Relations Between EU and BRIC Countries Social Policy Essay

BRIC, is an acronym apparent first used in Goldman Sachs investment bank by Jim O’Neill in 2001. It contains four largest and fastest growing emerging economies (Brazil, Russia, India and China). (Goldmann Sachs, 2003) All the four countries have some common features, as Havlik et al (2009) state, including large territory and population, low income level but fast economic growth.

The four countries encompass over 25% of the world’s land coverage and 40% of the world’s population, and they might become among the four most dominant economies by 2050, as O’Neill and Stupnytska (2009) argued, it is now possible that China will become as big as the US by 2027 and the BRICs as big as the G7 by 2032. The power base of these actors is their respective region, but in some circumstances their influence may be global.

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The relationship between the EU and BRIC countries confronts both challenges and opportunities in the aspect of politic and economy which are the follows. Firstly, EU is the biggest world exporter; in imports it ranked second after the USA, while BRIC countries are among the most potential countries. There exists direct conflict of interest between EU and the BRICS, including the lack of results from the Doha Development Agenda indicates and the disagreement on agricultural liberalization and the fear by EU of the strong competitiveness of the BRICS in this area. Secondly, the consequent return to a system of bilateral agreements and FTAs will mean that large WTO members would be able to strong-arm the small members. Thirdly, problematic that the EU continues to patronizing as a major economic “old” power. Instead the EU should accept and foster more actively the new leadership roles of the BRICS countries. Fourthly, the EU is still to a large degree defined by its defensive attitude and the BRIC(S) is to some degree perceived as a threat. Fifthly ,according to Leal-Arcas: “…it is not about what, but how you negotiate”. This points toward that the EU should negotiate on a basic of equality, reciprocity and with mutual respect towards its partners. Last but not least, Strategic Partnership Agreements with the BRIC countries.

The following section is divided into four parts according to four BRIC countries. Detailed introductions and discussions about the relationship between EU and each country are shown.


Brazil is the 5th largest country by geographical area and 8th biggest in national population in the world. Its nominal GDP reaches 1.6 billion US dollars, ranking the 8th of the world. (Wilson and Stupnytska, 2007)

In terms of the relation with the EU, Brazil established diplomatic relations with the EU IN 1960, and the present relationship is governed by three documents, which are the EC-Brazil framework co-operation agreement (1992), EU-Mercosur Framework Cooperation Agreement (1995) and the Agreement for scientific and technological cooperation (2004).

Brazil is the EU’s main trading partner in Latin America. In 2007, EU good exported to Brazil achieves 21.2 billion Euros and imported from Brazil amount to 32.3 billion. Brazil benefits from close and strong economic and political relations with Europe, with the two sides having several complementarities


Russia is the world’s largest country with population of 140.9 million. And its nominal GDP is around US$1,6bn, the 9th in the world.

Russia signed a Partnership and Cooperation Agreement with the EU in 1997. The goods it imports from the EU is 105 billion Euros in 2008, and exports to EU account for 173.2 billion Euros, most of which are the energy goods. The relation between Russia and the EU is not easy to be improved because of its contradictory positions among EU members. However, in the may of 2005, the roadmap for common economic space was adopted during the EU-Russia summit. The main issue between the EU and Russia always relates to the energy, gas in particular.


India is the seventh-largest country by geographical area, the second-most populous country, its nominal GDB reached 1.2 trillion last year

India is an important trade partner for the EU and a growing global economic power. It combines a sizable and growing market of more than 1 billion people with a growth rate of between 8 and 10 % – one of the fastest growing economies in the world.

India was one of the first countries to develop relations with the Union, signing bilateral agreements in 1973,when the United Kingdom joined.

In 1994, the current legislative framework for cooperation, the ‘Cooperation Agreement between the European Community and the Republic of India on partnership and development’ was signed which took bilateral relations beyond merely trade and economic cooperation and paved the way for annual EU-India Summits and regular ministerial and expert level meetings.

In 2004, the EU-India relationship was ‘upgraded’ to the level of a ‘Strategic Partnership’ and 2005 an ‘EU-India Action Plan’ (revised in 2008) was jointly elaborated to further extend bilateral relations to noneconomic areas (e.g. security policy, education and academic exchanges, cultural cooperation),


China is the most populous state in the world with over 1.3 billion people. At about 9.6 million square kilometers, the PRC is the world’s third largest country by total area

In respect of economy, China is the world’s largest exporter and second largest importer of goods. It ranks the third largest economy nominally with the nominal GDP of 4908 billion US dollars. Regarding to the political aspect, China is a permanent member of the United Nations Security Council and a member of multilateral organizations as well, including the WTO, APEC, G-20 and the Shanghai Cooperation Organization.

The first ‘Trade Agreement’ between China and the European Economic Community (EEC) was concluded in 1978. It was substituted by the ‘EEC-China Trade and Economic Cooperation Agreement’ in 1985, which is still in force now.

The EU and China have the world’s second most important trade-and-investment relationship (after the transatlantic relationship). The EU is China’s biggest trading partner. China is the EU’s second biggest trading partner and its biggest source of goods imports. European multinationals have poured investment into China and are prominent in east-Asian supply chains (in which China is usually the last assembly stage before finished products are exported back to the West). Such deep commercial relations lead inexorably to commercial and political tensions, as they do in US-China relations. However, a huge trade deficit of EU is a main problem in relation of China and the EU.

Currently, the relation between China and the EU is mainly impacted by the following two main issues. One the EU arms embargo (in force since 1989) and related restrictions on European high-tech exports to China. The other is the anti-dumping launched by EU against China. (Goods refer to Textiles, clothing, footwear, metal manufactures, and various low-tech manufactures)

BRIC(S) countries in Financial Crisis

The four BRIC nations in total produce 14.6 percent of the world’s gross domestic product, and take up 12.8 percent of the global trade volume. Their contribution to the world’s economic growth amounts to 50 percent in terms of purchasing power parity.

Since the first BRIC summit was held in Yekaterinburg, the four countries have become prominent driving forces behind the global economic warm-up. The BRIC countries met for their first official summit on 16th June 2009 in Yekaterinburg of Russia, and the second one is hold at Brasilia of Brazil on 16th April this year.

These summits, to some extent, contribute to the world’s recovery for the global financial crisis. For example, one week prior to the second summit, China announced plans to invest a total of $50.1 billion and Russia planned to invest $10 billion. In addition, Brazil offered $10 billion to the International Monetary Fund, which was the first time that Brazil had ever made such a loan.

Even in the European Economic Recovery Plan, Commission of the European Communities regards the continuing dialogues with key bilateral partners such as the BRIC countries as an important way to help the EU to recover from the financial crisis.


Despite of the current world financial crisis, the economic of BRIC countries still experience a considerable increase, which induce lots of new opportunities and numerous challenges as well for the rest of the world, particularly the EU.

The BRIC countries have some common features, while each of them has different situations that generate different challenges and opportunities to other countries. Take the EU for example, it requires the EU to adopt different policies to each BRIC countries to generate maximum interest for the EU.


Havlik et al (2009),

Peter Havlik1

Roman Stollinger1

Olga Pindyuk1

Gabor Hunya1

Bernhard Dachs2

Carolina Lennon1

Marcos Poplawski Ribeiro3

Jayati Ghosh4

Waltraut Urban1

Vasily Astrov1

Edward Christie1

EU and BRICs: Challenges and opportunities for European competitiveness and cooperation

Jim O’Neill and Anna Stupnytska, 2009, The Long-Term Outlook for the

BRICs and N-11 Post Crisis, Goldman Sachs Global Economics,

Commodities and Strategy Research

Global Economics Paper No: 192

Dominic Wilson and Anna Stupnytska, 2007, The N-11: More Than an Acronym, GS GLOBAL ECONOMIC WEBSITE

Economic Research from the GS Institutional Portal


Global Economics Paper No: 153

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