On October 7, 2020, the World Trade Organization announced Nigeria’s Ngozi Okonjo-Iweala and South Korea’s Yoo Myung-hee had advanced to the final round in the race to be its director-general, setting the stage for the first woman to lead the 25-year-old organisation.
“Our aim continues to be to encourage and facilitate the building of consensus among members, and to assist in moving from this final slate of two candidates to a decision on appointment,” WTO General Council Chairman, David Walker, said during a meeting Thursday in Geneva.
Walker said the last phase of the selection process will begin on October 19 and run until October 27, after which the WTO will seek to name a consensus winner.
The WTO was established in 1995 and serves two principal functions. First, it provides a set of multilaterally agreed rules governing policies affecting both trade in goods and services, and the protection of intellectual property. Second, the WTO provides a forum for administering the rules, settling trade disputes, and pursuing negotiations to reduce trade barriers, and to strengthen and extend the multilateral rules.
Earlier in the year, the WTO said hopes for a V-shaped recovery in 2020 may be overly optimistic as the group’s key trade barometer hit an all-time low even as global trade fell to an unprecedented low in the second quarter of the year.
The organisation has seen its influence wane in recent years as the two largest economies in the world, the U.S and China, have adopted more protectionist policies.
There is a broad consensus that the WTO needs reform, but no consensus on what reform should look like. The director-general can attempt to advance this debate, demanding leaders’ attention, brokering deals, galvanising efforts towards finding potential ways forward and offering a positive narrative for the organisation’s future role. However, progress may be hard to come by.
Whichever of the two candidates wins the selection process, they have their work cut out for them, especially at a time when the organisation is under intense pressure to reform from the United States, which asserts the WTO has failed to restrain Chinese state capitalism and has unfairly declared parts of U.S trade law against WTO rules.
The United States will be critical in determining who becomes the next head of the organisation. U.S. Trade Representative, Robert Lighthizer, in June, told a House Committee panel that he will press for fundamental change at the World Trade Organisation, which he said “has failed America.”
Lighthizer said the WTO was in need of “fundamental reform” after having failed the U.S. and the world, taking specific note of how it has dealt with China, a country that has frequently drawn the ire of the Trump administration.
He told the House Ways and Means Committee on June 17, that the new director-general needs to understand the “fundamental problem that an extremely large state-run economy cannot be disciplined into the current WTO rules.”
He vowed to veto any candidate if he detects “any whiff of anti-Americanism.”
It is unlikely both candidates would be unacceptable to Washington. William Reinsch, a trade official in the Clinton administration and senior adviser at the Centre for Strategic and International Studies told Bloomberg “I don’t see how you could conclude that either candidate would be unacceptable, from a U.S. point of view.”
On how the WTO should address Washington’s complaint about China’s state capitalism and developing country designation, the Nigerian born economist posited “those are some critical issues that members will need to discuss and debate on. But let’s put it this way, we must make sure that all members of the WTO feel that the balance of rights and obligations for all members of the WTO is about a fair system. So, that’s why it’s important to listen to who feels it’s not fair and then restore that balance of rights and obligations that members need to undertake.”
Most observers believe that Dr. Okonjo-Iweala, a former finance minister, is the strong favourite to win the leadership race. If elected, she would be the first African to run the WTO. The Financial Times called her “a well-known policymaker, having negotiated a large sovereign debt write-down and battled corruption as Nigeria’s finance minister, and served as a managing director at the World Bank”.
Much of her career, the British Broadcasting Corporation noted, “was spent as an economist at the World Bank. She eventually rose to the position of managing director, essentially second in command at the institution. She has been an unsuccessful candidate for the top job at the bank. She is currently chair of the board of the international vaccines’ alliance, Gavi. She has not spent her career immersed in the details of trade policy as some other candidates did. But her work as a development economist and finance minister means she has often had to deal with international trade.”
Dr. Okonjo-Iweala’s chance is likely to be further boosted by Japan and China’s reticence to back the candidate from South Korea. Tokyo and Beijing, according to FT, “are likely to exercise a de facto veto against Ms. Yoo because of political tensions with Korea.”
Okonjo-Iweala has emphasised her World Bank experience managing a large multilateral organisation and her role as chair of the board of Gavi, a public-private alliance to develop vaccines for low-income countries. The drive to create a vaccine has sparked a debate about patents, which are protected by WTO agreements. But Dr. Okonjo-Iweala “has fought to overcome a perception that, with limited experience at the WTO and never having served as a trade minister, she has relatively little knowledge of the complexities of trade”. She told the Financial Times recently, “They’ve narrowed trade to become negotiations, but that is not what it’s all about. If the problem of the WTO was people with negotiating skills, why hasn’t the problem been solved?”
In her campaign manifesto, she had vowed to rally WTO members, make the organisation listen to them, seek common ground, hunt for solutions, rebuild trust and return to its founding mission. “I want to bring a fresh pair of eyes and ears to the WTO and make it fit to thrive for the 21st century.”
She has persistently insisted that the multilateral trading system must be stable, predictable and fair and can govern trade for every member. She said she was putting herself forward to lead the WTO because, “the WTO needs a leader at this time, a fresh face, an outsider, someone with a capability to implement reforms, and can work with members to make sure that the WTO comes out of the partial paralysis that it is in, and move to serve the world better”.
She told Nikkei Asia, “I am a reformer. I have a reputation as a reformer. I have strong political and negotiation skills. I’m a good listener and you need listening skills to make this work. I’m pragmatic and I’m solutions oriented.”
On what the global south would benefit from her leadership of the WTO, she asserts that, “the expectation is that trade should benefit all members and where it does not, and where the south has been left behind, we should deploy the instruments that are available to make sure we enable countries and members in the south to trade more and to derive more benefit from the multilateral trading system that they have. If am selected as DG, I would be very keen to make sure that instruments like aid for trade, which involves technical assistance, capacity building and working with other organisations such as the World Bank and the regional development banks, to be able to deliver to countries, what they need to improve investment within their borders, so that they can process their goods more, create more jobs and have more to trade. That is what I would be doing to make sure the south improves its position and benefit from the multilateral trading system.”
For Nigerians, she would be remembered as the cerebral and highly performing finance minister who successfully managed the country’s unpredictable finances and unstable economy; helped persuade creditor nations that a petrol-rich part of Africa infamous for its inefficient ways was satisfactorily on the mend to merit a write-off worth about 60 per cent ($18billion) of the country’s external debt and developed reform programmes that helped improve governmental transparency and stabilising the economy.
Her resume is intimidating and her capacity for the job is in no doubt. Apart from chairing the Board of Gavi, the Global Alliance for Vaccines and Immunisation, she is also Senior Adviser at Lazard, one the world’s premier financial advisory and asset management firms.
Previously, Dr Okonjo-Iweala served twice as Nigeria’s finance minister, from 2003-2006, 2011-2015, and briefly as foreign minister in 2006, the first woman to hold both positions. She spent a 25-year career at the World Bank as a development economist, rising to the number two position of managing director, responsible for an $81 billion operational portfolio including Europe and Central Asia, South Asia, and Africa (2007-2011).
She is currently also Chair of the Board of the African Union’s African Risk Capacity (ARC), an innovative weather-based insurance mechanism for African countries; and co-Chair of the Commission on the New Climate Economy with Lord Nicolas Stern and Paul Polman. In addition, she is a member of numerous boards and advisory groups, including the Rockefeller Foundation, the Asian Infrastructure Investment Bank, Harvard University, the Oxford University Martin School Advisory Council, Mercy Corps, Women’s World Banking, the World Economic Forum Young Global Leaders Foundation, the International Commission on Financing Global Education (Chaired by Gordon Brown), among others.
Dr Okonjo-Iweala is a recipient of Bishop John T. Walker Distinguished Humanitarian Service Award (2011), the David Rockefeller Bridging Leadership Award (2014), the Devex Power with Purpose Award (2016), the Global Fairness Award (2016), and the Columbia University Global Leadership Award (2011), to name a few. She has received over 10 honorary degrees, including from Yale University, the University of Pennsylvania, Brown University, and Trinity College, Dublin.
She holds an A.B. in Economics from Harvard University, and a Ph.D. in Regional Economics and Development from the Massachusetts Institute of Technology (MIT). She is the author of numerous articles and several books, including Reforming the Unreformable: Lessons from Nigeria (MIT Press, 2012), and The Debt Trap in Nigeria: Towards a Sustainable Debt Strategy (Africa World Press, 2003).
