Trade among BRICS countries: Changes towards closer cooperation?

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JEL classification

• Trade Policy; International Trade Organizations
• Empirical Studies of Trade
• Economic Integration

Keywords

BRICS, complementarity, RCA, regional orientation, export introversion

Abstract

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. 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. This paper examines changing geographical trade patterns of BRICS’s exports in regard to significant changes in global trade shifts within the past decade. The aim of the paper is to identify product groups that are involved in BRICS’s trade relations development and show possible diversions. The assessment focuses on regional trade orientation among BRICS themselves and between BRICS and the Triad. The results are further tested on the consistency of the countries’ revealed comparative advantage together with the assessment of export trade introversion, complementarity and trade barriers. The results indicate that BRICS’s exports to markets other than the Triad are increasing but consist of less significant product groups. The export intensity assessment provided rather independent evidence of BRICS’s current behaviour than BRICS as a group. The most significant trade diversion from the Triad to BRICS was identified for the Mineral fuels, oils, distillation products, etc. product group exported by Brazil and South Africa to China and India.