IBSA ‘framework’ agreement

This is a diversion: bq. Foreign ministers of the three countries, home to 1.2bn people, yesterday signed a “framework agreement” to boost trade, aimed at countering industrialised nations’ domination of the world trading system. (“FT”:http://www.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1078381573792&p=1012571727102) According to the Financial Times, the ‘framework’ contains no actual trade obligations such as cuts in barriers to each others’ exports. That would be the quickest way to give this alliance more credibility in the trading system and, along the way, lift economic growth performance—particularly in India whose trade performance has (with the exception of IT services and pharmaceuticals) badly lagged[⇒ related story] that of the other Asian ‘giant’, China. T N Srinivasan has recently “published”:http://www.econ.yale.edu/~srinivas/C&I%20Economic%20Performance%20Update.pdf (PDF file about 100k) an updated overview of the relative trade and growth performance of India and China and the implications for income distribution and the role of each country in the trading system. TNS argues that ideas such as IBSA confuse the benefits of economic integration with those of the much more difficult political integration that has allowed e.g. the EU to play a significant role in world affairs.

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