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tralac Newsletter • Issue 13 • August 2019
Institutions as the Anchor of Good Governance
It matters how we think about institutions and how we design them. We recognise that institutions are essential for good governance and to achieve development outcomes. Our discussion in this Newsletter focuses on organisations as institutions. Given the inter-disciplinary nature of our work, we look at institutions from both an economic perspective, and also from a legal perspective. With regard to the former, we recognise the delineation of Douglass North (who shared the 1993 Nobel Prize in economics with Robert Fogel for the work on economic and institutional change) between institutions as the rules of the game and institutions as organisations which implement the rules of the game. From a legal perspective, we recognise that the history of statehood is also about the role of institutions (both rules of the game in the form of legal instruments – and organisations) to protect the rule of law and democracy. Our focus here is on institutions as organisations. We discuss select developments related to the role played by institutions in national, regional and global trade contexts, and their relevance for Africa.

We acknowledge that current challenges of legitimacy and sustainability, and global crises such as climate change and trade wars, can only be tackled through joint efforts and appropriately designed institutions.

Institutions are necessary to secure good governance outcomes across the full spectrum of public policies. The literature on economic governance shows how governments’ ability to tackle the problems of poverty and inequality are linked to the institutional context in which such policies are developed and executed. Where transparency, public participation and inclusivity are absent, corruption and inefficiencies can prevail.

tralac’s publications have often argued that institutions are central to sound trade governance and to regional integration in Africa; and what the consequences are when they are absent or are abolished. We have, for example, discussed the fate of the Southern African Development Community (SADC) Tribunal when, in 2011, the political leadership (under the instigation of President Mugabe of Zimbabwe) decided to abolish it. That saga continues. There have been two important recent judgments by senior national courts in SADC Member States about this matter. They ruled that the SADC Tribunal was irregularly abolished. We report on these developments and what to expect in this blog.

The launch of the African Continental Free Trade Area (AfCFTA) is another reason for revisiting the good governance/sound institutions debate. The institutions established as part of the AfCFTA may hold the key to the success of this bold initiative. The importance of technical capacity development for institutions to play their roles as anchors of good governance is an important one. While there is significant investment (often support by international donors) in technical capacity development, the link to institutional capacity development is often weak. We focus on the AfCFTA institutions here.

The debate about the importance of sound institutions is an old one. The history of statehood and good governance is about how societies over time designed and refined institutions to anchor and protect democracy and the rule of law. These “institutions” include constitutional arrangements such as a Bill of Rights, the independence of the judiciary, judicial review, separation of powers, checks and balances, transparency and access to information.

Politicians and government officials exercise the power of the state. The rule of law is necessary to ensure transparency and accountability. The failure to respect good governance has a tendency to come back and bite those who ignored or dodged the rules. In South Africa, the government must now deal with a national economy teetering on the brink of implosion after years of corrupt rule. Its leaders are under attack because they failed to respect transparency around political donations. And a vital oversight institution, the Public Protector, is under threat. We mention the reasons why this respected institution is now the target of several court applications to set aside her reports and findings.

A system of rules-based trade is essential for regulating the actions of “sovereign” states. The establishment of the World Trade Organization (WTO) in January 1995 coincided with major shifts in global relations; when communist rule in Europe came to an end. The WTO Agreements and the Dispute Settlement Understanding (part of the WTO’s “single undertaking”) were hailed as the harbingers of certainty and predictability in international trade; the end of power politics and coercion. That system is now facing systemic challenges. Protectionism is growing with a new justification – the need to protect national security interests. These claims are justiciable but by the end of this year the Appellate Body (AB) will not be able to function because the United States (US) refuses to agree to the appointment of new AB Members. This Newsletter refers to these developments here.

Good governance, bolstered by solid institutions, is an ideal, not a given. That makes it powerful but also open to attack. Institutions must be defended, and reforms may well be necessary to tackle new challenges. Today, millions feel powerless and unrepresented in political and economic systems that respond inadequately to their needs. Mistrust of once deeply respected institutions is widespread. Many speak of a “democratic deficit” in national and in regional organizations. They demand reforms. We recall how the Bretton Woods System came into existence 75 years ago and how it contributed to the restructuring of world order in the aftermath of the Second World War. That system is now in need of far-reaching reform, as our blog on the Bretton Woods System shows.

We are aware that the very notion of democratic rule is being contested. Gideon Rachman has written that the 21st century could be the century of the “civilisation state”, which is “a country that claims to represent not just a historic territory or a particular language or ethnic-group, but a distinctive civilisation. It is an idea that is gaining ground in states as diverse as China, India, Russia, Turkey and, even, the US. The notion of the civilisation state has distinctly illiberal implications. It implies that attempts to define universal human rights or common democratic standards are wrong-headed, since each civilisation needs political institutions that reflect its own unique culture. The idea of a civilisation state is also exclusive. Minority groups and migrants may never fit in because they are not part of the core civilisation.[1]

The proponents of such views will not shy away from invoking those aspects of the Westphalian model which suit them, such as state sovereignty and the exclusive nature of national jurisdiction. They argue, for example, that essential domestic interests (as defined by the government of the day, now often articulating populist sentiments) should not be interfered with from outside; in particular when human rights abuses are at stake. This is part of a wider argument within the context of a contest for global leadership.

This debate will not be over soon. Some of the traditional defenders of rules-based institutions (such as the United States and the United Kingdom) find themselves in the midst of their own crises of national identity. They now shun the WTO and the European Union (EU), which they previously supported. It has been observed that under President Trump, “white nationalism has moved from a fringe movement to something much more mainstream in American politics.”[2] Surveys have shown that in the Brexit context, people voted to leave the EU because they feared immigration.[3] Others want “to take back control”.[4]

One should be careful about weighing the pro and contra evidence. Brexit does not bring the European project to an end and President Trump may not be re-elected.

The developments discussed in this Newsletter will hopefully contribute to a debate in which a unique African voice will also be heard – in support of the institutions underpinning good governance. The challenges which the continent and individual African states face can only be tackled through joint efforts and properly designed institutions.

We look forward to your feedback.

The tralac team

[1] China, India and the Rise of the Civilization State,

[2] Francis Fukuyama (2018), Identity: Contemporary Identity Politics and the Struggle for Recognition, Profile Books, p. 120.


[4] “Let’s take back control”: Brexit and the Debate on Sovereignty,

tralacBlog is a forum to share and engage with the views of tralac researchers and Associates, as well as guest contributors, on pressing regional integration and trade policy issues affecting African countries in order to encourage relevant, topic-related discussion and debate.

The Institutions of the African Continental Free Trade Area


Implementing Trade Agreements: The Role of National Institutions and Administrative Law

South Africa withdraws its Signature from the Decision to abolish the SADC Tribunal


What is happening to the WTO?

The Institutional Arrangements of the Tripartite Free Trade Area

The Institutional Implications of Article 19 of the AfCFTA – where do the RECs fit in?

The SACU Institutions that never were


The Bretton Woods System at 75

Events and Training
Reporting on the African Continental Free Trade Area Agreement: a training course for journalists
3-4 October 2019
Newlands Sun Hotel, Cape Town, South Africa

The Trade Law Centre (tralac) builds capacity for Africa to trade better. To this end, tralac offers training programmes, conducts analyses of trade and integration developments, and supports an active debate on trade and regional integration law and policy. We are convinced that access to information on trade and integration developments is essential to enhance the quality of trade policy and governance. The role of the media, and specifically of journalists is critical to make progress in these areas. Our aim is to contribute to building a network of trade journalists across the continent.

This workshop will focus on reporting on the African Continental Free Trade Area Agreement. We’ll discuss the state of the negotiations, providing an update on the ratification and entry into force of the Agreement, the ongoing negotiations on tariff concessions and rules of origin, as well as services sector commitments. We will also consider the second phase of the negotiations – on investment, competition and intellectual property rights. We’ll interrogate the potential of the AfCFTA to contribute to Africa’s development.  An introduction to trade data analysis to assess intra-Africa trade – with trade data visualisation techniques will also be included in the programme.
If you are interested in attending, please contact us: Applications close 16 September 2019.

AU AfCFTA Trade in Services Signalling Conference

tralac participated in the African Union’s African Continental Free Trade Area (AfCFTA) Trade in Services Signalling Conference in Cape Town on 2-3 September 2019.

The Conference, supported by the German government through the GIZ, brought together representatives from several AU member States, some regional economic communities (RECs) and private sector to discuss priorities for services sector commitments under the AfCFTA Agreement. The Conference culminated with participants presenting these priorities to selected African Ministers of Trade.


New Publications

View more tralac Publications...

Annual AGOA Eligibility Reviews
Under a notice filed on 28 June 2019 by the USTR, the annual AGOA eligibility reviews are currently underway. Additional written and oral submissions have been presented in recent days. Based on the available submissions, focus countries have been mainly the DRC (currently excluded under AGOA), South Africa (automotive sector, canned pears, intellectual property protection), and to a lesser extent Mauritania (currently excluded) as well as Tanzania. The available submissions can be downloaded from the AGOA Eligibility Reviews section here.
AGOA Business Connector
The AGOA Business Connector is a new online facility on to help enable trade and business connections between producers, exporters, importers, sourcing agents, trade-related service suppliers including trade finance, logistics and related services, support organisations (such as business chambers and exporter associations and others), both from within sub-Saharan African AGOA beneficiary countries and the United States. Registered users are also able to list their businesses or professional trade-related service on the platform, and to communicate with other listings through a messaging facility. 
> Download the AGOA Business Connector Brochure at this link
New: Searchable United States tariff database | AGOA products list

The AGOA products database on has been enhanced through the inclusion of a simplified (yet full) US tariff database, providing six relevant searchable fields: tariff code (HTS), product description, AGOA status (eligibility), GSP status, standard tariff (MFN basis) as well as the non-MFN tariff (when goods enter the US from a non-WTO Member State without claim of any special preferences). Follow the link here.
Download: AGOA guides and info-graphics
tralac has produced a number of info-graphic type brochures (see section on / Exporter Toolkit) covering a range of AGOA-related topics, including on AGOA’s legal provisions with regard to eligibility and annual/out of cycle reviews, rules of origin, AGOA FAQs, sector-focused brochures (textiles and clothing, agriculture), as well as national AGOA brochures relating to Botswana, Ethiopia, Ghana, Kenya, Lesotho, Madagascar, Mauritius, Namibia, Nigeria, South Africa and Tanzania.
Key trade stats for AGOA beneficiaries to end June 2019
Aggregate exports to US: 2019 YTD to June: $ 10.2 billion (-22% yoy)

(Share) of AGOA exports: 2019 YTD to June: $ 4.4 billion (represents 43% of total exports)

The decline in aggregate exports to the United States by AGOA beneficiary countries can to a large extent be attributed to the performance of Nigeria (and to a lesser extent Angola), whose oil exports to the US have declined sharply. South Africa also recorded significantly lower AGOA exports (-30%) as a result of much lower automotive exports compared to the previous period. In contrast, US exports from Congo-Brazzaville (+149%), Ghana (+57%), Kenya (+26%), Madagascar (+29%), Ethiopia (+62%) and others have shown significant year-on-year increases.
AGOA Forum 2019: Reflections and new developments

The 2019 AGOA Forum took place early August in Abidjan, Côte d’Ivoire, under the banner of “AGOA and the Future: Developing a new trade paradigm to guide US-Africa trade and investment”. In the context of recent United States trade policy developments, especially insofar as it relates to Africa, this was of course an entirely relevant theme. The United States is looking to deepen its trade and commercial relationship with sub-Saharan Africa, and is seeking to do this on a more even playing field, ideally through some form of reciprocal arrangements, the shape and size of which remain largely undefined.


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