By Sibulele Walaza
A fter months of political wrangles, the race for Director-General (DG) of the World Trade Organization (WTO) came to an end on 15 February, with the appointment of Dr. Ngozi Okonjo-Iweala, a respected global economist. The global body was to elect a new DG in 2020 after then DG, Ambassador Roberto Azevêdo, announced he would be stepping down a year earlier before the end of his second term. The appointment was delayed due to the United States’ (US) opposing view over Dr. Okonjo-Iweala.
The process kicked off in June 2020, with member states nominating candidates, and was to end in November 2020. The eight prospective candidates at the end of the nomination process acknowledged the central role of trade in the global economy, the need to rebuild trust in the organization and a WTO of the future that is fit for purpose during and post the COVID-19 pandemic. Their aspirations ranged from reform, more inclusiveness, and restoring the dispute settlement mechanism.
Ultimately, the race came down to two candidates that were likely to gather consensus among member states, Dr. Okonjo-Iweala and South Korea’s Trade Minister, Yoo Myung-Hee. The two candidates were the first women to hold key economic portfolio roles in their respective countries. On one hand, Yoo, served for over 20 years as a public servant, advancing Seoul’s position in multilateral and regional trade negotiations.
Dr. Okonjo-Iweala, on the other hand, is a strong proponent of the transformative power of trade, who served as Nigeria’s Finance Minister over two terms. She was involved in regional trade negotiations and worked on transforming Nigeria’s trade policy, making it more competitive.
In his congratulatory message, Nigeria’s President Muhammadu Buhari refers fondly to her track record of integrity and her propelling of major economic reforms during her respective tenures. The October 2020 decision to advance the two to the final stage of selection created yet another historic precedent for them - a clear pathway to become the WTO’s first woman DG.
Aside from her wealth of experience and nuanced understanding of developing country contexts, Dr. Okonjo-Iweala brings to the WTO her experience from another multilateral organization, the World Bank, spanning over two decades. During her time as part of the leadership at the Bank, she steered economic development initiatives and policy reforms that included trade policy in developing countries. Her ascend to the helm of the WTO was not without its challenges.
Despite broad consultations that deemed her the most likely candidate to gather consensus, her contender, Yoo had the support of the largest economy in the world. In support of her selection, the Office of the United States Trade Representative (USTR) said Yoo had a distinguished career as a trade negotiator and policymaker. Washington’s considerable influence effectively stalled Dr. Okonjo-Iweala's appointment. The support Yoo had from the US raised the possibility of the WTO departing from the preferred decision-making by consensus to voting mechanism in appointing the DG.
According to the WTO’s procedures, voting would happen in exceptional circumstances. Without precedent, there is also no clarity on how the vote is triggered. An electoral outcome, changing US representation and posture in Washington, saw Yoo withdraw her candidacy.Taking note of her withdrawal, the same USTR office expressed the Joe Biden-Kamala Harris Administration’s support for the candidacy of Dr. Okonjo-Iweala, thus paving way for the first African to lead the multilateral organization. The WTO is a central institution in the regulation of trade between member states, providing a framework for negotiations and dispute resolution, to advance a fair and equitable international trade environment. For some months after Azevêdo stepped down, the organization functioned without a leader steering the ship.
Dr. Okonjo-Iweala takes the reins during a time of uncertainty, as the ongoing pandemic continues to disrupt economic activity and global supply chains. There are also continued tensions between the US and the world’s largest emerging economy, China that may constrain the functioning of the WTO.
In a recent interview with the South African Broadcasting Corporation (SABC), Dr. Okonjo-Iweala spoke about her aspirations for the WTO. She emphasized the importance of advancing confidence-building measures to tackle challenges within the organization.
For her, this includes working to reform the trust deficit between member states, employing a constructive approach to respond to challenges between the US and China, as well as the prolonged rifts between developing and developed countries. She intends to advance the rebuilding of the dispute settlement mechanism that has ground to a halt since 2019, due to the impasse over the appointment of appellate members.
In addition, she recognized that Micro, Small, and Medium Enterprises (MSMEs), many of which are driven by women, are the backbone of job creation across developing countries. She looks forward to advancing trade rules that address barriers that limit MSMEs from participating better in regional and global value chains. She also envisions the WTO providing support to the recently launched African Continental Free Trade Area (AfCFTA) to perform.
For the continent, an effective AfCFTA would result in improved infrastructure to manufacture more of what the continent consumes and to accelerate intra-regional trade that ultimately leads to greater gains in global trade. Her priorities also include getting the WTO to play a greater role in lifting restrictions on the manufacturing of medical goods and supplies to get vaccines distributed more equitably. She will promote greater flexibility on intellectual property rights, which may result in the waiver of patent rights, to encourage members to locally manufacture drugs, particularly during pandemics.
In many ways, the stalled process that saw her eventual appointment is reflective of multilateral negotiations in the organization that have been constrained by consensus. With her skills and expertise, the new WTO head will have to confront these constraints and chart a new path for reforms in the global body that favours the rebalancing of the world trading system for the developing world.