Financial Express, India
Mercosur moots trilateral FTA with India and SACU
15 August 2006
NEW DELHI, AUG 14: During the triangular IBSA (India, Brazil and South Africa) political summit on September 13 in Brazil, Mercosur is likely to propose South African Customs Union (SACU) and India the creation of a working group to explore the modalities of a trilateral free trade agreement (T-FTA) among them.
The ministry of external affairs (MEA) officials suggested IBSA should hold a business council meeting as well in the run-up to the summit.
“Successful development of synergy within the trilateral framework could be an exemplary model for other activities in South-South Cooperation,” they added.
The aim is to enhance the aggregate trilateral trade flows among Mercosur-SACU, Mercosur-India and SACU-India to $10 billion in the short term.
The level of trade is $4 billion at present. This is part of an attempt to develop trade convergence among the three countries.
The possible substitution of imports from northern countries by imports from southern countries could be considered a possible solution. Ahead of the the summit, the MEA has brought forth certain proposals aimed at strengthening business-to-business ties among the three countries.
Prime Minister Manmohan Singh, leading a high-level ministerial and business delegation, will address officials from Brazil and South Africa. CEOs conclave on selected sectors organised by Ficci, Assocham and CII will be showcasing identified sectors of mutual interest.
The summit will explore potential areas of co-operation among the three countries in focus sectors, including information and technology, telecommunications, infrastructure, energy and agriculture.
According to officials, IBSA countries can reinforce the economic strength of each other by synergising their complementary ties in areas of industry, services, business and technologies.
They can create a market of 1.2 billion people, $1.2 trillion of gross domestic product (GDP) and foreign trade of $300 billion. New sectors for cooperation, such as finance and law, and setting standards for foreign direct investment among IBSA countries will be explored at the summit. It is expected that the countries will also discuss the development of trans-shipment facilities.