India, Brazil, South Africa eye to revive south-south trade ties
New Delhi, August 16:
An ambitious attempt to revive South-South economic cooperation around India, Brazil and South Africa (IBSA) is expected to receive a major fillip when the heads of state of these developing country majors meet in Brazil during the second week of September.
While the IBSA countries compete with one another in world markets and logistical constraints hamper expansion of trade, analysts believe there exists considerable opportunity for these three developing countries to technically collaborate with one another in specific high-vallue areas such as aerospace and atomic energy.
On Septembet 13, when India’s prime minister Manmohan Singh meets his counterparts from Brazil and South Africa, an attempt would be made for a trilateral free trade area (FTA) agreement.
The proposed agreement would not just be among the three countries but involve regional groupings, that is, SACU or the South African Customs Union (comprising South Africa, Botswana, Lesotho, Swaziland and Namibia) and MERCOSUR or Mercado Común del Sur (comprising Brazil, Argentina, Uruguay, Paraguay and Venezuela — with Bolivia expected to join in).
It was in June 2003 that the foreign ministers of India, Brazil and South Africa first met in Brasilia to set up the IBSA dialogue forum. This forum became a formal initiative with meetings in New Delhi (March 2004), Cape Town (March 2005) and Rio de Janeiro (March 2006). There is agreement that trade among India, SACU and MERCOSUR can go up in the years ahead.
Intra-IBSA trade currently accounts for only two per cent of the total volume of trade carried out by the IBSA countries. No single IBSA country is among the top ten trading partners of the other two countries. Yet, trade among the three countries and regional groupings has gone up considerably in recent years.
Two-way trade between India and MERCOSUR more than doubled between 2001 and 2005 from less than one billion US dollars to $2.3 billion. Similarly, bilateral trade between India and South Africa has gone up by 133 per cent in these four years from 1.3 billion dollars to 3.1 billion dollars. Trade among the IBSA nations could rise to 10 billion dollars by 2007.
After a series of discussions among representatives of four academic institutions and non-government organizations — the South African Institute of International Affairs (SAIIA), Business Unity South Africa (BUSA), the Consumer Unity & Trust Society (CUTS) from India
and the Institute for International Trade Negotiations (ICONE) from Brazil — the conclusion that emerged is that the IBSA countries would benefit considerably if they cooperated with one another.