Argentina Is Officially Invited To Join The BRICS: Are International Economic Relations Shifting South?
| Published date | 25 September 2023 |
| Subject Matter | International Law, International Trade & Investment, Export Controls & Trade & Investment Sanctions |
| Law Firm | Herbert Smith Freehills |
| Author | Dr. Patricia Nacimiento, Andrés E. Alvarado-Garzón and Lucila Marchini |
On 24 August 2023, during the 15th BRICS Summit, it was publicly announced that the Argentine Republic was invited to join BRICS as of 1st January 2024. Current president of Argentina, Mr Alberto 'ngel Fern'ndez communicated that the BRICS membership is expected to open new markets, facilitate investment flow and increase exports for the state.
Background: What is BRICS and what is its economic relevance?
"BRICS" stands for the initials of its current members: Brazil, Russia, India, China and South Africa. It constitutes an economic and political association, whose main proclaimed goal is to strengthen cooperation among its members and with third parties.
The history of BRICS can be traced back to its first informal meeting in 2006 between its original members Brazil, Russia, India and China. At the end of 2010, South Africa was officially invited to join the association. The reach of BRICS is anything but negligible. It encompasses 42% of the global population and approximately 27% of the world's land surface. In economic terms, the BRICS accounts for around 25% of the global GDP and 18% of global exports.
The BRICS does not have international legal personality, a secretariat, headquarters, or clearly defined rules. However, the BRICS has created two economic instruments: the Contingent Reserve Arrangement (CRA) and New Development Bank (NDB).
On the one hand, the CRA was created pursuant to the Treaty for the Establishment of a BRICS Contingent Reserve Arrangement of 2014 among the BRICS members, which seeks to provide support and protection against global liquidity pressures. On the other hand, the NDB is operated by the BRICS members, with headquarters in Shanghai, and its main lending focus is infrastructure and sustainable development projects. The NDB is considered as an alternative to the International Monetary Fund (IMF) especially for emerging markets and developing states.
According to the United Nations Conference on Trade and Development (UNCTAD), the BRICS members' share in the world foreign direct investment (FDI) inflow is approximately 21%. The BRICS members have 246 investment treaties in force. China is heading the list with 128 investment treaties in place, and a recent focus on comprehensive free trade agreements covering other types of economic cooperation.
Interestingly, the BRICS members only have signed four bilateral investment treaties among themselves (i.e., Brazil-India, China-Russia, South Africa-Russia and China-South...
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