By Ravi Kanth Devarakonda
GENEVA - Trade ministers of the BRICS countries - Brazil, Russia, China, India and South Africa - say that at the Group of 20 trade ministerial summit in Mexico this month they will try to ensure that attempts by industrialized countries to frame a new trade agenda do not drown development-led trade liberalization and World Trade Organization (WTO) talks.
"We will all attend the Cancun meeting to ensure that any agreement to hasten progress in further trade liberalization is informed by the Doha Agenda," South Africa's Minister of Trade Rob Davies told Inter Press Service (IPS).
The Doha Development Agenda (DDA) was launched by the WTO almost 11 years ago to correct the historical imbalances and asymmetries in the global trading system. It was designed to enable poorer countries to integrate into the system.
"This is a most dangerous move by the industrialized countries, which are determined to undermine the independence and multilateral character of the WTO, where a large majority of countries are asking for developmental flexibilities for implementing liberal trade commitments," said a trade envoy, referring to the agenda for the meeting.
"The G-20 is not representative of the WTO because the poorest countries and countries in Africa, except for South Africa, have no say in setting the trade agenda," the envoy said.  The rich countries have overwhelming influence in setting the agenda at the G-20 meetings, the envoy said.
"The draft agenda for the meeting is basically asking trade ministers to agree on creating a super-body headed by the chiefs of the WTO and OECD [the 34-member Organization for Economic Cooperation and Development] to oversee all the review and monitoring functions," the envoy said.
Therefore, the presence of the BRICS ministers is essential, lest the trade agenda be radically altered for the next 10 years, said sources familiar with the BRICS ministers meeting.
During their meeting in New Delhi last week, the BRICS ministers discussed the draft G-20 agenda issued by Mexico, and not yet made publicly available, the South African trade minister said. Significantly, the draft agenda is silent on the Doha trade talks.
It aims to take decisions on core trade issues without first discussing them at the WTO, which is now grappling with new approaches to accelerate the DDA talks.
"We strongly believe that the process has to be multilateral and the central focus has to be on the Doha single undertaking," said Davies, emphasizing the importance of transparency and inclusiveness.
"Attempts to reshape the architecture without concluding the Doha talks are not correct," Davies said, suggesting that the BRICS countries are ready to take small steps to reinvigorate the Doha trade negotiations. The minister insisted that agriculture is at the heart of the DDA and that precious little is done to address the continued trade-distorting subsidies of the industrialized countries.
It is important to accord primacy to the Doha multilateral trade negotiations by discussing issues first at the WTO, Davies argued.
The draft agenda for what is going to be the first G20 trade ministerial meeting of its kind - beginning on April 19 - sets the stage for preparing a "New Trade Narrative".
The five-page agenda obtained by IPS, which remains confidential, squarely addresses the trade interests of the rich countries, under subheadings such as "better understanding global value chains to better regulate trade" and "services, trade finance and trade facilitation are essential to oil global value chains".
Angel Gurria, secretary general of the OECD, known as the rich-country think tank, and Pascal Lamy, the WTO director general, will provide the justification for pursuing this new agenda to the G-20 trade ministers.
The heads of the OECD and the WTO have been working in tandem for some time now to change the manner in which global trade is measured and assessed in a neo-liberal framework away from a development perspective, say analysts.
Developing and least-developed countries have opposed the framework advanced by the OECD and WTO Secretariats on market-led trade reforms.
In addition, the G-20 ministers will discuss "trade, growth, and jobs". The themes for discussion include "trade as a source of growth", "trade as a source of jobs", and "the imperative to keep markets open and to keep opening markets".
Up until now, trade negotiations, including the very setting of the trade agenda for any negotiations, have been based on a give-and-take framework. But for the first time, Mexico is asking ministers to move away "from this setting in which many trade discussions happen" to identify "the links between trade and job creation and [to improve] trade statistics that consider global chains and value addition."
Mexico also wants ministers to focus on "the major forces and challenges facing their economies, including protectionist pressures, and what alternative policies are there to deal with them, other than trade instruments".
"Reading the draft agenda, one gets the feeling that there is a hidden language, which shows basically the interest of developed countries and not of developing countries," said Isabel Mazzei, a former Oxfam International trade policy advisor.
Speaking in her private capacity to IPS, she asked: "What does it really mean 'to change the trade narrative'- does it mean to 'move the goal posts'?"
"The Doha Round is about development, agriculture, elimination of subsidies, policy space ... and now it looks like this narrative is obsolete as there is no mention of agriculture or subsidy elimination," she said. "Many developing countries still have a big portion of their labor force coming from the agricultural and manufacturing sectors.
"Clearly the G-20 draft agenda is a concerted attempt to bring the issues and concerns of rich countries from the back door," she said.
1. The G-20 bloc of major and emerging economies is made up of Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, United Kingdom, United States, and the European Union.
Analysis by Kester Kenn Klomegah
MOSCOW, Mar 19, 2012 (IPS) - India’s proposal to set up a bank of the BRICS nations (Brazil, Russia, India, China and South Africa) will top the agenda at the summit of the group in New Delhi Mar. 28.
India believes a joint bank would be in line with the growing economic power of the five-nation group. The bank could firm up the position of BRICS as a powerful player in global decision-making.
"The BRICS bank does not need much capital for a start," Alexander Appokin, senior expert at the Moscow- based Centre for Macroeconomic Analysis and Forecasting tells IPS. "What is more important is that the BRICS development bank presents a unique opportunity for indirect investment of central bank foreign reserves inside the countries."
A BRICS bank could for example issue convertible debt, which would arguably be top-rated and can be bought by central banks of all BRICS countries. BRICS countries would thus have a vessel for investment risk-sharing.
"China will be the biggest beneficiary of that," says Appokin. "Moreover, infrastructure investment mostly needs not just long-term financing but external monitoring for more transparency and efficiency increases. Here, a BRICS development bank could offer some advice for successful implementation of regional projects."
But, he cautions, "development structures like a BRICS bank are effective only in case they are given independence in project financing decisions from the governments, or at least room to operate in long- term development framework."
Yuhua Xiao, assistant professor at the Institute for African Studies in the Zhejiang Normal University (ZNU) in China says the idea of setting up a development bank for financing projects in these countries is a sign of the growing self-assertiveness and of independence or interdependence of emerging economies.
"As the emerging powers' approaches to development may differ from established norms, such an institutional set-up will test the possibility of cooperation in a different framework which might generate new ideas," Yuhua tells IPS in an emailed comment.
India's proposal for a BRICS bank was long overdue, says John Mashaka, financial analyst at Wells Fargo Capital Markets. "It is a way the emerging nations are trying to pull out of the western dominated World Bank and the IMF," he tells IPS.
"Basically India, China and perhaps Russia are trying to show off their economic clout; they are trying to demonstrate to the west that they can do without them. Above all they need freedom from western financial influence."
Mashaka says the joint bank besides being a financial institution for BRICS member countries can also support infrastructural projects in developing countries in Africa, Asia and Latin America. But it has a long way to go, he says.
"The effectiveness of the bank is yet to be seen; this plan is not going to be cakewalk. China has already said it wants permanent presidency. Russia and India may demand the same. We know that Africa is a lucrative market for China in terms of natural resources and as a market for industrial products.
"Africa being such a strategic region, China may want the bank to finance many of its projects in the African region, or simply cooperate with the African Development Bank."
Mashaka says there are also unanswered questions about capital structure, such as which BRICS member state will foot the bigger bill needed to establish the bank, and the role of various countries.
Albert Khamatshin from the Centre for Southern African Studies at the Russian Academy of Sciences believes South Africa will benefit most because the primary focus of the bank will be development projects within BRICS.
Dr. Alexandra A. Arkhangelskaya, head of the Centre for Information and International Relations at the Institute for African Studies at the Russian Academy of Sciences says a bank like this could shift the weight of economic power even though the creation of such an institution would be difficult.
"It is a good in terms of a multilateral framework of cooperation," Arkhangelskaya tells IPS. "But the BRICS states have differing economic weight, and to find the right balance to avoid one or some members dominating can pose a challenge. The threat of marginalisation of members in comparison to China is evident.
"BRICS is unity in diversity, and to take new steps towards mutual cooperation can be challenging. Therefore, it is interesting to see the development of this idea and to clearly understand the mechanism of its implementation."
She further believes the bank could greatly benefit countries outside BRICS if it supports least developed countries in ways similar to the IBSA (India, Brazil, South Africa) Development Fund, which has a number of successful projects.
Prof. Adams B. Bodomo from the School of Humanities at the University of Hong Kong, who has researched BRICS extensively, tells IPS that Brazil proposed that developing countries would be willing to contribute money to solve the Eurozone problems in return for more power in the International Monetary Fund (IMF). But he warned that the "International" Monetary Fund is not really for developing countries. He called it a Western Monetary Fund.