BRICS New Development Bank impact on trade: challenges and opportunities for Brazil – Pricila Menin

Trade agreements among BRICS members

International agreements regulating trade between BRICS countries (Brazil, Egypt, India, Iran, China, UAE, Russia, Saudi Arabia, Ethiopia, and South Africa) are crucial for strengthening economic cooperation and the development of these economies.

The main goal of these agreements is to reduce trade barriers, promote economic integration within the group, and enhance the role of BRICS as an influential participant in global trade. BRICS countries have concluded a series of agreements aimed at facilitating trade in goods and services, reducing tariffs and non-tariff barriers, and fostering closer integration of the business environments of the member states.

However, economic, structural, and political differences between members often hinder the full and effective implementation of these trade agreements. Brazil is no exception in this regard.

The Role of the BRICS New Development Bank

The establishment of institutions such as the New Development Bank (NDB) and the BRICS Contingent Reserve Arrangement reflects the group's desire to strengthen financial cooperation. These initiatives create favourable conditions for infrastructure investments and promote economic stability among BRICS members. These mechanisms are strategically important as they reduce dependence on traditional financial institutions such as the International Monetary Fund (IMF) and establish alternative regional development support structures.

BRICS agreements provide opportunities for Brazil to expand its external relations and attract investments. However, the full realisation of the country's trade and economic potential faces internal constraints.

Factors such as bureaucracy, infrastructure issues, and a complex tax system can hinder the competitiveness of Brazilian manufacturers. Another challenge is Brazil's dependence on the export of low-value-added products. The key markets for Brazil (China and India) primarily import raw materials and agricultural products.

Facilitating investments and harmonising standards

In addition to promoting economic cooperation, BRICS members also aim to diversify trade links.

In this context, investment promotion agreements play an important role, aiming to create a predictable and secure environment for investments within the BRICS area. The implementation of these provisions offers Brazil an opportunity to modernise its industry. Attracting investments can boost the development of high-tech industries and the growth of exports of high-value-added products.

Technical, sanitary, and phytosanitary standards are also regulated by BRICS agreements. The member countries strive for the harmonisation of national standards to facilitate trade in agricultural products, which is extremely important for Brazil's economy. By reducing administrative costs and barriers, local producers will have more opportunities to expand exports to BRICS markets.

Challenges and opportunities for Brazil

However, implementing these changes requires significant efforts to adapt the national economic system to new international standards. Specifically, it is necessary to modernise mechanisms for attracting investments in the high-tech sector and procedures that ensure the development of foreign trade.

The work of the NDB under the leadership of former Brazilian President Dilma Rousseff plays a key role in implementing BRICS agreements. The bank provides essential funding for infrastructure projects that enhance producers' competitiveness and facilitate trade among member states. The organisation's priorities include initiatives that promote sustainable development and regional interconnectedness within and between BRICS economies.

The NDB's activities, in the form of financial support for relevant infrastructure projects in the transport and renewable energy sectors, are seen as the foundation for the implementation of international agreements aimed at enhancing the competitiveness of the member countries' economies.

For Brazil, the support provided by the BRICS New Development Bank opens up opportunities for modernising its logistics infrastructure, such as ports, highways, and railways, whose development can reduce transportation costs and improve access to international markets.

Despite the progress made through these measures, trade integration within BRICS still faces various challenges. The lack of full regulatory harmonisation and economic differences between countries require ongoing coordination and adaptation efforts. For Brazil, it is evident that structural reforms are necessary for the country to fully benefit from international agreements and improve its position in global value chains.

Multilateral relations within BRICS, supported by trade agreements and NDB activities, represent an attempt to strengthen the group as a leading player on the global stage. For Brazil, such cooperation provides an opportunity to diversify its economy and expand its presence in the global market. If the country can overcome internal limitations and adapt its trade policy to BRICS international standards, success in this direction will depend on its commitment to reforms and the ability to work together in addressing the challenges of global trade.

The editorial opinion may not coincide with the author's views.

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