JOHANNESBURG (AFP) – Five of the biggest emerging economies on Thursday (July 26) stood by the multilateral system and vowed to strengthen economic cooperation in the face of US tariff threats and unilateralism.
The heads of the so-called Brics – Brazil, Russia, India, China and South Africa – met for an annual summit dominated by the risk of a global US-led trade war, although leaders did not publicly mention President Donald Trump by name.
“We express concern at the spill-over effects of macro-economic policy measures in some major advanced economies,” they said in joint statement.
“We recognise that the multilateral trading system is facing unprecedented challenges. We underscore the importance of an open world economy.”
Trump has said he is ready to impose tariffs on all US$500 billion (S$680 billion) of Chinese imports, complaining that China’s trade surplus with the US is due to unfair currency manipulation.
He has already slapped levies on goods from China worth tens of billions of dollars, as well as tariffs on steel and aluminium from the EU, Canada and Mexico.
“We should stay committed to multilateralism,” China’s President Xi Jinping said on the second day of the talks.
“Closer economic cooperation for shared prosperity is the original purpose and priority of Brics.” Russian President Vladimir Putin, who held a controversial meeting with Trump last week, echoed the calls for closer ties among Brics members and for stronger trade within group.
“Brics has a unique place in the global economy – this is the largest market in the world, the joint GDP is 42 per cent of the global GDP and it keeps growing,” Putin said.
“In 2017, the trade with our Brics countries has grown 30 per cent, and we are aiming at further developing this kind of partnership.”
The Brics group, comprising more than 40 per cent of the global population, represents some of the biggest emerging economies, but it has struggled to find a unified voice.
Analysts say US trade policy could give the group renewed purpose.
In Washington, Trump and European Commission chief Jean-Claude Juncker announced an apparent truce in their trade war after White House talks on Wednesday.
The US and the EU will “immediately resolve” their dispute over US steel and aluminium tariffs and subsequent EU counter-measures, US Treasury Secretary Steven Mnuchin confirmed on Thursday.
The dollar gained against the euro after the announcement, helping to boost euro-zone equities.
The punishing US metals tariffs had angered Washington’s major trading partners including the EU and sparked retaliation against important American exports, spooking global stock markets.
Xi arrived in South Africa for the Brics summit after visiting Senegal and Rwanda as part of a whistlestop tour to cement relations with African allies.
On Friday, African leaders attending a “Brics outreach” programme will include Paul Kagame of Rwanda, Joao Lourenco of Angola, Macky Sall of Senegal and Yoweri Museveni of Uganda.
Turkish President Recep Tayyip Erdogan will also attend the Brics event as the current chair of the Organisation of Islamic Cooperation and will meet Putin on the summit’s sidelines.