NEWS

‘Self-Judging’ Under Article XXI of GATT: A Strategic Opportunity for South Africa’s Steel Industry

Safeguard protection is granted whenever an industry is suffering from serious financial injury, caused by an increase in imports, which was because of unforeseen developments stemming out of the 1994 GATT negotiations, to which South Africa was a signatory.

Safeguard measures are enacted to ensure enough breathing room for the domestic manufacturing industry in distress to adjust and become more competitive, usually within a period of 3-6 years.

For this remedial protection to be effective, these safeguard duties need to be monitored and enforced across the board. However, as part of the Safeguard Agreement, the Safeguard Regulations creates an “Exempted Countries” list. This exemption has shown to provide a safeguard duty-free roue for imports from countries which are developing in nature and from where imports did not originate prior to the imposition of the safeguard duties.

The” circumvention” becomes a problem when the bigger importers switch their sources from imports from the traditional exporting countries like China and Russia, to smaller, developing nations, like Taiwan and Indonesia, effectively bypassing the Safeguard duties in their entirety.
Other WTO member countries would normally act quickly against these changes by removing these “developing nations” quickly once its import volume exceeds the established threshold. No further investigation is required.

In South Africa, the remedial action linked to the imposition of safeguard measures are failing because the officer in charge of this administrative action, the Minister of Trade, Industry and Competition, Minister Dave Patel, fails in his duty to authorise these exempted country removals immediately, or at all in some cases. Imports that reduced because of the imposition of the safeguard duties, with a resultant uptick in local production, regained lost ground within a year of the duties being imposed, rendering the safeguard protection completely impotent.

Below is an import chart, providing insight on how imports of Hexagon Nuts, a product protected by safeguard duties have climbed to almost pre-safeguard levels, because of a lack of action by the government to curb imports from developing nations.

The International Trade Administration Commission of South Africa (ITAC) has made a preliminary determination that today’s geopolitical landscape constitutes an unprecedented emergency, warranting urgent measures under Article XXI of the GATT 1994—the national security exception. This is not merely a legal step; it is a strategic opening for South Africa to recalibrate its trade policy in support of one of its most critical industries, steel.

Understanding the ‘Self-Judging’ Clause

Historically, the national security exception under Article XXI was regarded as “self-judging”—a tool governments could invoke without real scrutiny. But the WTO’s Russia—Traffic in Transit ruling changed that dynamic. The decision confirmed that while members retain sovereignty in defining their “essential security interests,” this discretion is not without boundaries.

Measures must:
• Meet objective requirements of Article XXI, and
• Be exercised in good faith in line with international law.

This interpretation gives South Africa room to act—but it also requires that such action be justified, transparent, and firmly connected to national security concerns.

Why Steel Qualifies as a National Security Priority

Steel is more than a commodity. It is the backbone of South Africa’s infrastructure development, mining, automotive sector, defence capability, and renewable energy transition. A weakened domestic steel industry translates directly into economic vulnerability and loss of industrial sovereignty.

Global supply chains are increasingly unpredictable. Trade flows are now shaped as much by geopolitical rivalry and protectionist policies as by market efficiencies. In this context, ensuring a resilient domestic steel base is not simply an economic objective—it is a national security imperative.

By invoking Article XXI, South Africa gains the legal and policy foundation to:
• Revisit tariff structures to provide urgent relief to the local steel industry against destabilizing imports.
• Anchor steel in national security policy, recognizing its role in energy, defence, and industrial resilience.
• Align trade measures with industrial policy, encouraging reinvestment in steelmaking capacity and value-added downstream industries.

This is not about protectionism for its own sake. It is about creating a level playing field that allows South African steel producers to operate sustainably while maintaining the country’s sovereignty over essential industrial capacity.

ITAC’s determination is more than a procedural step; it presents a timely opportunity for South Africa to strengthen the foundation of its industrial sector, ensuring resilience and competitiveness amid increasing global competition and geopolitical uncertainty.

- Lufuno Munzhelele