IBSA: An Emerging Trinity in the New Geography of International Trade

This paper explores the opportunities for further economic cooperation between India, Brazil and South Africa in the context of the IBSA Trilateral Cooperation Forum. The IBSA integrative efforts are opening new avenues for South-South Cooperation in several areas, including on commodities, manufacturing and services exports, transport and energy issues, FDI and transfer of technology, etc. In particular, the paper looks at two tariff liberalization scenarios going beyond the minimalist preferential trade arrangements that have been agreed by IBSA countries. The CGE simulations suggest that significant trade creation gains can be reaped by all three countries. While intra-IBSA trade has tripled over the last decade, a comprehensive tariff liberalization scenario could lead to a doubling of their annual trade levels. The paper concludes with a number of policy recommendations that could help overcoming the remaining challenges for the IBSA trilateral economic cooperation.