• Economic governance

Economic governance

 Trade policy reform in the form of trade liberalisation is a very important tool for raising living standards and improving a country’s economy. Such reform on its own, however, is likely to be rejected by the public and those sectors that would be most adversely affected. The key to gaining support for trade policy reform lies in the concept of transparency, which helps to explain policy change, which in turn assists the public to accept change and creates a coalition for change. Therefore, rather than pursue trade protectionism, South Africa could learn from the Australian experience by setting up a body of independent experts to determine the benefits of trade policy reform and publish their findings.

This paper provides the following findings:

• The government ensured that the public was privy to all information related to trade policy reform. Very influential in this drive was an enquiring media and an intellectual base that produced independent, evidence-based reports on the costs of trade protectionism.
  
• In Australia, transparent policymaking was key to trade and other reforms. The country was in a sense fortunate, as the intellectual case in favour of reducing protectionism had already been won for quite some time through the work of the Tariff Board and its successor organisations
  
• Australians were prepared to accept the need for reducing protection, but they wanted adjustment assistance for those who would be most adversely affected, primarily those in heavily protected manufacturing like autos, textiles and clothing
  
• Successive Australian governments were open, honest and transparent in the policy reforms they introduced. On the whole, the Australian public repaid that honesty with support. Governments gradually came to understand that transparency in policymaking was a necessity.

This paper provides the following recommendations:

• As with any reform, there will be losers and winners and, particularly in the short term, the impacts may be adverse. Adjustment assistance in the form of social safety nets for the short-term losers will ease the transition to trade liberalisation
  
• The media are a key channel of communication between government and the public. Media freedom and access to information support transparency in policymaking. The media need to be proactive and actively engage with the issues, drawing on the evidence presented
  
• South Africa should carefully study Australia’s experience, including how its Productivity Commission and predecessor organisations ensured that Australia maximised the socio-economic benefits from its trade and economic liberalisation.
  

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