THE DTI’S INTERACTION WITH INDIA AND BRAZIL IN THE CONTEXT OF THE BRASILIA DECLARATION
Background
The recent meeting of Foreign Ministers in Brasilia proved to be a historic intervention in the development of South South relations. The declaration brings together three continents and a convergence of interests in shaping the world. The declaration builds on the bilateral and multilateral co-operation already enjoyed by the members, as stated in the declaration;
9. The Foreign Ministers identified the trilateral cooperation among themselves as an important tool for achieving the promotion of social and economic development and they emphasized their intention to give greater impetus to cooperation among their countries...
India and Brazil are both strategic countries as identified in the dti’s Global Economic Strategy. These countries are considered to be strategic partners, as there is a clear convergence of interests. In this regard, the economic potential of strategic countries is a necessary, but not sufficient, condition for the designation. We would have to also share interests and perspectives on issues related to development, multilateral, and geopolitical strategies.
Bilateral Co-operation – responses to globalisation
South Africa’s interests, and those of other developing countries like India and Brazil, coalesce around market access and economic development. In this regard, our strategies need to respond to a wide array of challenges: from participation in the multilateral trading system, to selecting key strategic partners for investment and market access. As the capacity for government to participate in the international economy is inherently limited, choices amongst a range of possible partners and instruments must be made. This is articulated in the Brasilia declaration
13. While welcoming the expansion of economic growth, employment, and social development, and the accompanying rise in standards of living, in several developing countries as a result of freer movements of trade, capital, and technology, the Foreign Ministers of Brazil, India and South Africa expressed their concern that large parts of the world have not benefited from globalisation. They agreed that globalisation must become a positive force for change for all peoples, and must benefit the largest number of countries. In this context, they affirmed their commitment to pursuing policies, programmes and initiatives in different international forums, to make the diverse processes of globalization inclusive, integrative, humane, and equitable.
South Africa, through the Southern African Customs Union (SACU) is currently negotiating a Free Trade Agreement with Brazil (through Mercosur) and will soon start negotiations with India. These discussions are critically important for advancing the aspirations set out in the Brasilia declaration.
Multilateral Co-operation
The Brasilia declaration noted the shortcomings of the multilateral sphere;
14. The Ministers regretted that major trading partners are still moved by protectionist concerns in their countries' less competitive sectors. They stressed the need to fully carry out the Doha Development Program and emphasized how important it is that the results of the current round of trade negotiations provide especially for the reversal of protectionist policies and trade-distorting practices, by improving the rules of the multilateral trade system. They reiterated their expectation that negotiations will gain new political impetus and that it will be possible to overcome deadlocks on issues of fundamental interest to developing countries, before the Fifth Ministerial Conference in Cancun. Furthermore, Brazil, India and South Africa decided to articulate their initiatives of trade liberalisation.
Previous rounds of multilateral negotiations, especially the most recent round of talks in Cancun, demonstrate the importance of alliances and coalition building. Agendas are set and outcomes are influenced by those countries that either have the necessary economic strength or are able to participate effectively in bargaining coalitions. Increasingly, coalitions are built around specific interests of like-minded countries.
South Africa’s strategy, therefore, is to enter into appropriate alliances to strengthen the developmental dimension in multilateral trade relations. In this regard, South Africa seeks to foster common approaches within SADC, and between other developing and like-minded countries. It is increasingly important to forge issue-specific alliances in informal groupings such as the G20+.
15. The Foreign Ministers noted with concern the increased economic vulnerability of developing countries to fluctuations in global prices of commodities. They affirmed the importance of a predictable, rule-based, and transparent international trading system, to enable the developing countries to maximise their development, through gains from enhanced exports of goods and services of their competitive advantage.
16. They drew attention to the economic and social impact suffered by many developing countries in recent years, as a result of volatile global financial flows. They agreed to strengthen their cooperation towards making the international financial architecture responsive to development, and towards increasing its effectiveness in preventing and addressing national and regional financial crises.
17. They reiterate their belief that success in globalization with equity requires good governance, both at the national and in particular at the international levels, in recognition of the fact that, as a result of globalization, external factors have become critical in determining the success or failure of achieving sustainable development.
The marginalisation of many countries in the global economy, and the question of coherence in global economic policy-making, constitutes the key challenges facing the multilateral trading system. With regard to the latter, South Africa supports attempts to enhance co-operation, co-ordination, and complementarities between UNCTAD, the WTO, the IMF and the World Bank, in terms of policy development and operations. As a focal point for dealing with trade and related issues of development in an integrated manner and for ensuring that developing countries participate in the world economy on a more equitable basis, UNCTAD is seen as a key actor in the emerging system of global economic governance and should continue to play a supportive and developmental role in the multilateral arena.
The key to sustained global economic growth lies in unlocking the growth and development potential of developing countries. To achieve this, developing countries must pursue industrialisation by processing their natural resources where they possess comparative advantage. However, realising the full potential of these advantages has been frustrated by protectionist interests in the North under various national policy regimes, overlaid by multilaterally negotiated disciplines in the WTO.
Structural adjustment is required in all economies, particularly in developed countries. Such restructuring implies substantially improved market access for developing countries, and elimination of the range of protective and supportive measures that shield inefficient "grandfather industries" in the developed economies. Structural adjustment in developed economies would allow a relocation of production and investment to developing countries, thereby raising income in the developing world.
Aside from decisively addressing issues of growth and development in developing countries, this will create a sustainable basis for a new round of global economic growth from which all countries can benefit. This understanding has informed our approach to trade negotiations in the WTO. We would seek to ensure that WTO agreements facilitate - not frustrate - such processes of structural adjustment in the North. The IBSA alliance with India and Brazil illustrates a convergence of interests in this area and the willingness to create lasting coalitions.