Mutual Accessibility Amongst Markets In India, Brazil And South Africa (IBSA)

Abstract

Using data for the period 2001-2011, trade by each country with its fellow IBSA countries was analysed. It was found that since 2004, a year after the inception of the IBSA development initiative, intra-IBSA trade has been rising. However, tariff barriers continue to be of concern. Data available for tariffs show that each country continues to have a very high number of tariff lines which complicates their tariff structures. Each country has huge disparities between bound and applied tariff rates, which results in exporter uncertainty as countries can raise applied tariff rates to bound levels so as to manage prices and supply. On some products, countries continue to apply significantly high tariffs to each other. In an effort to reduce tariffs on each other, the countries have taken initiatives to negotiate and sign preferential trade agreements with a free trade area as the eventual outcome. Non-tariff barriers also continue to constrain intra-IBSA trade. These include infrastructure constraints, inadequate business information, import licensing and customs regimes. Through IBSA Working Groups, initiatives are being taken to address non-tariff barriers. To ensure that such initiatives are legally binding, Memoranda of Understanding are being signed and ratified.