Why? Yes, let’s start the year with a ‘why’. Why did the International Trade Administration Commission of South Africa (Itac) announce the initiation of its safeguard investigation in the Government Gazette on Friday, December 27, 2024? This question is particularly pertinent, considering that the World Trade Organisation (WTO) closed at the end of the working day on December 20, 2024, and was scheduled to reopen on January 6.

Why is this relevant? Well, “WTO members must notify the WTO’s committee on safeguards when they initiate a safeguard investigation. The notification must be made immediately”. So, did Itac notify the WTO of the launch of its safeguard investigation? If so, when exactly did it do so? Notably, there was no such notification on Itac’s website during its closure between December 2024 and January 2025. If Itac needs reminding, “The easiest way to notify the WTO is to email crn@wto.org in Word format. There is no need to send an official letter.”

The last safeguard investigation launch notification on the WTO’s ‘News’ page in 2024 was on December 19, when the WTO announced that the European Union had launched a safeguard investigation on manganese and silicon-based alloying elements.

At the time of writing, on January 6, the WTO’s ‘News’ page had been updated to include news about the notifications by several countries, including China, which launched a safeguard investigation on meat of bovine animals on December 27, 2024; Madagascar, which launched a safeguard investigation on tomato products on December 31, 2024; and India, which launched a safeguard investigation on non-alloy and alloy steel flat products on January 6.

Before we get to the WTO’s notification of South Africa’s launch of a safeguard investigation, did you spot something of interest regarding the launch of these safeguard investigations? Have a quick reread. The ‘ICS’ countries within BRICS launched safeguard investigations in a space of 18 days, including South Africa’s delayed ‘notification’. Considering current circumstances, one would not expect Russia to launch a safeguard investigation anytime soon, although Brazil might well follow suit.

Returning to South Africa’s safeguard investigation, do you have any guesses – informed or otherwise? Let’s keep it official: ‘Notice of an initiation of the investigation for remedial action in the form of a safeguard measure against the increased imports of flat-rolled products of iron or non-alloy steel’. Comment on this is due by February 25. (A quick note: the Chinese New Year holiday in 2025 is eight days long, from Tuesday, January 28, to Tuesday, February 4. 2025 is the Year of the Wood Snake, but given the flurry of safeguard investigations launched, it might more aptly be called the Year of the Safeguard.)

The safeguard application was filed by ArcelorMittal South Africa (AMSA), the major producer of the product in the Southern African Customs Union (Sacu), with the support of SAFAL.

Citing what it termed “unforeseen developments”, AMSA essentially argues that, during the GATT Uruguay Round negotiations, from 1986 to 1994, South Africa did not anticipate the decision to split the product into two main Harmonised System categories, resulting in a tug-and-pull effect, where an increase in duties payable on one tariff subheading leads to a direct increase in the import volumes for the other due to the interchangeability of the products. Additionally, the considerable oversupply of the subject product globally is causing a surge in imports into the Sacu region.

There are four main issues. First, China did not become a fully fledged market economy, despite assuring WTO members it would. Second, Chinese economic activity has consistently declined since 1994 (not great joining the WTO, then?) and large steel producers follow aggressive export strategies. Third, China’s extraordinary economic growth is slowing down dramatically, and its domestic steel market is retracting, resulting in Chinese producers increasing exports at reduced prices. Finally, countries worldwide are urgently raising tariffs and imposing trade remedies to protect their domestic steel industries. The surge in imports into the Sacu region is expected to worsen, driven by China’s recent economic slowdown and its rapidly contracting export markets.