Trade between India, Brazil and South Africa (Ibsa) is nudging towards its $10-billion target, and business leaders and government representatives are already proposing a higher trade flow target, but barriers ranging from tariffs to logistical stumbling blocks first needed to be dealt with.
Various business leaders from India, Brazil and South Africa, attending the second Ibsa summit in Johannesburg, suggested on Tuesday that the trilateral trade between the countries could grow to somewhere between $15-billion and $20-billion over the next three to four years.
Companies from developing countries, such as India, Brazil and South Africa, could increase trade by forging cooperative arrangements on transport, communications and technology sharing, South Africa's Trade and Industry Minister Mandisi Mpahlwa said, but added that the issue of trade tariffs could not be overlooked.
He said that it was more difficult to make progress in tariff negotiations aimed at broadening the economic space for companies and industries, as industrial development was still under way in the three countries, and that widespread poverty, unemployment and a host of development problems were common in the regions.
It is difficult to open markets that may place severe pressure on domestic production and exacerbate unemployment. The key issue is whether our industrial and agricultural structures are complementary or directly competitive with each other."
Mpahlwa said that a more limited preferential trade agreement, as covered by the enabling clause in the World Trade Organisations rules, would be more appropriate, but that India, Brazil and South Africa would have to seek to broaden the scope of an exchange of tariff preferences beyond the current level of exchanges of preference.
It seems to me, this is the crux of the matter, and a challenge we need to confront squarely, he told business delegates attending the Ibsa summit, which aims to promote South-South trade.
Meanwhile, various business leaders flagged concerns about air and sea connectivity between the three countries and access to travel permits as some of the key sticking points.
People complain that if they are want visas from South Africa, particularly people from India, they take a long time