Brics' Delhi Declaration opposes unilateral trade measures, flags CBAM

The Brics New Delhi Declaration opposes CBAM and unilateral tariff and non-tariff measures, while backing greater customs cooperation and local-currency trade settlement

The New Delhi Declaration issued at the 18th Brics Summit voiced opposition to the Carbon Border Adjustment Mechanism (CBAM) and other unilateral measures that impeded trade. While the summit concludes on Sunday, the grouping approved the declaration on Saturday itself.

 

"We oppose unilateral, punitive, discriminatory and protectionist measures that are not in line with international law, such as carbon border adjustment mechanisms, and express concern that such measures undermine efforts by countries, specifically the developing countries, aimed at addressing the adverse impacts of climate change, increasing adaptive capacity and resilience," the New Delhi Declaration said.

 

The European Union (EU) has been the first to implement CBAM and begin collection of a carbon tax. The United Kingdom (UK) also plans to operationalise CBAM next year.

  

While the Brics Finance Ministers and Central Bank Governors (FMCBG) joint statement, issued on Friday, also condemned unilateral tariff and non-tariff measures, it did not particularly identify any of the measures.

 

CBAM has long been a concern for India. In fact, it was a major sticking point during New Delhi's negotiations with Brussels for a free trade agreement (FTA).

 

The New Delhi Declaration also opposed unilateral tariff measures that impede trade. While it did not name any such action, most economies globally were just last year subjected to steep reciprocal tariffs by the United States (US).

 

"We voice serious concerns about the rise of unilateral tariff and non-tariff measures which distort trade and are inconsistent with WTO rules," the New Delhi Declaration said.

 

The Brics economies aim to work in collaboration to enhance the World Trade Organization’s responsiveness to trade disruptions and the needs and priorities of emerging markets and developing economies, the Declaration said. They also plan to advance discussions on outstanding issues and support balanced, inclusive and concrete outcomes that strengthen the multilateral trading system and enable it to better address evolving global challenges.

 

At the 18th Brics Summit, the grouping also made progress towards a pact on cooperation and mutual administrative assistance in customs matters and agreed to strengthen collaboration on authorised economic operator (AEO) programmes and cross-border enforcement.

 

"We welcome the convergence achieved on the BRICS Agreement on Cooperation and Mutual Administrative Assistance in Customs Matters, the willingness of members ready to proceed with its signing, subject to completion of the necessary national processes and efforts to secure participation of all Brics countries," the New Delhi Declaration said.

 

The Brics nations plan to work towards an annual joint customs enforcement operation to identify emerging customs threats along with cross-border smuggling trends.

 

Better economic integration and strengthening intra-Brics trade remained a key discussion point at the summit. The 11-member grouping endorsed efforts towards trade settlement in local currencies at the summit.

 

"We encourage the BPTF (Brics Payment Task Force) to continue discussions, building on the ongoing work, to facilitate practical solutions for cross-border payments among BRICS countries, which are fast, low-cost, more accessible, efficient, transparent, and safe," the Declaration said.

 

Having an alternative option for trade settlement along with the dollar is a priority for the grouping, considering two of the member economies — Russia and Iran — remain susceptible to economic sanctions.

 

In fact, New Delhi explored local currency settlement with Russia in the aftermath of the Ukraine war as Western economies banned major Russian banks from the Society for Worldwide Interbank Financial Telecommunication (SWIFT), the international payment messaging system, as part of economic sanctions on Moscow.