How Will the EU Approach the BRIC Countries? Future Trade Challenges

Abstract

This paper examines the bilateral trade relations between the European Union (EU) and the BRIC countries. The paper argues that Brazil is an efficient agricultural producer with strong interest in EU agricultural liberalization. India is interested in more access to the EU service market since India is an efficient service supplier in sectors such as IT and software, engineering, and call-centers. Another key issue where India has a great interest is in the so-called Mode 4 of the General Agreement on Trade in Services (GATS), i.e., temporary migration. As for China, the paper argues that there are many differences and difficulties between the EU and China in the trade field: the protection of intellectual property rights, counterfeiting and product piracy, China’s delay in complying with World Trade Organization rules, China’s competitive advantage from poor social and environmental standards, or unfair subsidies to favoured national industries. In Russia’s case, it is argued that Brussels should seek to diversify its energy supplies in order to overcome the EU’s dependency on Russia.

The research method used has been an interdisciplinary qualitative approach to the analysis of law, international political economy, and international relations, thereby moving away from the textual-formalistic reading of law.

The paper concludes that the EU is definitely an attractive partner for the BRIC countries as it provides much in its trade relations. In fact, the EU is Brazil’s, Russia’s, India’s, and China’s largest trading partner. Our results show that there is some, although limited, room for trade policy concessions at the multilateral level: with Brazil, in the case of agriculture and the Doha Round; and with India, the resistance with Mode 4 of the GATS. China and Russia, however, are in some areas more assertive than Brazil and India. In Russia's case, it is due to a reviving economy and booming prices in oil and gas. The EU is not in a stronger position vis-à-vis China due to the large Chinese market and China’s growing economic and political power. So EU partnerships with China and Russia are more difficult than with Brazil and India.

Keywords: EU, BRIC, agriculture, energy security, Mode 4, intellectual property

JEL Classification: K33, F13