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Rule Making on New Issues and Possible Common Position of BRICS by CUTS International

Rule Making on New Issues and Possible Common Position of BRICS by 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

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Rule Making on New Issues and Possible Common Position of BRICS by CUTS International

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  1. Rule Making on New Issues and Possible Common Position of BRICS by CUTS International BRICS-TERN Annual Meeting New Delhi, 27 March 2012

  2. 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

  3. 1. Trade and Climate Change • Unilateral Trade Measures • Climate Protectionism and Border Measures • Technology Transfer and Environment Goods and Services (EGS) • Carbon Labelling

  4. 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

  5. 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

  6. 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.

  7. 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

  8. 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

  9. 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. ----

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