Brics membership presents limited tangible benefits

What trade benefits does SA stand to gain from its new membership of the Brics (Brazil, Russia, India, China, SA) grouping? Nothing at the moment and not for some considerable time, according to Duncan Bonnett, international trade specialist with trade consultancy, Whitehouse & Associates. Talk of SA enjoying tariff concessions, for example, is totally erroneous, he said. “Bric as it was first formed was not a formal trade agreement.” Rather, Bonnett added, “the Bric countries have been seeking to form a ‘political club’ or ‘alliance’”, and thereby converting their growing economic power into greater geopolitical clout. “Quite frankly I don’t think anything will happen for quite some time. I don’t know what the other countries have got in the way of bilateral trade agreements, but we have been negotiating trade agreements with India and China for years and we haven’t got anywhere as yet, and I don’t think we will for a while.” He also noted that, as the smallest of the Bric countries, we have to be extremely careful how we enter into trade agreements. “There is a desire to come up with a Bricsfunded infrastructure development fund for Africa,” said Bonnett. “That would lead to a couple of trade links being funded through that. But it’s still in its infancy.” Keith Brebnor, CEO of the Johannesburg Chamber of Commerce and Industry (JCCI), told FTW that our trade benefits in Brics was exactly the question the JCCI has just been asking. This, he added, on the public platform of the recent Brics Africa Export Import Forum which ran alongside the annual Southern African International Trade Exhibition (Saitex). “In association with Brics trade consulates and the Department of Trade and Industry, we convened a series of trade opportunity presentations and seminars aimed at opening dialogue between trade representatives from Bric countries and African business visitors,” Brebnor said. “The question we were posing was: What’s the good of having a political grouping if you’re not going to have a trade agreement so you can trade between the members beneficially? “I’m not saying that we can’t offer a gateway into Africa. We have an involvement with the Southern African Customs Union (Sacu), the Southern African Development Community (SADC), and links with the Common Market of East and Southern Africa (Comesa). “But we haven’t got rules for the club to give us beneficial trade. The political club needs to be turned into a strong intertrading base.” And that, Brebnor added, wouldn’t be done overnight. CAPTION Duncan Bonnett ... a political club.