Can we expect the same from the expansion of the Brazil, Russia, India, China and South Africa (BRICS) bloc with the increasing power of the developing world?

Since the establishment of the European Union with the Maastricht Treaty on  Nov. 1, 1993, the bloc has grown to include 27 member states. As an enormous economic powerhouse, the EU has brought indispensable impacts to both the global economy and security. Its leverage in resources has enabled EU countries to shape the perceptions of global issues, which often deviate from reality.

However, both the EU and the United States are not following a path toward strategic autonomy and are now on the brink of irrelevance.

In terms of economic power, the EU accounts for only 15 percent of global Gross Domestic Product (GDP), down from 25 percent in 1990, while BRICS, after six new members join in January 2024 will comprise nearly 30 percent of the global GDP, according to the International Monetary Fund.

After the six new members, Saudi Arabia, Iran, Ethiopia, Egypt, Argentina and the United Arab Emirates (UAE), join the bloc, BRICS will represent 46.5 percent of the world’s population.

The five founding and current member countries have argued that their economies and populations are not properly represented in important institutions, particularly the World Bank and the IMF.

A survey by ISEAS Singapore last year showed that in the eyes of the citizens of Indonesia and other ASEAN countries, the EU no longer has strategic economic or political influence in the region.

At the 15th BRICS summit on Aug 22-24, South African President Cyril Ramaphosa said “BRICS stands for solidarity and for progress. BRICS stands for inclusivity and a more just, equitable order. BRICS stands for sustainable development. The group has been remarkably consistent on these values and aspirations.”

Economics has always been central to the bloc. At its root, it is a collective of emerging economies eager to sustain and improve their economic trajectories. Their insistence on reform is, after all, based on their perceived disproportionate under-representation in global financial institutions.

Even though many analysts in developed countries see the BRICS expansion as a plunge into uncharted territory as the new actors have widely varied interests, the larger BRICS will increase its envisaged role as a geopolitical alternative to the global institutions dominated by the West.

Indonesia, BRICS members and other developing countries have been disillusioned and frustrated with EU policies that regulate various industry and trade norms of critical farm commodities. The EU also introduced non-tariff barriers and protectionism measures which will directly affect exports to EU countries.

There are at least six trade barriers between Indonesia and BRICS members because of the EU, and additional tariffs for steel which are related to the nickel ore export ban. Currently, Indonesia’s appeal is being examined in the Appellate Body.

Additional tariffs on biodiesel exports are currently being disputed at the World Trade Organization (WTO). Furthermore, non-tariff barriers for palm oil have been created because of health concerns as well as tariff and non-tariff barriers in the form of the Carbon Border Adjustment Mechanism (CBAM) for cement, iron and steel, aluminum, fertilizers, electricity and hydrogen. The new regulation was published on Indonesia’s Independence Day, Aug. 17.

Another non-tariff barrier is the EU Deforestation-free Regulation (EUDR) for soy, beef, palm oil, wood, cocoa, coffee and rubber commodities. All EU-imposed trade barriers violate WTO rules.

BRICS is in a better position to create a more just trade system for commodities produced by members of the Global South, designed to correct and improve the principle of free trade that has been preached by the West. BRICS principles to promote inclusiveness and a fairer and equitable order will enable the forum to further thrive and grow as one of the most influential global forums.

The BRICS spirit of mutual respect and accommodation, sovereign equality, solidarity and democracy, openness and inclusiveness, deepening cooperation and consensus by consultation will enable the forum to further thrive and grow as one of the most influential global forums.

A thriving BRICS could spur Indonesian socio-economic development, notably in the production of palm oil and critical minerals for renewable energy, two of the most vital commodities and major sources of state revenue for Indonesia and other countries in Africa and Latin America. Although Indonesia, Malaysia and Thailand account for more than 85 percent of global palm oil output now, 10 countries in Africa and four countries in Latin America, led by Brazil, are emerging as new palm oil producers with great potential.

BRICS is expected to develop a new platform for a more just trade system for palm oil and other commodities which must be based on full compliance with national laws, environmental sustainability and social responsibility principles to help producers achieve sustainable and equitable trade relationships. These fundamentals conform with the EU standards.

As far as Indonesia is concerned, the emergence of BRICS and our current cases against the EU in the WTO are not meant to be trade wars. Indonesia is looking for fairer trade system that respects the Global South’s right to develop while also recognizing EU concerns about the environmental, social and good governance principles across the supply chain.

***

The writers are sustainability analysts.

Popular

Magnitude 6.5 earthquake strikes off Java island: authorities

Philippines to endure extreme heat until mid-May

Indonesia one step from Olympics after beating South Korea