NEWS

Trade at a Crossroads: Security, Protectionism, and the Future of Global Rules

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.

Back in 1995, global trade seemed to have a clear vision. Multilateralism and globalization were the guiding principles, with the GATT providing the rules of the game. Free trade was the default, and where exceptions were needed, through safeguards, anti-dumping, or countervailing duties, they were carefully defined.

That world has changed. The certainty of multilateralism is giving way to regionalism (think SADC, SACU, USMCA) and a sharp rise in protectionism. Instead of relying on global cooperation, countries are increasingly turning inward or clustering into blocs.

What’s driving the shift?

Geopolitics: The US-China trade war showed how tariffs could be used as weapons. The US sought to address its deficit, while China defended its dominance as the world’s producer.

COVID-19: The pandemic shattered faith in global supply chains, exposing vulnerabilities and pushing governments to rethink reliance on external suppliers.

Institutional gridlock: With the WTO’s dispute settlement body effectively paralyzed, there’s little enforcement left when countries bend or break the rules.

Article XXI: The National Security Wild Card

The clearest sign of this shift is the explosive use of Article XXI of the GATT—the so-called National Security Exception.

This clause allows a country to take any action it considers necessary to protect its security interests. Historically, it was treated as a last resort, a “nuclear option” for genuine wartime threats. Today, it’s being used as a first move—whether to impose tariffs on steel and aluminum or to block imports from specific regions.

The problem is its wording: “which it considers necessary.” This subjective language gives governments enormous leeway. With the WTO appeals process stalled, thanks in large part to the US blocking judge appointments, there’s almost no way to challenge such actions effectively. Some trade experts call this “appealing into the abyss.”

In practice, this has opened the door to what many describe as the weaponisation of trade policy. Protectionism is now dressed up as “national security,” making it nearly impossible to contest.

Why it matters for business and policy

For industry: Supply chains are exposed to sudden, unilateral tariffs that are difficult to predict and nearly impossible to fight. Businesses need to map supply chains not just for cost efficiency, but also for geopolitical risk.

For policymakers: The task is to build agile, evidence-based frameworks. Without them, countries risk losing control over their own industries and undermining the very trade systems they rely on.

Africa’s Critical Test: AfCFTA

This debate isn’t only for major economies. Africa’s boldest economic project, the African Continental Free Trade Area (AfCFTA), is built on trust and a shared rules-based system.

But here lies the danger: if member states begin to use “national security” as a blanket excuse for protectionism, the AfCFTA could fragment before it truly begins. Instead of one large, integrated market, Africa could regress into dozens of smaller, protected markets.

The choice is stark:
Harness AfCFTA to build a cohesive, resilient bloc.
Or weaken it by letting protectionist instincts erode its foundations.

The Takeaway

The line between genuine security and disguised protectionism will define the next decade of trade. For Africa and the world, the decision is whether to uphold predictable, rules-based cooperation, or to slide into a “law of the jungle” where might makes right.