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Free trade zones on agenda for BRICS

By Wang Yanfei | China Daily | Updated: 2017-09-01 07:13

Free trade zones on agenda for BRICS

[Photo/China Daily]

In their upcoming summit, BRICS countries are expected to discuss using free trade zones as an early, practical step toward fulfilling their goal of enhancing regional trade and investment, experts at high-level government think tanks said on Thursday.

"By the end of 2020, each BRICS member is expected to set up a clear road map for promoting trade," said Ye Fujing, director of the Institute for International Economic Research, a think tank under the National Development and Reform Commission, the country's top economic planner. "As part of that effort, BRICS members will discuss establishing free trade zones during the upcoming summit."

The BRICS Summit will be held in Xiamen, Fujian province, from Sunday to Tuesday.

Ye said the idea of setting up such zones among those countries is "preliminary". There is no specific timetable yet. "Member countries can start by lowering trade barriers under the WTO framework, gathering some experience for establishing free trade zones."

Bai Ming, a researcher at the Chinese Academy of International Trade and Economic Cooperation, a think tank under the Ministry of Commerce, said it may take a long time to get the idea off the ground-it is a big challenge to balance the interests of members that have all joined other regional groups and alliances.

Bai cited the example of Brazil, a member of Mercosur, a common market in Latin America. The regional bloc's members have eliminated all tariff barriers that could affect their economies and apply a common external tariff to nonmember economies.

"Brazil needs to seek the consensus of other members (of Mercosur) before getting involved in a new free trade alliance," he said.

Bai said BRICS can speed up the process by inviting nonmembers into the discussion of building free trade zones. They might be trade partners of BRICS countries, who are expected to have interests similar to those of BRICS members.

This year, China came up with the idea of extending the partnerships of BRICS and widening the circle by inviting other developing countries under a new banner, BRICS Plus.

Five nonmember countries-Egypt, Guinea, Mexico, Tajikistan and Thailand-will attend the summit as guests.

Improving BRICS trade facilitation is a practical step that can be taken in the short run, at a time when trade frictions are common among its members, according to Feng Xingke, deputy secretary-general of Tsinghua University's BRICS Economic Think Tank.

While friction is quite normal among emerging economies and can be properly solved via the WTO, it means the countries can only gradually turn cooperative visions into practical steps, Feng said.

"There is no shortcut," he said. "Free trade zones will be a natural outcome with fewer trade disputes and more resilient regional economies."

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