Development of international trade between BRICS countries
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Summary
Introduction 3
Chapter 1 The evolving union processes within BRICS 6
1.1 The prerequisites for cooperation in the BRICS 6
1.2 Statement of the main factors affecting the BRIC Five Countries
international trade cooperation 15
1.3 External trade of BRICS countries 20
Chapter 2 The trade state of BRICS countries 26
2.1 Commodity trade among BRICS countries 26
2.2 BRICS trade in services 35
2.3 Opportunities and challenges facing international trade cooperation among
BRICS countries 43
Chapter 3 Further development of international trade of BRIC five countries 50
3.1 Prediction of international trade development trends of BRICS countries 50
3.2 Suggestions for future development of BRICS countries international trade 56
Conclusion 66
References List 69
Introduction 3
Chapter 1 The evolving union processes within BRICS 6
1.1 The prerequisites for cooperation in the BRICS 6
1.2 Statement of the main factors affecting the BRIC Five Countries
international trade cooperation 15
1.3 External trade of BRICS countries 20
Chapter 2 The trade state of BRICS countries 26
2.1 Commodity trade among BRICS countries 26
2.2 BRICS trade in services 35
2.3 Opportunities and challenges facing international trade cooperation among
BRICS countries 43
Chapter 3 Further development of international trade of BRIC five countries 50
3.1 Prediction of international trade development trends of BRICS countries 50
3.2 Suggestions for future development of BRICS countries international trade 56
Conclusion 66
References List 69
Over the past 50 years, the socio-economic image of the world economy, the composition of developed and developing countries has changed, and the world socialist system has disintegrated. The listed changes were expressed in the alignment and correlation of the main economic forces between the states. Developing countries have influenced the change in the macroeconomic sphere and have turned into larger and more stable participants in the world economy. The need for studying and researching new processes of increasing influence of the developing economies of Brazil, Russia, India, China and South Africa in international economic integration led to the urgency of the topic. The BRICS countries are an abbreviation of a cluster concept that unites the economies of five countries, which, according to Goldman Sachs forecasts, by the middle of the 21st century will be among the world leaders along with the United States and Japan.
18 years have passed since O’Neill coined the abbreviation BRIC to denote the growing markets of particular attraction to investors, and 13 years have passed since a meeting of the Ministers of Foreign Affairs in New York laid the foundations of the eponymous international association of a new type. The BRICS group of countries has become an indispensable object of study for all who strive to understand contemporary trends in the international arena. Yet it is often difficult to understand the proper meaning of the term, and there is a considerable diversity of perceptions and interpretations of the “BRICS phenomenon”. There is also no shortage of questions to pique the interest of observers. What is the true nature of this group that brings together five countries from four diverse continents? Attempting to answer that question raises a number of others: What does the BRICS group represent in the current context of the international system? Are the affinities of interests between the five member countries sufficient to consolidate a common agenda, despite the obvious differences between them?
Estimating the degree of the problem's development, it should be noted that there are few works devoted to the issues of economic cooperation within the framework of the BRICS. The study mainly deals with bilateral cooperation of countries in the BRICS space, which does not fully reflect the influence of the developing BRICS countries on strengthening the tendencies of regrouping world forces. This circumstance also determines the relevance and novelty of this study.
Among foreign researchers, the works of the analyst J. O'Neill, the experts of D. Carp, P. Knyazev, Ch. Kupchan, S. Mathur, P. Morazan, the works of Chinese researchers H. Yuan, L. Yueqin, Indian scientists D. Pradeepa, A. Singh, N. Vijayakumar, which made a significant contribution to the theoretical understanding of the development of cooperation of the BRICS countries.
The object of research is the BRICS countries. The subject of the study is the BRICS countries' trade cooperation, the dynamic and prospects of their mutual trade.
The purpose of this study is to clarify the development of mutual trade in BRICS countries and to identify, on the basis of a comprehensive analysis, the trends and prospects for the development of international trade between BRICS countries.
To achieve this, we should complete the following tasks:
• study the prerequisites for BRICS cooperation;
• analyse of current development indicators in the BRICS countries and identify the promising areas of cooperation between the countries of the Group;
• study the BRICS share in the world trade;
• analyse the BRICS's commodity trade and service trade trends in the BRICS countries as a whole;
• study the prospects for international trade in BRICS countries;
• based on the current development of the BRICS countries, give suggestions on the future development of international trade in BRICS countries.
Implementation of the research tasks was achieved through system approach, analysis and synthesis, statistical and comparative methods. To display identified economic dependencies graphical method was applied.
The present study is based on data and information collected from a variety of sources. The major source of data is International trade statistics from online data base of International Trade Centre. Also, data provided by such international organizations as the World Bank, United Nations Conference on Trade and Development was used.
The novelty of work is trends, prospects for the development of trade cooperation of the BRICS countries and suggestions for international trade development between BRICS Countries are revealed.
The theoretical and practical significance of the research is that the conclusions made in the thesis form the basis for further research of the trade and economic cooperation of the BRICS countries, as well as the processes of their economic integration. The results of the research can be used in the teaching of educational disciplines «World Economy», «International Economic Relations», «International Trade».
The work structure is determined by the purpose and tasks decided in the work. It includes introduction, three main parts, conclusion and references. The first chapter describes the evolving union processes within BRICS. The second chapter deals with analysis of current foreign trade relations of the BRICS countries. The third chapter predicts the development trend of international trade of BRICS countries and gives suggestions for the future development of BRICS countries.
18 years have passed since O’Neill coined the abbreviation BRIC to denote the growing markets of particular attraction to investors, and 13 years have passed since a meeting of the Ministers of Foreign Affairs in New York laid the foundations of the eponymous international association of a new type. The BRICS group of countries has become an indispensable object of study for all who strive to understand contemporary trends in the international arena. Yet it is often difficult to understand the proper meaning of the term, and there is a considerable diversity of perceptions and interpretations of the “BRICS phenomenon”. There is also no shortage of questions to pique the interest of observers. What is the true nature of this group that brings together five countries from four diverse continents? Attempting to answer that question raises a number of others: What does the BRICS group represent in the current context of the international system? Are the affinities of interests between the five member countries sufficient to consolidate a common agenda, despite the obvious differences between them?
Estimating the degree of the problem's development, it should be noted that there are few works devoted to the issues of economic cooperation within the framework of the BRICS. The study mainly deals with bilateral cooperation of countries in the BRICS space, which does not fully reflect the influence of the developing BRICS countries on strengthening the tendencies of regrouping world forces. This circumstance also determines the relevance and novelty of this study.
Among foreign researchers, the works of the analyst J. O'Neill, the experts of D. Carp, P. Knyazev, Ch. Kupchan, S. Mathur, P. Morazan, the works of Chinese researchers H. Yuan, L. Yueqin, Indian scientists D. Pradeepa, A. Singh, N. Vijayakumar, which made a significant contribution to the theoretical understanding of the development of cooperation of the BRICS countries.
The object of research is the BRICS countries. The subject of the study is the BRICS countries' trade cooperation, the dynamic and prospects of their mutual trade.
The purpose of this study is to clarify the development of mutual trade in BRICS countries and to identify, on the basis of a comprehensive analysis, the trends and prospects for the development of international trade between BRICS countries.
To achieve this, we should complete the following tasks:
• study the prerequisites for BRICS cooperation;
• analyse of current development indicators in the BRICS countries and identify the promising areas of cooperation between the countries of the Group;
• study the BRICS share in the world trade;
• analyse the BRICS's commodity trade and service trade trends in the BRICS countries as a whole;
• study the prospects for international trade in BRICS countries;
• based on the current development of the BRICS countries, give suggestions on the future development of international trade in BRICS countries.
Implementation of the research tasks was achieved through system approach, analysis and synthesis, statistical and comparative methods. To display identified economic dependencies graphical method was applied.
The present study is based on data and information collected from a variety of sources. The major source of data is International trade statistics from online data base of International Trade Centre. Also, data provided by such international organizations as the World Bank, United Nations Conference on Trade and Development was used.
The novelty of work is trends, prospects for the development of trade cooperation of the BRICS countries and suggestions for international trade development between BRICS Countries are revealed.
The theoretical and practical significance of the research is that the conclusions made in the thesis form the basis for further research of the trade and economic cooperation of the BRICS countries, as well as the processes of their economic integration. The results of the research can be used in the teaching of educational disciplines «World Economy», «International Economic Relations», «International Trade».
The work structure is determined by the purpose and tasks decided in the work. It includes introduction, three main parts, conclusion and references. The first chapter describes the evolving union processes within BRICS. The second chapter deals with analysis of current foreign trade relations of the BRICS countries. The third chapter predicts the development trend of international trade of BRICS countries and gives suggestions for the future development of BRICS countries.
Recent developments in the world economy have led to a new concept of international relations where emerging markets, notably BRICS (Brazil, Russia, India, China and South Africa) economies, create a strong counterweight to the already existing world powers of the Triad (US, EU and Japan) in both economic and political areas. China and India are slated to become the leading providers of manufacturing and services by 2030, while Brazil, Russia and South Africa will be amongst the leading commodity providers.
BRICS’s current geopolitical power was enhanced by the establishment of the newly coined acronym BRIC by O’Neill (2001) nearly a decade ago and by the long-term forecasts published by Wilson and Purushothaman (2003) from Goldman Sachs Investment Bank. It is expected that large BRICS economies with more than 40 % of the world’s population, and extensive demand, will be the engines of future global trade and economic growth. Therefore, their cooperation can also enhance their economic development. As a reaction, BRICS countries established a non-formal group, and since 2009, they have been meeting at yearly summits that serve as a promotional and network platform for their relations.
This results from the reallocation of global economic activities, global consumption to emerging and developing countries and hence import/export destination shifts. BRICS economies can be described today as being highly integrated into international trade, thus enhancing their engagement in the world economy. Even though the Triad remains among the most important trade partners for BRICS, their total share in BRICS’s trade is decreasing. Trade between BRIC countries and North America, Europe and Japan have grown by 300 % in the past 10 years, while trade among BRICS economies plummeted during the same time period by 1000 %. Moreover, it is likely to expect further positive trade development among BRICS themselves. According to study, BRICS economies currently trade with each other to the value of 500 billion dollar. However, by 2020 this is estimated to reach a value of 800 billion dollar.
The five countries comprising BRICS represent 3 billion people and have combined GDP of 16 trillion dollars. Nearly 17 % of the world’s total commodity trade is accounted by BRICS countries. BRICS representing 42 % of the world’s population contributes roughly 20 % of the world’s economy based on Gross Domestic Product (GDP) and 30 % of the world’s GDP based on Purchasing Power Parity (PPP). The BRIC grouping is predicted to account for a third of the global economy (in PPP terms) and to contribute about 49 % of global GDP growth by 2020. By 2050, Most of the current G-7 countries would be displaced by Brazil, Russia, India and China. Only the United States and Japan are expected to be counted amongst the largest economies of the world. The BRICs are clearly moving from the bantam-weight to the heavy-weight category.
The total trade volume of the BRICS countries has almost doubled, from 4 trillion US dollars in 2009 to 8 trillion US dollars in 2018. The positive growth performance of exports and imports underscores this upward trend. In terms of exports, the total exports of BRICS countries have increased from 2.1 trillion US dollars in 2009 to 4.1 trillion US dollars in 2018, resulting in the BRICS' share of global exports increasing from 13.2 % to
19.3 %. In terms of imports, the total imports of BRICS countries have also continued to grow. In 2018, total imports increased to 3.9 trillion US dollars (15.1 % of global imports), up from 1.9 trillion US dollars in 2009 (10.3 % of global imports).The BRICS countries jointly maintain a trade surplus. In 2018, China, Russia, India, Brazil and South Africa trade surpluses of 0.8 trillion US dollars, 0.3 trillion US dollars, 0.6 trillion US dollars and 0.2 trillion and 109.8 billion US dollars.
After entering the 21st century, the service trade of BRIC countries has developed rapidly and the scale of trade has become larger and larger. This is inseparable from the cooperation between the BRICS countries in strengthening service trade, improving the service trade mechanism, and establishing a BRICS. According to the data obtained from the WTO international trade statistics database, the total import and export of service trade of five countries in 2009 was 0.65 trillion US dollars, accounting for 9.2 % of the total trade in services of the world, but the service trade of the five countries by 2017. The total volume of imports and exports has increased to 1.32 trillion US dollars, the amount has increased nearly 2 times, accounting for 13 % of the total trade in services of the world.
The total import and export of the five countries' services and the total amount of exports have also changed in the same direction. From 0.3 trillion US dollars in 2009 to 0.52 trillion US dollars in 2017, the total import value increased from 0.35 trillion US dollars in 2009 to 0.8 trillion US dollars in 2017, accounting for the proportion of the world's service trade exports/imports. It increased from 8.3 % and 10.1 % to 9.6 % and 15.6 %. It can be seen that the total trade in services of the BRICS countries continues to increase, and their status in the world's service trade is also rising.
...
BRICS’s current geopolitical power was enhanced by the establishment of the newly coined acronym BRIC by O’Neill (2001) nearly a decade ago and by the long-term forecasts published by Wilson and Purushothaman (2003) from Goldman Sachs Investment Bank. It is expected that large BRICS economies with more than 40 % of the world’s population, and extensive demand, will be the engines of future global trade and economic growth. Therefore, their cooperation can also enhance their economic development. As a reaction, BRICS countries established a non-formal group, and since 2009, they have been meeting at yearly summits that serve as a promotional and network platform for their relations.
This results from the reallocation of global economic activities, global consumption to emerging and developing countries and hence import/export destination shifts. BRICS economies can be described today as being highly integrated into international trade, thus enhancing their engagement in the world economy. Even though the Triad remains among the most important trade partners for BRICS, their total share in BRICS’s trade is decreasing. Trade between BRIC countries and North America, Europe and Japan have grown by 300 % in the past 10 years, while trade among BRICS economies plummeted during the same time period by 1000 %. Moreover, it is likely to expect further positive trade development among BRICS themselves. According to study, BRICS economies currently trade with each other to the value of 500 billion dollar. However, by 2020 this is estimated to reach a value of 800 billion dollar.
The five countries comprising BRICS represent 3 billion people and have combined GDP of 16 trillion dollars. Nearly 17 % of the world’s total commodity trade is accounted by BRICS countries. BRICS representing 42 % of the world’s population contributes roughly 20 % of the world’s economy based on Gross Domestic Product (GDP) and 30 % of the world’s GDP based on Purchasing Power Parity (PPP). The BRIC grouping is predicted to account for a third of the global economy (in PPP terms) and to contribute about 49 % of global GDP growth by 2020. By 2050, Most of the current G-7 countries would be displaced by Brazil, Russia, India and China. Only the United States and Japan are expected to be counted amongst the largest economies of the world. The BRICs are clearly moving from the bantam-weight to the heavy-weight category.
The total trade volume of the BRICS countries has almost doubled, from 4 trillion US dollars in 2009 to 8 trillion US dollars in 2018. The positive growth performance of exports and imports underscores this upward trend. In terms of exports, the total exports of BRICS countries have increased from 2.1 trillion US dollars in 2009 to 4.1 trillion US dollars in 2018, resulting in the BRICS' share of global exports increasing from 13.2 % to
19.3 %. In terms of imports, the total imports of BRICS countries have also continued to grow. In 2018, total imports increased to 3.9 trillion US dollars (15.1 % of global imports), up from 1.9 trillion US dollars in 2009 (10.3 % of global imports).The BRICS countries jointly maintain a trade surplus. In 2018, China, Russia, India, Brazil and South Africa trade surpluses of 0.8 trillion US dollars, 0.3 trillion US dollars, 0.6 trillion US dollars and 0.2 trillion and 109.8 billion US dollars.
After entering the 21st century, the service trade of BRIC countries has developed rapidly and the scale of trade has become larger and larger. This is inseparable from the cooperation between the BRICS countries in strengthening service trade, improving the service trade mechanism, and establishing a BRICS. According to the data obtained from the WTO international trade statistics database, the total import and export of service trade of five countries in 2009 was 0.65 trillion US dollars, accounting for 9.2 % of the total trade in services of the world, but the service trade of the five countries by 2017. The total volume of imports and exports has increased to 1.32 trillion US dollars, the amount has increased nearly 2 times, accounting for 13 % of the total trade in services of the world.
The total import and export of the five countries' services and the total amount of exports have also changed in the same direction. From 0.3 trillion US dollars in 2009 to 0.52 trillion US dollars in 2017, the total import value increased from 0.35 trillion US dollars in 2009 to 0.8 trillion US dollars in 2017, accounting for the proportion of the world's service trade exports/imports. It increased from 8.3 % and 10.1 % to 9.6 % and 15.6 %. It can be seen that the total trade in services of the BRICS countries continues to increase, and their status in the world's service trade is also rising.
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