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The 19 countries, which form the Indian Ocean Rim Association for Regional Co-operation (IOR-ARC), could consider setting up a joint task force to identify and address various non-tariff barriers affecting regional trade in the food processing industry.
“The mandate of the task force should be to promote co-operation between the standard setting bodies, responsible of setting standards in processed food sectors,” a new study on trade and investment prospects of the IOR-ARC in the new millennium states.
This is among the various suggestions put forward in the study that says that the region has potential economic complementarities, which can be effectively realised by member countries.
The study findings were released on the eve of a meeting of the Council of Ministers of the IOR-ARC being held here on November 2.
According to the study, this observation is backed by the fact that IOR-ARC members have been able to insulate themselves from recurrent exogenous shocks. Most significantly, the members have reversed the economic slump following the recent episode of “global financial crisis” faster than most other regions.
Pointing out that mining had emerged as an important sector for trade and investment in the region, the study states that some mechanism, including setting up of a task force, might help in providing a framework to encourage regional enterprises for strengthening their trade and investments in mining.
In addition, pharmaceuticals and traditional medicines are seen as a sector for co-operation as several countries have developed highly competitive generic drug industries that are able to provide affordable medicines.
“There could be new initiatives to identify the possibility of production and trade cooperation to facilitate supply of such drugs in the region. Co-operation may be extended to traditional systems of medicine, where rich traditional knowledge from the region is shared,” the study adds.
Given the large potential of forming value chains in the parts and spares sector, the study points out that firms in the region can co-operate in “contracting and outsourcing” in several sectors including agriculture, manufacturing and services for mutual benefit.
The study indicates that the region has many opportunities, which can spur widespread trade across the region if tapped appropriately.
“However, realisation of these regional potentials cannot be automatic, and it requires a big push to move the region forward from the present state of inertia,” the study adds.
India, South Africa, Singapore, the UAE, Oman, Iran and Australia are among the 19 countries that are members of the Association which also has five others countries including China, Japan, France and the UK as dialogue partners.
>ashwini.phadnis@thehindu.co.in
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