The BRICS 2012 Summit

Brazil's Trade and Industry Minister Fernando Pimentel set the stage for a new global confrontation at the BRICS summit today. Gathering in India, along with the heads of state of India China,Russia and South Africa, President Dilma Rousseff and her government's delegation have offered sharp words about the dollar and euro liquidity glut that has driven hot money into Brazil's economy. A communique will be issued jointly by the BRICS stating the concern that American and EU economic policies are forcing rising powers to consider protective tariffs and action at the World Trade Organization.

The language has been direct. Said Pimentel: "Today's (problem) doesn't have to do with China," he said in a 30-minute interview on the eve of the summit in New Delhi. "It has to do with the dollar and the euro."

While such collective brokering seems to look askance at the years of Chinese currency manipulation, the implication of joint action would put pressure on US and EU trade. Watch this space as Brazil and China seek to shore up their current trade relations and amp up their protectionist policies...