BRICS finance chiefs flag tariff risks, push cross-border payments

New Delhi: Finance ministers and central bank governors of BRICS countries raised concerns over unilateral trade and finance-related measures, including higher tariffs and non-tariff barriers, while endorsing more efforts towards cross-border payment interoperability and local-currency settlements.

The group also called for reforms of the Bretton Woods institutions, including the IMF and World Bank, to give emerging markets and developing economies greater voice and representation. It urged meaningful quota realignment under the IMF's 17th General Review of Quotas and said reforms should reflect the changing weight of emerging economies in the global economy.

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"We...reiterate that quota realignment should reflect countries' relative positions in the global economy, increase the quota and voting shares of Emerging Markets and Developing Economies (EMDE) and should not come at the expense of developing countries, while ensuring that a new, simple, and transparent quota formula protects the quota shares of the poorest members and guides but does not constrain access to Fund resources," according to a joint statement issued Friday. "We also believe that any voluntary financial contributions should not influence quota allocation, governance representation and voting power."

According to the statement issued after a meeting of BRICS finance ministers and central bank governors in Mumbai Thursday, the leaders said the BRICS Payment Task Force had been studying interoperability of cross-border payment and messaging channels as part of the BRICS Cross-Border Payments Initiative. The group, however, acknowledged that there is "no one-size-fits-all approach" to promoting local-currency settlements, emphasising that such efforts would respect national priorities.

"We continue to have serious concerns with the unilateral imposition of trade and finance-related actions, including the raising of tariffs and non-tariff measures, which distort trade and are inconsistent with World Trade Organisation rules," the group said. "These pressures weigh most heavily on EMDEs."

Also Read: BRICS fin mins, central bank chiefs raise concerns on unilateral trade and finance-related measures

The BRICS members pushed for mobilising development finance, reaffirming the role of multilateralism and strengthening international financial cooperation.

"The global economy is facing significant headwinds... Risks to the global economic outlook remain elevated," they said.