Barriers affecting trade between countries in the southern hemisphere were much greater than those in the northern hemisphere, Minister of Trade and Industry Mandisi Mpahlwa said in Johannesburg on Tuesday.
In addition, reducing trade tariffs in countries where industrial development was still under way and where there was widespread poverty ran the risk of exacerbating unemployment, he told the second India-Brazil-South Africa (Ibsa) summit.
The meeting aimed to increase trade and economic cooperation between the three countries.
”Reducing South-South barriers can have a major impact on trade flows,” he said.
He said this was not meant to replace, but rather complement trade with countries in the northern hemisphere.
The value of trade between the three countries currently stood at $7-billion, falling short of the $10-billion target set for this year.
He said more than 40% of developing country exports were destined for other developing nations. South-South agreements also allowed greater opportunities for attracting foreign direct investment.
Brazil’s National Confederation of Industry vice president Rodrigo Loures said during the last 10 years the volume of trade between Brazil and South Africa has almost tripled. It increased six-fold between Brazil and India over the same period.
Brazilian Ministry of Development representative Ivan Ramalho said that in the past four years there had been growth of more than 100% in inter-Ibsa trade.
Trade between India and South Africa in 2006 amounted to more than $4-billion.
Business Unity South Africa chairperson Patrice Motsepe was among the speakers who voiced concerns about the lack of flights between India and South Africa. He added that it also took too long for Indians to get visas to South Africa.
President of the Federation of Indian Chambers of Commerce and Industry Habil Khorakiwala said: ”Direct flights are not easy and convenient. Once we do that, contracts will flourish”.
He expected trade between the three countries to grow between 30% and 40% over the next few years.
Sectors in which the three could cooperate included agriculture and food processing, pharmaceuticals and biotechnology, transport and infrastructure, as well as energy.
Leader of the Indian business delegation Ganesh Gupta said the main problem to overcome was the physical, cultural and economic distance between the three countries.
This could be alleviated by frequent exchanges of business delegations, easier visa requirements and travel routes, he said. — Sapa