South African agribusinesses will push for deeper agricultural trade within the Brazil, Russia, India, China and South Africa (BRICS) grouping at next month’s BRICS Business Council Conference in New Delhi, arguing that lower tariffs and fewer phytosanitary barriers are needed to unlock export growth.
The issue will be tabled at the September conference where the BRICS Business Council is expected to discuss agriculture alongside climate change, food security, agricultural innovation, research cooperation and international trade.
The expanded BRICS grouping presents a significant opportunity for South African agricultural exports because member countries account for roughly half of global agricultural imports, according to Agricultural Economist Wandile Sihlobo.
South Africa has yet to capitalise on that opportunity, Sihlobo said. India and China, despite being among the world’s largest agricultural importers, account for less than 10% of South Africa’s agricultural exports. By comparison, the Southern African Customs Union accounts for about 20%.
Higher import tariffs and phytosanitary barriers remain the main obstacles to expanding South African agricultural exports within BRICS, according to Sihlobo.
“The need to correct this misalignment in trade is even more urgent with the expanded BRICS grouping” he said, adding that the inclusion of new member countries has broadened the agricultural market and increased its potential economic benefits.
Deeper economic integration through agriculture should be the next step as political cooperation within BRICS matures, Sihlobo argued although he noted that the grouping is not a formal trade bloc.
Rather than pursuing a comprehensive BRICS free trade agreement, which would likely be a lengthy process, a preferential trade arrangement that lowers tariffs and addresses phytosanitary barriers could provide a more immediate route to expanding intra-BRICS agricultural trade, he said.
Brazil, South Africa and Russia produce surplus agricultural commodities that major importers within the grouping, including India and China, currently source from elsewhere, Sihlobo said. Lower tariffs, reduced non-tariff barriers and expanded tariff rate quotas for selected agricultural products could help redirect more of that trade within BRICS.
He also pointed to China’s decision in May to lower tariffs on goods from Africa under the China-Africa Economic Partnership Agreement, saying it demonstrated how stronger trade ties could be developed within the grouping.
Expanding agricultural trade within BRICS will remain South African agribusinesses’ primary focus at next month’s BRICS Business Council Conference in New Delhi, Sihlobo said.
