By Mary Hightower
The global trading landscape is shifting as Brazil, Russia, India, China and South Africa — along with countries in the Middle East and Southeast Asia — create their own trading bloc which will have implications for global competitiveness of soybeans, rice and cotton from the United States.
With the recent inclusion of Egypt, Ethiopia, Iran, the United Arab Emirates and Indonesia, what’s known BRICS+ aims to “leverage the increase in their combined gross domestic product, or GDP, and global share in commodity production and trade to reduce its reliance on the U.S. dollar,” said Ryan Loy, extension agricultural economist with the University of Arkansas System Division of Agriculture.
“What those countries produce altogether accounts for about 25 percent of the global world output,” he said. “The combined GDP now is nearly exactly the same as that of the United States, which has really steadily lost GDP share since about 2000.”
Of particular interest to the U.S. and Arkansas is that the BRICS+ nations “combined currently produce about 44 percent of the world’s grain, 33 percent of the total wheat and rice exports in the world, and about 25 percent of the global corn exports,” Loy said.
“Currently, a significant portion of international debt instruments are issued in U.S. dollars and must be repaid in U.S. dollars, and a majority of global trades are settled in U.S. dollars,” Loy said. “What they’re trying to do is remove the U.S. dollar as the global standard and safe-haven currency.”
Source : uada.edu