Building capacity to help Africa trade better

Thinking about Trade Governance as Good Governance


Thinking about Trade Governance as Good Governance

Thinking about Trade Governance as Good Governance

During a recent tralac workshop, we included a practical session on remedies for private parties when they encounter customs and border administration problems and when government officials fail to issue certificates required for the importation and exportation of goods. Most participants (African government officials themselves) suggested that affected firms and individuals must study the applicable legal instruments, that there should be better dissemination of technical information, and that the courts should be approached. Some realised that many of the answers lie in the proper implementation of the Trade Facilitation Agreement.

During the subsequent discussion we suggested that advice in the form of “the government should implement agreements”, the courts “should decide these issues”, or that national focal points should be established, is not original and will not solve problems that have been around for decades.

One participant then asked the following question: “But what then is the solution?” The better question would have been why the obvious does not happen. When it comes to the regulation of trade in services and of investment facilitation, matters tend to become even more complex. Solutions call for an array of responses, including better governance, leadership, domestic reforms, and the use of modern technology.

Judicial review can offer a solution in some instances, but litigation is expensive and mostly for those with deep pockets. Final rulings can take a very long time. The ordinary Courts can hear and rule on applications involving judicial review and due process (administrative justice issues) but are not suited for deciding policy issues. Specialised and expedited appeal procedures are a better option.

There is a bigger picture. Rules-based solutions are not easy in a context where governments never litigate against each other when trade agreements are violated. This approach often trickles down to domestic compliance and enforcement. There are examples of customs administrations where the digital filing of documents has been allowed but where officials still insist on hard copies to be submitted as before.

There are success stories. They are usually encountered in the context of deeper regional integration arrangements, in respect of specific border post management projects, in certain corridors, and in donor funded projects supported through official prioritising. It also occurs when governments launch flagship projects to attract investment in high tech enterprises.

We concluded with a discussion of another well-known concept, good governance, which is often used as a yardstick for comparing ineffective economies with successful ones. An internet search about the meaning of “good governance” will provide detailed information about the benchmarks for good governance; for how governments should execute public powers. The manner in which governments actually govern must be based on transparency, inclusivity, clarity about goals and outcomes, and respect for the rule of law in order to qualify as good governance. When it comes to the implementation of trade agreements, these benchmarks are important tools for ensuring optimal results and that real benefits will accrue. Governance is about policy making and the process by which decisions are implemented (or not implemented).

One source says good governance is the process of measuring how public institutions conduct public affairs and manage public resources in a manner essentially free of abuse and corruption and with due regard for the rule of law. Good governance benchmarks aim at preventing bad governance. Governments do not want to hear that their practices do not qualify as good governance. When donors or foreign governments insist on respect for human rights and transparency, they are often accused of meddling in domestic affairs. China prides itself in the fact that it does not interfere in the domestic affairs of other states, notably in Africa.

Not all the manifestations of bad governance can be laid at the door of governments. Corruption, smuggling, and crime mostly (but not always) involve practices of individuals outside of government. The fact that crime networks, international smuggling and money laundering are often very “successful,” may be explained by the bribing of officials, the absence of policing and impunity. Scarce resources will undermine effective policing and therefore it may be a good idea to join international policing initiatives.

The powers of government agencies (in respect of customs administration, regulating service providers, issuing permits, and controlling compliance with standards and rules of origin etc.) and how officials exercise their authority will, to a major extent, determine whether the objectives for which trade and integration agreements are concluded will materialise and whether there will be new investments and growth. Such agreements are not an end in themselves. They are about outcomes and improvements and have implications for how subsequent public tasks will be performed and monitored. There should be measurable indications of economic growth, the alleviation of poverty and employment opportunities. This requires an awareness about the role and needs of firms involved in the enterprise of trade, whether as exporters, importers, investors, or service providers. Good governance reassures private sector stakeholders but also benefits consumers and the fiscus.

About the Author(s)

Gerhard Erasmus

Gerhard Erasmus is a founder of tralac and Professor Emeritus (Law Faculty), University of Stellenbosch. He holds degrees from the University of the Free State, Bloemfontein (B.Iuris, LL.B), Leiden in the Netherlands (LLD) and a Master’s from the Fletcher School of Law and Diplomacy. He has consulted for governments, the private sector and regional organisations in southern Africa. He has also been involved in the drafting of the South African and Namibian constitutions. He grew up in Namibia.

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