Monday, February 8, 2021

Nigeria’s Ngozi Okonjo-Iweala poised to be first woman and first African Director General of the WTO after U.S. too decides to back her

Nigeria’s Ngozi Okonjo-Iweala, former two-time finance minister and former managing director of the World Bank, is poised to become the next Director General (DG) of the World Trade Organisation (WTO). The 164 nations comprising the Geneva-based body cleared the last hurdle to arrive at a consensus on its next leader, the first woman and first African in its 26-year history, when the U.S. decided on January 5 to back Okonjo-Iweala. The WTO’s General Council is expected to formalise her position for a four-year term.

Earlier, South Korea’s Trade Minister Yoo Myung-hee, whose nomination the Donald Trump administration had supported, withdrew from the race, ending the long tussle that had narrowed down to the two women after six other candidates had been eliminated by September. A doctorate in economics from the Massachusetts Institute of Technology, Okonjo-Iweala’s candidacy was backed in October by the 27 European Union (E.U.) states and African and Caribbean nations, but was opposed by the Trump administration.

Okonjo-Iweala, who was until recently chairperson of the board of Gavi, the U.N.-backed public-private alliance to develop vaccines for low-income countries, had faced a stiff contest from within the African region. Besides an Egyptian nominee whom the African Union had initially backed, Kenya’s

former Trade Minister who has served as chair of the WTO’s general council, was also in the running. The global body has been engaged in a search for leadership since the premature departure in August of Brazil’s Roberto Azevedo. The U.S. suggestion for an interim head in Alan wolff, one of the four Deputy Directors General, was vetoed by China.

While Okonjo-Iweala is likely to commence her stint under relatively favourable circumstances in view of Washington’s renewed commitment to multilateral institutions, the organisation is confronted by many unprecedented challenges in its history. Arguably the most urgent priority for the incoming DG would be to fill vacancies to the panel of judges to the appellate body that adjudicates disputes among nations. The process has stalled since 2019 on account of systematic U.S. opposition under Donald Trump to approve fresh nominations on the grounds that most of the rulings handed by the WTO had gone against Washington.

Undoing the damage to global trade flows owing to the U.S-China bilateral disputes from the Trump era is another extremely contentious and delicate area. Washington had reacted strongly to the potential erosion of its global dominance — invoking national security provisions to slap punitive tariffs on steel and aluminium imports — to buttress Donald Trump’s nationalist “America first” agenda. Two decades after the country’s entry into the WTO, China’s quest to be accorded the status of a market economy is a subject of litigation as successive U.S. administrations and the E.U. states dispute a provision in Beijing’s treaty of accession to the world body. The upgrade would allow Chinese exports to be compared to its domestic prices rather than with higher third country rates when anti-dumping cases are brought against Beijing.

Western allies have also alleged that Chinese state-subsidies to domestic manufacturers and stringent terms on technology transfer for western firms seeking market access create unfair competition and distort global commerce. Beijing, which has emerged as the world’s second largest economic power, on the other hand, makes no secret of its quest for global economic, military and technological supremacy.

These sensitive issues could reverberate in multilateral negotiations on reforms to the WTO structure and further expansion of the global trade agenda. Okonjo-Iweala would have to exert her diplomatic skills to enable the principal players — the U.S., China, the E.U. and countries from the global south — to harmonise their positions. While uncertainty lingers over the WTO’s trajectory, it is hard to over-estimate its relevance today to counter economic protectionism around the world, as populism and narrow nationalism hold sway. The complexities of shaping a global response to the COVID-19 pandemic and climate change underscore the imperative need for concerted efforts to reshape humanity’s common priorities.

By Garimella Subramaniam


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