Revealed Comparative Advantage BRICS-EU 28: Some New Evidence

The emergence of BRICS as major exporters on international markets is one of the drawing forces behind the industrialized countries’ loss of global markets. China has clearly become the most serious challenge to the EU’s industrial competitiveness. But the BRICs also provide formidable opportunities for exports. The motivation of our study is to focus on the trade relationship between BRICS and EU and through revealed comparative advantage indices to search for new opportunities and challenges created between those great partners. In the present study, focusing on the value of exports of BRICS (Brazil, Russia, India, China and South Africa) to EU28 for the period 2010–2016, we investigate first, in what and how many categories of goods each BRICS-member has a positive standard of normalized comparative effect and second we examined the trade pattern of these countries in respect to their exports to the European Union of 28. Using export data 1233 product groups 4 digits HS 2002 classification we constructed the Normalized Comparative Advantage (NRCA) index for each BRICS-member, and for each year of period 2001–2016.). The results suggest convergence of Brazil and S. Africa and divergence of Russia, China, India economies. Brazil is specialized in primary sector and minerals, Russia is specialized in basic metals, India and China are specialized in primary sector products but they have very strong presence in chemicals, semifinished products and manufacturing. Finally South Africa is specialized in primary sector, textiles and minerals.