BRIC – where’s the benefit for SA?

Although there is considerable enthusiasm at government level about SA being a possible and passable potential new member of the Bric (Brazil, Russia, India, China) trade coalition, Duncan Bonnett, trade expert with Liz Whitehouse & Associates consultants, is somewhat doubtful that we’d actually gain very much from our participation. Indeed, Bonnett suggested that, although trade pacts were always welcomed by the trade theorists, the other partners in the free trade agreements (FTAs) were the ones who actually gained. And, he told FTW: “I have very mixed feelings about SA and Bric.” Certainly, he agreed, at a strategic level we need to be involved more with emerging (rather than developed) markets – of which Bric are main players. “But,” Bonnett said, “it’s how we go about it (participating with other emerging markets in trade deals) that worries me. “Looking at Bric – particularly compared to India and China – we are just not a comparatively big manufacturing entity. In a twoway deal, linking up with them actually increases their competitive advantages against us. We don’t really have a great deal to offer those nations in exports.” Apart from that, he felt that SA didn’t need trade deals with India and China to encourage them to invest in our mining sector and import our mineral commodity resources. “They’re going to do that anyway - trade deal or no trade deal,” he said. He described the SA government optimism about such trade deals as “looking at a silver bullet”. That, by signing an FTA we are going to get massive investment. That’s not a relevant argument, according to Bonnett. “Never mind trade deals acting as stimulants,” he said. “People look at what a country has to offer, what its potential is, anyway.”