Brazil, Russia, India, China and South Africa want a rules-based multilateral trade system as embodied by the World Trade Organisation to be central to global commerce as the Brics block’s biggest member faces billions of dollars of additional tariffs from the US.
“We recognise that the multilateral trading system is facing unprecedented challenges,” the Brics nations said Thursday in a declaration drawn up at their 10th annual summit held in Johannesburg. “We call on all WTO members to abide by WTO rules and honour their commitments.”
Escalating trade tensions are threatening to derail a global upswing that’s already losing momentum amid weaker-than-expected economic growth in Europe and Japan as financial markets seem complacent to the mounting risks, the International Monetary Fund warned on July 16.
The US and China clashed at a WTO meeting Thursday, with Washington demanding reforms to make the Asian nation’s economy more responsive to market forces. The office of the US Trade Representative is preparing levies on an additional $200 billion of Chinese goods and President Donald Trump said he is ready to go with tariffs on as much as $500 billion, roughly the value of all China’s annual exports to the US. The two countries last month launched their initial salvos by imposing duties on $34 billion of each other’s imports.
Trump said this month that the WTO treats the US unfairly, responding to questions about reports he’s considered withdrawing the US from the organisation. The American government wins most of the cases it initiates with the body.
Earlier at the summit, Chinese President Xi Jinping called on Brics nations to reject protectionism outright and promote trade and investment liberalisation. There are no winners in a trade war, he said.
“We must work together at the UN, Group of 20 and World Trade Organisation to safeguard a rule-based multilateral trading regime,” Xi said, adding disputes should be resolved through dialogue.
Strengthening trade and investment ties with Brics nations is one of the priorities, Russian President Vladimir Putin said at the same event.
The Brics countries agreed to strengthen their cooperation in energy, and want nations to fully implement the Paris Agreement on climate change.
The countries also reaffirmed a need for comprehensive reform of the United Nations and its Security Council to make it more representative and for more developing countries to be present, they said.