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About the Project

The project, entitled “South-South Economic Cooperation: Exploring IBSA Initiative” aims to explore and analyse trade and economic relations between IBSA countries. Given the recent attempts to forge closer trade and economic cooperation, future trade scenarios will be explored by examining the present volume and composition of trade and factoring the perceptions of stakeholders on trade and economic cooperation. The project, started on January 1, 2005, is a one-year project funded by the Swiss Agency for Development and Cooperation (SDC), Switzerland.

The research component will also involve a survey to understand the business perceptions on trade and investment in IBSA countries, followed by a study of cross-cutting concerns in the form of non-tariff barriers (NTBs), freight costs, transaction costs etc. Subsequently, a sector study will be initiated wherein an attempt will be made to study complementarities and scope for cooperation within a particular sector.

Background

South-South economic cooperation has long been promoted as a means to increase exports, reduce the excessive dependence of developing countries on markets of developed countries and to enhance diversification of Southern exports beyond primary commodities. The Cancun fiasco and the emergence of G-20+ alliance have increased the importance of this very pertinent aspect of global trade.

Having had the experience of working on projects on trade and development issues, CUTS Centre for International Trade, Economics & Environment (CUTS-CITEE), has taken up the challenge of exploring the possibility of enhancing South-South trade, which at present constitutes only 10 percent of world trade.

This project on South-South cooperation on trade and investment will take the reasoning further by looking at demand and supply-side factors, which can enhance (or are hindering at present) trade between India, Brazil and South Africa (IBSA countries). The initiative has recognised that trade and investment advocacy can play a major role in achieving better economic and political results at the regional and international levels.

Objectives

  • Facilitate cross-fertilisation of experiences and lessons learnt on trade and economic cooperation between IBSA countries in order to develop appropriate policy responses
  • Strengthen the capacity of the IBSA countries on issues of South-South cooperation
  • Engage primary stakeholders, i.e. business representatives in exploring means to increase business and present their concerns on current trade and investment issues (which include NTBs, investment barriers, tariffs and transaction costs)
  • Facilitate synergy between governments, civil society organisations (CSOs) and other stakeholders to learn from each other and strengthen their collective perspectives and positions on future trade scenarios between IBSA countries, in the framework of South-South trade cooperation
  • Prepare a policy handbook on development-oriented trade policy by taking into account the interests and priorities of trade and economic relationship amongst IBSA countries

Project Methodology

First, a literature review will be conducted comprising of geopolitical context, trade and investment relationship between IBSA countries, current state of IBSA initiative and in the context of Southern African Customs Union (SACU)-Common Market for the Southern Cone (Mercosur), India-SACU and India-Mercosur initiatives on trade and investment cooperation and policy recommendations that exist in current literature. 

This will be followed by a fieldwork-based country paper in each of the three countries comprising of:

  • General Issues
    This chapter will attempt to get an insight into business perceptions within a country regarding conducting business with the other two. This chapter also tries to understand whether businesses are aware of such initiatives.
  • Cross-cutting Issues
    This chapter will attempt to understand the key problems faced by businesses within the IBSA countries. These could be in the form of NTBs, higher transport costs or poor access to information.
  • Sector Study
    This chapter will try to understand how the IBSA countries can cooperate to compete in international markets. What sectorial complementarities do these countries share, what are the sub-sectors that they specialise in, what are the barriers they face in each of these markets, and how they can move ahead in that sector. These are some of the important questions that will be addressed here.


A Policy Advocacy Document will be prepared by culling out issues from the three (IBSA) country papers. This will be targeted at policy-makers, business and other stakeholders.

In addition, each project partner will prepare one briefing paper (3,000 words) on the following themes; India-Mercosur Free Trade Agreement (FTA), (CUTS); India-SACU FTA, The South African Institute of International Affairs (SAIIA); and Mercosur-SACU FTA, Institute for International Trade Negotiations (ICONE).
 

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