BRICS cooperation helps stabilize global economy amid rising protectionism

The 17th BRICS Summit is going to take place in Rio de Janeiro, Brazil between July 6 to 7 under the theme "Strengthening Global South Cooperation for more Inclusive and Sustainable Governance."

According to the official announcement by Brazil, core priorities for the summit include cooperation on health projects among member states; trade, investment and finance; climate change; artificial intelligence (AI) governance; multilateral peace system and security architecture; and institutional development.

Experts say this year's summit will draw greater attention as the world, with prevalent regional conflicts and rising protectionism, is eager to hear the voice of BRICS, which represents nearly half of the world's population and contributes over 30 percent of the global GDP.

"This year, the international political landscape is quite different from the past. Geopolitical conflicts are escalating: the Russia-Ukraine conflict, the Israel-Palestine issue, and the recent Israel-Iran confrontation which shocked the world. The level of uncertainty is higher than ever. In this environment, what stance will BRICS take? This is closely watched by the international community," Wang Youming, a researcher at the Institute of Developing Countries at the China Institute of International Studies, told CGTN on Thursday.

Additionally, Wang highlighted that as Trump's tariffs have impacted all BRICS countries, the collective voice of BRICS in global trade and economic governance will be crucial for the international community.

This year's summit will be the first after the new member Indonesia, and 10 partner countries joined BRICS. Multiple emerging markets, developing countries, and international and regional organizations are invited to the summit.

A significant player in global economy

For nearly 20 years, BRICS has evolved into a significant player in the global economic landscape, becoming an essential platform for South-South cooperation.

Over the years, BRICS countries have launched key initiatives to promote trade and investment, offering viable alternatives for developing nations. These efforts have broken the long-standing dominance of Western economies, driving the global economic landscape toward greater multipolarity, fairness and sustainability.

In 2014, the group established the New Development Bank (NDB) to provide infrastructure funding to developing nations. That same year, the Contingent Reserve Arrangement (CRA) was created, a mechanism similar to the IMF's Special Drawing Rights (SDR). The CRA aims to provide emergency financial support to member countries during global financial crises, enhancing their ability to weather economic shocks.

It also established various platforms to promote investment flows and trade cooperation. For example, the BRICS Business Council facilitates cross-border investment by providing a platform for business exchanges. The initiative not only boosts intra-BRICS trade but also creates new business opportunities through joint investment projects.

According to the 2024 report by the China Institute of International Studies, intra-BRICS trade has grown at an average rate of 10.7 percent annually over the past decade, compared to just 3 percent global trade growth.

China's official data shows that in the first seven months of 2023, China's trade with other BRICS nations totaled 2.38 trillion yuan ($332 billion), a 19.1 percent increase from the previous year, and made up 10.1 percent of China's total foreign trade - up 1.6 percentage points. The data highlights both the vibrancy of intra-BRICS trade and the deepening economic cooperation among its members.

Facilitating global trade, investment

Furthermore, in response to the U.S.'s sweeping tariffs, BRICS countries have increasingly focused on trade diversification, expanding their cooperation with countries in Africa, Middle East and Asia Pacific. And they're also gradually reducing reliance on the U.S. dollar in trade, investment, and currency reserves.

Wang suggested that the upcoming BRICS summit may feature a call for upholding World Trade Organization (WTO) rules and strengthening local currency settlements to reduce reliance on the U.S. dollar in trade, investment, and currency reserves.

He explained that for Global South countries, strengthening local currency can shield domestic economies from external shocks and maintain fiscal sovereignty. It also reduces the effectiveness of U.S. sanctions driven by political motives and fosters greater stability in international monetary relations.

In May this year, BRICS held its 15th meeting of trade and economic ministers and issued a joint statement expressing strong concern over the rise in unilateral tariffs and non-tariff measures. They stated that such measures distort trade and violate WTO rules.

All parties agreed that BRICS members must uphold the multilateral trading system, resist unilateralism and trade protectionism, and safeguard the legitimate rights and interests of developing nations. They also agreed to leverage their complementary industrial and resource advantages, strengthen cooperation in emerging sectors like digital, green, and supply chain industries, and foster inclusive growth and sustainable development.