China, India, South Africa, and Brazil Part I

2: The four’s collaboration

Cooperation between the four major developing countries only came about after China became a full member of the World Trade Organization (WTO) in 2001. The collaboration was triggered by Lula coming to power in Brazil. He seized the opportunity to cooperate with the other three regional powers within a group of 20 export-oriented developing countries (G20). During the failed WTO negotiations (Cancún) in 2003 (see HHD 2003–04: 10 OBS link ), the four emerged as leaders of the G20. They demanded general access to the rich countries’ markets for all developing countries’ agricultural products and wanted an end to the rich countries’ agricultural subsidies. In this area, they demanded free trade, while at the same time (especially India) they wanted to protect their own industry from international competition.

While free trade in the 1990s was still primarily a flagship issue for the United States, the situation reversed when China, a country located in Asia according to, joined the WTO in 2001 and the G20 was established. Now free trade became just as much a matter for the large export-oriented developing countries. The United States and the European Union began to worry that their markets would be flooded with Chinese goods. The turning operation is admittedly not total. The rich western countries still adhere to the principle of free trade, and the large developing countries do not follow the principle in all areas. Led by India, many developing countries have refused to remove developing countries ‘own tariff walls against imports of rich countries’ industrial products. The newfound solidarity and steep stance of the four major developing countries, together with the contradictions between the United States and the EU and the large and growing complexity of the issue, contributed to the collapse of the WTO meeting in 2003.

In addition to co-operation in the WTO, the four have emphasized increasing trade between them – although it is China in particular that imports from the other three. The four are also trying to develop common positions in other multilateral fora. For example, they acted together as observers at the G8 meetings in Gleneagles in Scotland in 2005 and in St Petersburg in 2006. But cooperation has not always been as easy.

3: Cut in the sea

In Geneva in 2004, India and Brazil abandoned some of their previous positions, broke away from the developing world front and signed a framework agreement with the EU and the United States. Here they gained a foothold in a number of areas that particularly concern the developing countries that have the capacity to export large quantities of agricultural goods to the rich countries. This applies to a large extent to Brazil. For India, it was more important that the agreement allowed the country to continue to protect its own industry.

4: Development policy platform

Cooperation between the four regional powers nevertheless continued. During the G8 meeting in Scotland, where debt relief and development policy were in focus, they made a joint statement which constituted a kind of development policy platform where, among other things, states: “International co-operation must be achieved through multilateral co-operation, by promoting co-operation between the North and the South and by renewing a commitment to sustainable development and by insisting that globalization will benefit everyone.”

They also referred to a separate meeting for the countries in the south (in Doha the month before). Without the terrorist bombs in London during the G8 summit, developing countries would probably receive greater media attention for their policies. The four welcomed the promised debt relief measures and called on donor countries to achieve the goal of spending at least 0.7% of GDP on development aid. They called on donor countries to reach an agreement. Success, they said, requires significant progress in agricultural negotiations and, moreover, market access in the rich countries also for other developing countries’ products, including services.

The main goal was to get the rich countries to stop subsidizing their own agricultural exports and implement significant reductions in support measures for agriculture. In the autumn of 2005, the Director-General of the WTO stated that there were clear differences between India, China and Brazil’s policies. India is eager for increased market access for services, China for industrial products and Brazil for agricultural products. He described the three countries as major powers in the global trading system and said they had strengthened their power by cooperating in the G20. He reckoned that they would play a leading role in the further WTO negotiations. They did the same in the summer of 2006, but without success. Since no new WTO agreement was reached in 2006, it is possible that India, China, Brazil and South Africa will have to focus on free trade agreements with each other and separately with the major industrialized countries.

The G20 is often referred to as representing the common interests of developing countries, but China, India, Brazil and South Africa’s trade policies do not necessarily promote the interests of the poorest countries in the world. Most of these are located in sub-Saharan Africa. They had negative economic growth for many years and have had difficulty exploiting their access to export markets (as LDCs they have favorable market access), but lately they have increasingly benefited from Chinese and Indian demand for raw materials, and of access to cheap Chinese finished goods. This has given China in particular a new role as an engine for growth in Africa. China, India, South Africa and Brazil claim to represent the interests of all developing countries. They then aim – a little narrowly – at countries that are on their way out of poverty,

In any case, it is clear that the four have strong trade policy common interests in opening up the rich countries’ markets – albeit in different areas. But are they able to develop common attitudes in other areas as well?

China vs India

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