Economic Times | 20 June 2006
PM to explore chances of FTAs with Brazil, SA
NEW DELHI: When Prime Minister Manmohan Singh attends the IBSA (India-Brazil-South Africa) summit in Brazil on September 13, one of the main issues on the agenda is the possibility of a trilateral Free Trade Agreement (FTA) between India and the regional groupings in Latin America and South Africa.
The issue of an FTA between India and the regional groupings has gained momentum and at the upcoming IBSA summit in September, India, Brazil and South Africa might set up a working group that will explore the modalities of a trilateral FTA.
India in past meetings, including the third meeting of the trilateral commission of the IBSA Dialogue Forum that was held in March this year, has been positive to the idea of an FTA between India, South African Customs Union (SACU), India and Mercosur (a regional grouping that includes Brazil Argentina, Paraguay, Uruguay and Venezuela.
Mercosur has already proposed to SACU and India the creation of such a working group that will study in depth the advantages of the trilateral FTA.
India has already voiced its support for the working group and all three countries have so far been positive about going in for an FTA.
FTAs were a matter of debate in India recently with Congress president Sonia Gandhi writing a letter to the prime minister urging caution on signing FTAs with other countries.
However, the three countries will also be looking at strengthening economic and trade relations and apart from FTA are looking at trade facilitation measures, customs cooperation, all issues that are likely to come up during the summit.
India‘s trade with Latin America has been rising rapidly in the last year or two.
The two way trade in ’05 nearly doubled to $2.34bn from $1.207bn in ’04, a 90% jump from ’02. The aim is to increase trade flows between the three countries to $10bn by ’07.
At the September summit, the three countries will also look at cooperation in energy. South Africa is big in coal gasification, Brazil is big in ethanol and India brings expertise in solar energy and bio diesel.
Civilian nuclear cooperation is also an area that is likely to be explored anew when the summit takes place especially in the background of the Indo-US civilian nuclear cooperation. The three countries had decided in March this year to consider further enchancing international civil nuclear cooperation with countries who share the objectives of non-proliferation.
Brazil and South Africa are both Nuclear Suppliers Group countries, who have supported relaxation in rules for India and their support in the NSG will be important.