In March 2013, the European Union and the United States of America launched negotiations on a transatlantic trade and investment partnership (TTIP). The free trade agreement between the two would be the largest trade deal in history. It should provide the EU with a boost of 0.5% in GDP growth. At the same time, the US is pursuing a free trade agreement in the Pacific. This Trans-Pacific Partnership would include the US, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. From both these agreements, one bloc is conspicuously missing. Where are the countries that have been such an important part of the global economic narrative for more than ten years now – where are the BRICs?
The Bertelsmann Foundation’s Global Economic Dynamics Visualizer tool (GED VIZ) offers a way of viewing trade flows year-on-year between different countries and blocs. Slides 1 and 2 show that the EU’s trade relationship with the BRIC countries is increasing in importance for Europe. The total value of exports from the EU to the powerhouse economies of Brazil, Russia, India and China rose from $80.6 billion in 2001 to $432.57 billion in 2011.  When the figures are viewed as a percentage of total EU trade, the growing weight of the relationship becomes even more clear. EU exports to the BRIC countries formed 14% of total EU exports in 2001. In 2011, exports to the BRICs made up 29.7% of all goods exported from the EU-27 – an average increase in share of EU exports of 1.5% a year.
Meanwhile, even as the value of EU exports to the US grows, the share of total EU exports sent to the US declines. Slides 3 and 4 show that in 2001, EU exports to the US were worth $233.8 billion, and by 2011, exports totalled $374.6 billion. But the percentage of total EU exports sent to the US dropped from 40.6% in 2001 to 25.8% in 2011 – an average drop in share of 1.5% a year, precisely matching the rise in importance of exports to the BRIC countries.
Even so, the EU is choosing to close ranks with the US, tightening its trade relationship and bolstering the already close integration between the trade regimes of the two sides. Part of the reason lies in the other side of the EU’s trade relationship with the BRIC countries: imports from the BRIC countries to the EU are increasing even more quickly than exports. Having another look at slides 1 and 2, one can see that EU imports from the BRIC countries were worth $157.94 billion in 2001, and by 2011, they amounted to $812.44 billion. In 2001, imports from the BRICs represented 25.1% of the EU’s total imports; by 2011, the BRICs were responsible for 47.3% of the EU-27’s imports, an average growth in share of 2.2% a year.
Throughout the period, the EU’s trade deficit has held steady – imports from the BRIC countries continue to increase alongside exports. The EU has long had serious concerns about the trade deficit with China in particular, blaming Chinese currency manipulation and trading practices for the gap. But the EU is running a trade deficit with the rest of the BRIC countries too. Slide 5 shows that in 2011, EU exports to China totalled $209.97 billion, while imports from China were $445.2 billion. The EU-27 exported $46.32 billion worth of goods to Brazil and imported goods with a value of $55.36 billion. Exports to India were worth $53.23 billion and imports totalled $58.89 billion. And exports to Russia amounted to $123.05 billion, with imports more than double that, at $252.99 billion.
So, the EU is turning to its trade relationship with the US to increase its competitiveness. In this relationship, trade flows are only part of the story: investment between the EU and the US is far greater than either party’s investment in the BRIC countries. With companies from either side active in both jurisdictions, strengthened links could promote investment and improve job growth both in the US and in the EU. And aligning regulations and norms would lessen costs for companies on both sides of the Atlantic.
Aside from the benefits of cooperation, the closer EU-US partnership is certainly also intended to shut out the BRIC countries. According to the UNDP, Brazil, China and India’s combined output will by 2020 be greater than the combined GDP of the US, the UK, Canada, France, Germany and Italy.  The renminbi’s increasing internationalisation threatens the power of the dollar and the euro, and south-south trade is growing. By 2030, 70% of the world’s consumption expenditure will come from the global south. This represents an opportunity for the developed economies, in that new markets will be available to their industries. But with intra-BRIC trade on the rise, companies from these emerging markets are often better prepared to sell at low cost to consumers with limited incomes.
At the same time, the increased economic weight of China in particular argues for its greater inclusion in global economic decision-making. The TTIP represents a way for the EU and the US to forestall this eventuality for a little while longer. As the Doha round of WTO trade talks continues to struggle, a bilateral agreement between the two huge economies would enable the EU and the US to lay down rules much more easily than they could within the WTO framework, in which the BRIC countries have the power to block initiatives. On issues such as intellectual property and employment protection, the EU and the US have much more in common with each other than they do with the emerging economies. By agreeing standards together, they can establish norms that the BRIC countries may later be forced to accept.
TTIP likely signals an intention from both the EU and the US to revitalise their political engagement alongside their economic cooperation, to put the transatlantic partnership back at the heart of global affairs. But in doing so, the two powers have challenged the BRIC countries to find a way to fight back. Along with their junior partner, South Africa, the BRIC countries as a bloc have so far focused on political and symbolic cooperation rather than economic integration: none of the countries has a free trade agreement with any of the others. Ahead of the fifth BRICS summit in March 2013, Chinese experts called on leaders to propose a free trade agreement between the BRICS. Any such agreement is a long way off. But the EU-US move to sideline the BRICS could have the opposite effect to that intended. By encouraging the group to seek greater bargaining power through economic cooperation, it might cause the BRICS to emerge with an even stronger voice on the world economic stage.
 In order to allow comparison, the 2001 data referring to the EU includes not only the then 15 EU member states, but also the 12 states which will later join them to form the EU-27.
 Transatlantic free trade?, by Javier Solana, in: EuropeanVoice.com, 04.01.2013. Available at www.europeanvoice.com/article/2013/january/transatlantic-free-trade-/76092.aspx
 Experts call for BRICS free trade pact, by Li Jiabao, in: China Daily, 27.03.2013. Available at: www.chinadaily.com.cn/china/2013-03/27/content_16347695.htm