The New Nation - Internet Edition

PTI, Johannesburg

Observing that India, Brazil and South Africa (IBSA) have reservations in fully opening up their markets, South African trade minister has said more needed to be done to reduce tariff barriers hampering South-South trade.

The barriers affecting trade between countries in the southern hemisphere are much greater than those in the northern hemisphere, he said while urging the countries to enhance trilateral trade volumes to USD 10 bn by year end.

"Research done by Organisation for Economic Cooperation and Development (OECD) showed that tariffs affecting South-South trade are about 11 per cent, while there is only a 4 per cent tariff affecting North-South trade," he said Tuesday while speaking at the India-Brazil-South Africa pre heads of state summit here.

"Our industrial development is underway and each deals with issues like poverty, unemployment and infrastructure development, making it very difficult to open up markets completely," he said.

Brazil, India and South Africa are all growing economies and more needs to be done to broaden the scope on tariff issues, the minister said, adding negotiations regarding these issues are underway.

President Thabo Mbeki, Brazilian President Luiz Inacio Lula da Silva and Indian Prime Minister Manmohan Singh will hold their political summit in Cape Town Wednesday.

They are set to sign six agreements aimed at boosting the South-South relationships and creating new programmes for developing trade between the countries.

Mpahlwa said South-South trade had been on the increase with trade between South Africa and Brazil having tripled in the last decade.

"Effective South-South trade serves twin purposes of assuring both positive trade and economic growth. Further targets have been set to increase the figure to USD 10 billion by the end of 2007 at the second annual IBSA summit," he said.

"Increased trade perpetuates Foreign Direct Investment, infrastructure development and increased competition in the developing countries. Recent analysis showed that developing countries accounted for about 30 per cent of world trade and that about 40 per cent of that trade was South-South orientated," Mpahlwa said.