SACCI President Advocate Mtho Xulu assumed the position of chairperson of the BRICS Working Group on Trade and Investment in May 2023 towards South Africa’s hosting of the BRICS Summit. He reflects on the importance to South African business of the international grouping and its deliberations.
South Africa proudly hosted the 15th BRICS Summit in Johannesburg in August 2023. The summit, which was held under the heading, “BRICS and Africa: Partnership for Mutually Accelerated Growth, Sustainable Development and Inclusive Multilateralism”, will be remembered as the summit where the five member states made a commitment to expand the group to include several other countries.
But another significant anniversary took place that was celebrated, it being 10 years since the BRICS Business Council (BBC) was established during the Fifth BRICS Summit held in 2013 in Durban. The idea behind the Council was to constitute a platform which will promote and strengthen business, trade and investment ties among the business communities of the five BRICS countries, ensure that there is regular dialogue between the business communities and governments of the BRICS nations and identify problems and bottlenecks to ensure greater economic, trade and investment ties. The BBC is divided into various Working Groups, and each nation has its own chapter which runs the relevant Working Groups. When a particular country hosts the BRICS Summit, the host country becomes the Chairperson of the Working Group. The SACCI President was duly appointed to that position. As Advocate Xulu says, “I was honoured to be appointed by the BRICS Business Council to chair this important Working Group that has a very specific mandate to deepen and balance trade and investment among members states and the economies and have a bearing on BRICS.”
The task of the chairperson is to maintain relations with colleagues in other chapters, but also, as Advocate Xulu explains, it entails “mobilising resources and expertise to fulfil the mandate of the working group, building synergies with the other working groups and facilitating knowledge sharing with domestic and international actors who have an interest in the trade and investment affairs of BRICS”.
The benefits to South African business of being part of such Working Groups are clear to Advocate Xulu: “It gives us access to a platform of peers where we gain access to market-access opportunities for South African goods and services, investment pools to drive industrialisation, entrepreneurship and innovation and expert exchanges that will enable South Africa to become globally competitive.”
Background to Trade and Investment Working Group
The Trade and Investment Working Group is a cross-cutting Working Group, working in partnership with the other Working Groups to identify barriers to trade and investment in the targeted sectors and seeking ways to overcome these barriers.
A key objective of the Working Group is to strengthen and promote economic, trade, business and investment ties among the business communities of the five BRICS countries.
The purpose of the Working Group is to implement a more targeted approach towards:
- the analysis of trade between the BRICS countries
- the fostering of regulatory harmonisation to increase trade between member countries
- the identification of trade barriers within specific industries
- making recommendations on how these barriers might be overcome through multilateral or bilateral solutions
- the examination of global trade and investment measures that have a bearing on BRICS economies and evolving common positions on the same.
The various Working Groups will now follow up on these objectives, which were adopted by the 15th BRICS Summit.
Focus on trade and investment promotion
With regard to promoting trade and investment between BRICS member nations, the Working Group has identified a number of areas where specific steps can be taken to achieve these aims through data-driven decision-making. Concrete steps can be taken to:
- track trade statistics among the BRICS nations
- propose solutions to identified non-tariff barrier challenges
- enhance the complementarities and opportunities
- promote and enhance mutual trade and investment, creating a business-friendly environment for investors and entrepreneurs in all BRICS and African countries
- develop a BRICS calendar of trade and investment promotion events to allow for joint participation
- develop joint statements on trade, investments and sustainable growth in coordination with the other Working Groups
- identify key industries for focused in-depth research and best-practice sharing
- share information among BRICS countries on exchanges and capacity-building programmes
- identify areas where trade performance has not met expectations, understand the cause of the underperformances and develop solutions to drive trade and investment.
Regarding implementation, Advocate Xulu notes that it is up to the Working Groups to carry them out. He adds: “An annual review will be conducted at the 16th BRICS Summit in Russia 2024.”
Opportunity areas to drive trade and investment
At the Johannesburg Summit, the South African delegation particularly discussed the opportunities that the trade deficit presents. As Advocate Xulu points out, there are opportunities to use it “to grow and modernise our exports to the other member states. We also highlighted the need to take advantage of the popularity of our raw mineral and agricultural commodities, by building horizontal and vertical integration for each commodity, thus growing and strengthening the domestic industrial base.” A goal of the Working Group is to reduce the trade deficit and improve the trade balance between members, we need to enhance solidarity between member states and to strengthen bilateral and multilateral trade and investment.
This can be achieved by focussing on four main areas:
- Establish strategic economic partnerships with BRICS nations to expand trade and investment opportunities
- Promote trade fairs, exhibitions and business forums to attract BRICS nations companies and investors
- Deploy expertise in infrastructure development and help African countries in sectors such as transportation, energy and communication
- Build strong infrastructure networks to enhance regional connectivity and facilitate trade under AfCFTA
- BRICS nations offer various financing mechanisms for infrastructure and development projects
- Explore financial cooperation opportunities, including bilateral investment agreements, infrastructure funds and loans from the New Development Bank
Knowledge exchange and capacity building
- BRICS nations have experts in various sectors. Organise exchange programmes, training and capacity-building initiatives to enhance skills and knowledge transfer.
As to whether there is value to be gained from the Working Group, Advocate Xulu reflects, “The unique value of this Working Group is its focussed mandate on the practicalities of economic cooperation of the real transactions regarding trade and investment among member countries.”