- The virtual meeting was held by the BRICS Ministers of Economy and Foreign trade.
- Russia proposed alternate dispute resolution format outside of WTO.
- China is the most impacted by WTO issues.
The BRICS countries (Brazil, Russia, India, China, and South Africa) held its ministerial meeting virtually. This year is the ten year anniversary of the BRICS grouping. Russia was set to host this year’s summit, but due to the Coronavirus pandemic, the summit had to be postponed.
The Coronavirus continues to be on the forefront of news. There are over 15 million infected around the globe. In the US, the numbers continue to climb, and California remains the leader with the highest number of infected.
In Spain, the reopening is being rolled back, due to the spike in numbers. It is clear that until a vaccine is here, the Coronavirus is not going away, and this is the new normal.
The virtual meeting was held by the BRICS Ministers of Economy and Foreign trade. The Russian Head of the Ministry of Economic Development, Maxim Reshetnikov, was in charge of the meeting. The Ministerial meetings usually precede the BRICS summit in St. Petersburg, which was supposed to take place in July, but was postponed due to the pandemic to the fall.
No date has been announced as of yet. According to the news, this was a very heated meeting. However, Russia, China, South Africa, Brazil and India agreed to work together pertaining to strengthening the multilateral trade agreements.
This is important for China, since at this time, it is experiencing a fiasco on the world stage. The US just ordered the closure of the Chinese consulate in Houston. China is also experiencing turmoil with India regarding the renewed conflict at China-India border.
Moreover, World Trade Organization discussions got so heated in the spring that WTO Director General Roberto Azevedo resigned. The BRICS can no longer defend its own rules, since the end of last year, the consideration of new trade disputes in its appellate body has been blocked by the United States.
This makes it impossible to make final decisions, as in the WTO, almost all disputes reach an appeal. This puts tremendous challenge and pressure on countries. It is highly likely that new agreements would have to be drafted going forward. Previous contracts can no longer be enforced and have value.
Russia brought forward a proposal to create an alternate resolution mechanism. The EU is still considering the proposal made by Russia. The American President, Donald Trump, also put tremendous pressure on the EU, especially pertaining to trade and defense sectors. Trump ordered the withdrawal of American troops is an attempt to manipulate Germany to buy only from the US, and not from Russia.
China has been impacted the most from the WTO’s destruction. The trade war with the US took a significant toll on China’s economy. The Coronavirus spread because of China’s careless action, and an attempt to suppress the true danger of the virus.
According to the French Nobel Prize winner and virologist, Luc Montagnier, the virus originated in a Chinese lab. Dr. Montagnier claims that the coronavirus was accidentally released, as China was trying to invent a vaccine against AIDS. Dr. Montagnier is 100% sure the virus was designed by molecular biologists. The rest of the medical community is 100% sure it was not.
For Russia, the WTO rules provide some basic guarantees against the endless escalation of sanctions. Freezing the mechanism of trade disputes in the WTO interferes with the interests of Russian exporters in the United States (duties on steel and aluminum) and the European Union (the dispute over energy adjustments, and others).
With the help of the WTO, Russia hopes to fend off the prospect of introducing a “carbon tax” on goods supplied to the European Union. The greater the “carbon footprint” of certain goods, the higher the tariff barriers for them.
Russia has also a dispute with the EU pertaining to gin and the carbon tax. In reality, this is just a money grab. The environment is very important, and the climate agenda, but the carbon tax failed in Australia. Russia’s position is that a carbon tax violates WTO rules.
China is becoming desperate, and the Kremlin is looking to expand its geopolitical control around the globe. The drop of oil prices has tremendously hurt the Russian economy, as well as the sanctions that were imposed by the West.
The sanctions are rightfully imposed, especially given what happened. Unfortunately, the Saudis escaped without any sanctions for the brutal murder of journalist Jamal Khashoggi inside the Saudi consulate in Turkey.