The Hindu Business Line : A new triangle of trust

There is little doubt that the first summit of the IBSA (India, Brazil and South Africa) countries, held in Brasilia earlier this week, has been a diplomatic success for the nations involved, especially New Delhi in view of the support it has received on the nuclear front from its two partners. Both these countries are members of the Nuclear Suppliers Group (Brazil currently chairing it), whose approval is necessary if the India-US nuclear deal is to pass the litmus test of the world nuclear community.

For Brazil and South Africa, the importance of the summit lies in the fact that they (along with India) have, once again, been able to impress on the international community that the South-South axis is not just alive and kicking but that it promises to play an even more critical role from a continued position of strength, particularly in such areas as the ongoing Doha Round negotiations of the World Trade Organisation. Among other things, an appeal was made specifically to eliminate trade-distorting farm subsidies, the group giving notice of its resolve that it would "spare no effort to resume the suspended negotiations". On the subject of terrorism, too, the group projected a purposeful façade, the real significance of the cohesion lying in the pointed reference to the July 11 blasts in Mumbai "and other parts of India" and calling on the world community "to undertake all necessary measures to bring to justice perpetrators, collaborators and sponsors of these and other acts of terrorism, as well as those who incite the perpetrators to commit them." On the economic front, a number of initiatives in the spheres of "energy, agriculture, transportation, trade, science and technology and information society" have been planned, the Declaration describing them as "new, concrete results" achieved during the summit. Clearly, these moves are welcome, particularly vis-à-vis the discussions which visiting business delegations from all three countries had on the sidelines of the summit.

The areas of interest which require priority attention are cross-border investments and technology-transfer mainly because progress in these sectors will be relatively smoother at the bilateral level than in liberalising trade flows among the three countries. This is because neither Brazil nor South Africa can strike up trade-arrangements with India without violating the most-favoured nation stipulations of their own regional preferential-trade groupings — MERCOSUR and SACU (South Africa Customs Union) respectively. This is clearly going to be a complex, long-drawn process, which is perhaps why the idea of a triangular trade alliance involving the two groupings and India was mooted during the summit. From New Delhi's point of view, it would, therefore, perhaps be more useful if the summit leads to greater corporate interaction among the three countries focusing on mutual investment opportunities (ethanol production, for instance) and technology-transfer deals (coal-gassification) instead of expending effort on freeing trade, the potential of which currently appears to be limited.

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