BRIC & IMPACT OF INTERNATIONAL TRADE

BRIC & Impact of International Trade

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Abstract

This paper discusses the role of BRIC - Brazil, Russia, India and China countries in the international trade market. The paper also highlights the significant impact of BRIC countries on international trade. BRIC Countries and their Impact on International Trade

Introduction

BRIC is acronyms of Brazil, Russia, India and China countries. These countries nowadays emerge as a superpower, and known as “emerging giants” because they are considered to be the key players in the international market. In the international market, the new global economic reality is the huge participation of BRIC countries, and weighs more in the negotiation of trade.

Almost in every industry, today BRIC countries are prospering in terms of exports, production and imports. BRIC countries also have an influence in negotiations of trade at the World Trade Organization (WTO). Furthermore, on the economic side, the decisions of BRIC countries as regard to trade policies and volumes of import and export posses a strong impact on the international trade.

There is also an international agreement among BRIC countries that emphasize the international conferences approval by the BRIC countries that permit them to maintain the activities of investment and trade securely within the group.

The individual participation of BRIC countries in the international trade, capital, technology and investment is not new and since from 1980's. BRIC countries continued a more powerful interaction with the international trade. This retreatment was a result of socialist revolutions in China and Russia, while there was a state planning in India and in Brazil there was going through national industrialization. After the Second World War, Russia and China were excluded themselves from the system of global capitalist, such as the International Bank for Reconstruction and Development (IBRD), the General Agreement on Tariffs and Trade (GATT) and the International Monetary Fund (IMF); whereas, Brazil and India were adhered themselves to these capitalist bodies in a marginal and reluctant way.

Discussion

The major trade partners of BRIC include EU27, United States, Japan, South Korea and Hong Kong with a percentage of 21.2%, 11.4%, 7.9%, 5.7%, and 5.7% respectively in 2010. However, the major exports partners of BRIC were EU27 with 24.74%, United States with 14.5%, Hong Kong with 9.8%, Japan with 6.2%, and South Korea with 3.7%; in the year 2010. The major import partners of BRIC in 2010 includes EU27, Japan, South Korea, United States and China with a percentage of 17.0%, 9.9%, 8.1%, 7.9% and 5.3% in 2010 (IMF, 2011).

Impact of BRIC Countries on International Trade

BRIC countries encompass 15 percent of the world economy, and international currency reserves of about 40 percent. The collective trade volume of BRIC with the world is approximately $790 billion to $4.4 trillion in 1999 to 2008 respectively. The BRIC countries played a vital role in escalating trade among developing countries, and the growing rate is three times more rapid than advanced economies' trade growth rate. BRIC countries facilitate trade between LIC (low-income countries) and non-LIC up ...