repercussions seem to have led to a change of heart in Brazil. Mr. Bolsonaro, who constantly attacked China during his election campaign in 2018, sang a different tune at the 11th BRICS Summit. The Brazilian President not only called for strengthening the New Development Bank, but said on Thursday that the Brazilian government would not enter the trade war between the U.S., Russia and China. “Brazil does trade with the whole world. We want the good of our people through this kind of relationship,” said Mr. Bolsonaro, while leaving for the final meeting with his BRICS counterparts.

The Brasilia Declaration released a few hours later does not mention either Venezuela or Bolivia even as it takes a wider look at the global economic and political situation. At the 11th BRICS Summit in Brazil, pragmatism and the pressure of global economy triumphed everything else.

(Shobhan Saxena is a journalist based in Sao Paulo, Brazil)

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Printable version | Dec 8, 2019 3:48:13 AM | https://www.thehindu.com/news/international/pragmatism-prevails-as-brics-rejects-protectionism-and-trade-wars/article29980213.ece

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