WTO vs. BEE: Why trade liberalisation may block black South Africans' access to the wealth, prosperity or just a white-collar job

South Africa’s policy of Black Economic Empowerment (BEE) is intended to alleviate the racially determined disparities in the distribution of the country’s wealth and income. It aims at increasing the participation of black South Africans in the formal private sector economy: more black company owners; more black investors; and more formal jobs, preferably at management level, reserved for blacks. To this end, BEE comprises a wide range of policy instruments aimed at domestic market regulation in favour of black South Africans. Some of these instruments are, however, inconsistent with fundamental rules of international trade set out by the World Trade Organisation (WTO), which puts BEE at odds with WTO and may jeopardise the success of the policy’s raison d’être: bringing wealth, prosperity and white-collar jobs to black South Africans. This paper analyses the problematic relationship between BEE and WTO. It approaches the issue step-by-step: first, it provides an overview of WTO, its relevant sub-agreements and the obligations these impose on South Africa. Second, it introduces BEE and systematically examines the inconsistencies between BEE and WTO rules. Finally, it reviews the possible repercussions and concludes.