February 16, 2005, Indo-Asian News Service
By Fakir Hassen

Johannesburg, Nov 27 (IANS) Civil Society organisations in India, Brazil and South Africa are to conduct detailed research studies into the development of the India-Brazil-South Africa Trade Agreement that was mooted two years ago for establishing a new powerful economic bloc in the southern hemisphere.

This follows claims at a conference here by representatives of the private sectors in South Africa and Brazil that there is a lack of consultation by their governments in the IBSA process, even though Indian delegates felt this was not the case at home.

The conference was hosted by the South African Institute of International Affairs (SAIIA), which is the local partner in a research process into the IBSA agreement. The lead partner in the process is the Indian organisation Consumer Unity and Trust Society (CUTS), while the Brazilian Institute for International Trade will take care of the third leg.

The three organisations will now agree on methodologies for conducting research in all three countries which will be shared with all the stakeholders in the IBSA process within a year.

Each country will produce a paper which will incorporate a qualitative analysis of what would happen if they opened up their economies and a qualitative survey of the opinions of major stakeholders such as government, private sector and non-governmental organisations.

The issue of consultation between government and business is not a serious issue in India, according to Sheila Sudhakaran, Head of the Africa Division at the Federation of Indian Chambers of Commerce and Industry (FICCI).

“In India we are regularly consulted; the problem is now with the industry,” Sudhakaran told IANS.

“They are so slow in their response, and very confidential, especially in certain areas where competition is high, like the pharmaceutical sector. If you want to get feedback or inputs from them on the issues, what their predictions or forecasts are, they are not frank. But once they are convinced about the intentions of the government; once the policy is clear; if they sense that there is business opportunity there, they come forward.”

James Lennox, the immediate past chief executive of the South African Chamber of Commerce, told IANS that the political mandates should be kept apart from the business objectives, as these often resulted in “unworkable trade agreements.”

“A good example of this is that we found out only at this forum that there is an inter-governmental transport forum, and yet business, which has logistical transport problems, is not aware of this forum.

“If we are to realise the potential of IBSA from an economic development point of view, we have to get rid of these hassles and avoidable cost, then I think it’s going to be successful.”

Lennox said Brazil was a difficult market for small medium size companies to enter for South African business, while India was seen as closer to what was being done here.

“In India we see the opportunities for trade growing, which is not necessarily dependent on a trade agreement.”

CUTS representative Pranav Kumar told IANS that it was too early to say whether IBSA would be successful.

“In my personal view, the priority in India is not IBSA but ASEAN and how to revive the SAARC. IBSA is an infant in that sense. It is not even two years old.

“But what we are trying to do is create an axis because these three countries are the really big economies of the southern hemisphere. If we are successful in creating a nucleus in the three continents then other southern countries can also benefit from south-south trade and investment.”

The private sector in Brazil has also expressed concerns about not being consulted enough in the IBSA process, according to Mario Marconini, project director of the Institute for International Trade in Brazil.

“The criticism from the private sector is that government should not be subjecting its interests for political interests. But I think IBSA can succeed. I think all three countries have their own strong reasons not to want to liberalize to each other because they compete on a number of products. IBSA can mobilise the stakeholders in each of these countries – what they feel and want out of it; how they can be involved; and what the opportunities are.”

Commented Peter Draper of SAIAA: “Our scepticism around IBSA relates more to the trade aspect, which is not working so well, than the political aspect, which is working well. But we believe (those) obstacles can be overcome.”