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TRADE: Brazil, India and South Africa Optimistic About Future Ties

Felipe Seligman

BRASILIA, Sep 13 2006 (IPS) - The first India, Brazil, South Africa (IBSA) summit ended Wednesday in Brasilia with optimism expressed by the leaders regarding ambitious active cooperation plans among these emerging powers of the developing South and promises for future initiatives in economic and cultural complementation.

The steps taken in the meeting, according to Brazilian President Luiz Inácio Lula da Silva, were fundamental in "overcoming historical, geographic, cultural and mental barriers that have always made us look to the North rather than the South."

Five trilateral agreements and memoranda of understandings were signed by ministers from the three countries, in areas like maritime services, agriculture, biofuels and information technologies.

However, as expected, no agreement was signed to begin negotiations towards a free trade agreement.

"The idea of the summit was to deepen and unify ongoing debates in different areas, and that is what happened," the Brazilian Foreign Ministry&#39s press relations officer, Ricardo Neiva Tavares, told IPS.

The IBSA Dialogue Forum was suggested in 2003 by South African President Thabo Mbeki when Lula took office in Brasilia. Since then, trade and cultural relations between the three nations have expanded significantly.

For example, between 2001 and 2005, trade between India and the Mercosur trade bloc, made up of Argentina, Brazil, Paraguay and Uruguay, grew from less than one billion dollars to 2.3 billion.

Trade between India and South Africa climbed 133 percent in the same period, from 1.3 billion to 3.1 billion dollars.

The IBSA negotiations are aimed at raising trilateral trade flows to 10 billion dollars next year.

But trade between the three countries represents just two percent of the total combined volume of their trade. South African Trade and Industry Minister Mandisi Mpahlwa said all three countries have potential, but that they are still talking in superficial terms. Areas of cooperation must be identified, he added, in order to see concrete changes.

According to Mbeki, the adoption of a free trade agreement between these three nations would be an unprecedented step in the world trade system, which means it is essential for it to be taken in an appropriate manner.

Although many advances were seen in Wednesday&#39s meeting, it was already clear that there would be no new developments in terms of a free trade accord, said professor of international relations Paulo Vizentini at the Federal University of Rio Grande do Sul..

"After the Sep. 11, 2001 terrorist attacks (in New York and Washington), economic negotiations were pushed to the backburner by discussions on international security. For example, the negotiations on the FTAA (Free Trade Area of the Americas) and in the WTO (World Trade Organisation) have ground to a halt. That is why we already knew what would happen here," Vizentini told IPS.

Nevertheless, concrete accomplishments were seen in certain areas. According to Rogelio Golfarb, president of the National Association of Automotive Vehicle Manufacturers, which participated in the summit activities in representation of Brazil&#39s business community, good opportunities for business complementation emerged.

Brazil and South Africa adopted a three-year pilot project for the export and import of cars and spare parts. At the same time, Brazil and India agreed on the sharing of alternative technologies.

"All of this is complementation," Golfarb told journalists. "South Africa specialises in luxury automobiles, and Mercosur is strong in the production of compact cars. India expressed great interest in the production of ethanol fuel (produced from sugar cane) and biodiesel, and Brazil expressed interest in Indian techniques for producing wind and solar energy."

"But we need things to move rapidly, because the global market is very competitive. That is why new meetings have already been scheduled for next month, and I believe that these business ventures will be up and running by late 2007," he added.

The summit was also a good opportunity for the three countries to stress their points of view on the resumption of the WTO Doha Round of multilateral trade talks, and on U.S. Security Council reform to incorporate permanent and rotating members from Latin America, Asia and Africa.

Indian Prime Minister Manmohan Singh said the usefulness of IBSA in the international community was clear in the leadership role that the three countries played in the Group of 20 (G20) developing nations in the WTO negotiations.

The members of the G20 are pushing for an end to trade-distorting agricultural subsidies and the protectionism exercised by the industrial powers.

Parallel to the summit, an academic seminar brought together university professors from the three countries, with the aim of forging closer cultural ties.

"The seminar served as ammunition for the summit of heads of state and government. Among the range of issues that were discussed, a proposal emerged to create a news agency dedicated to the three continents where the IBSA countries are leaders," the organiser of the seminar, Jer- nimo Moscardo, president of the Alexandre Gusmão Foundation, told IPS.

"We saw that we had much in common, but that the lack of information about our countries is still a barrier for more effective interaction," he said.

A second IBSA summit will be held next year in South Africa, although the precise dates have not been set.