China's Brics-Plus partnership could transform global trade
There may be a backlash against globalisation in much of the West, but the club of big emerging economies Brazil, Russia, India, China, South Africa (Brics) is becoming the glue for new inter-regional trade alliances.
However, despite the creation of a common New Development Bank by the Brics, and other initiatives to boost economic ties between members, the countries are beginning to encounter limitations to further integration, according to a new report by the World Economic Forum (WEF).
Those limitations can be overcome though, the WEF argues.
One way to overcome integration constraints is to shift the focus from trade liberalisation towards the building of a wider framework of integration and co-operation.
A framework of integration would open new gateways for co-operation among the Brics and their partners, the WEF suggests.
Key to that may be China's Brics-Plus initiative, which looks around the Brics themselves at ideas that also encompass those five regional giants' key neighbours and regional co-operation groups.
According to the Chinese Minister of Foreign Affairs, Wang Yi, the Brics-Plus circle will represent a new platform for the South-South co-operation, through increased dialogue and partnerships led by the Brics.
Rather than expanding the number of core Bric members, the Brics-Plus initiative is aiming to create a new platform for forging regional and bilateral alliances across continents.
In addition, the initiative is aiming to bring together the regional integration blocks where each of the five Bric economies plays a leading role.
Accordingly, the main regional integration blocks that could form the Brics-Plus platform include Latin America's Mercosur, the South African Customs Union (SACU), the South Asian Association for Regional Co-operation (SAARC), as well as the China-ASEAN free trade agreement.
If all five blocs are integrated into a Brics-Plus circle it would encompass 35 nations and a potential partnership larger than the European Union both in terms of the number of countries and of population size.
The WEF has suggested that core areas of co-operation between and across the Brics-Plus network could include trade and investment, but could also create a major voting block within organisations like the United Nations and the International Monetary Fund (IMF).
A Brics-Plus platform for trade and investment might ease the expansion of trade agreements across individual countries and/or regional blocks.
The WEF argues that such trade alliances would not have to follow the standard path of detailed free trade agreements, but could also involve specifically targeted and/or limited trade liberalisation through preferential trade agreements.
A key areas where a Brics-Plus would have real heft is participation in international organisations.
For example, at the International Monetary Fund (IMF), the consolidated voting share of the Brics is just short of 15pc.
The addition of the Brics-Plus countries would raise the consolidated share of the vote to around 17pc, just enough to constitute a blocking stake with respect to the key decisions.
Co-operation between development banks and other development institutions formed by Brics-Plus economies, as well as a shared payments system, are among the other suggested areas of co-operation between the members, said WEF.
"The Brics-Plus initiative is not the enlargement of the Brics core to include the largest developing countries," the WEF says.
Instead, it presents an opportunity to create a network of alliances to comprehensively represent the developing world.