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The process of selecting a new Director General for the WTO
moved from what had been a relatively smooth process to one of
uncertainty Wednesday (October 28) when the US blocked the
selection of former Nigerian Finance Minister Ngozi Okonjo-Iweala
to lead the trade body, throwing its weight behind a rival
candidate.
The US said it is instead backing Korean Trade Minister Yoo
Myung-hee to be WTO's next Director General, with the Office of the
US Trade Representative (USTR) saying in a statement she "has all
the skills necessary to be an effective leader of the organization"
at a time it faces steep challenges.
"Minister Yoo is a bona fide trade expert who has distinguished
herself during a 25-year career as a successful trade negotiator
and trade policy maker," the statement continued. "This is a very
difficult time for the WTO and international trade. There have been
no multilateral tariff negotiations in 25 years, the dispute
settlement system has gotten out of control, and too few members
fulfill basic transparency obligations. The WTO is badly in need of
major reform. It must be led by someone with real, hands-on
experience in the field."
Because the selection of a new Director-General is made by
consensus, any of the 164 WTO members can block an appointment.
A WTO spokesperson made clear the US was the lone delegation
expressing opposition to Okonjo-Iweala's appointment, following a
meeting in Geneva Wednesday evening. "All of the delegations that
expressed their views today expressed very strong support for the
process, for the troika and for the outcome. Except for one," said
spokesman Keith Rockwell.
This raises another issue for the world trade body that has seen
the Appellate Body process grind to a halt at US insistence that changes must be
made, a situation reiterated in the US announcement
supporting Yoo to lead the WTO. A senior US official said the US
opposition to Okonjo-Iweala is because she has no background in
trade while Yoo has an extensive background in trade policy. This
sets the stage for a vote at a November 9 General Council
meeting.
Some reports indicate the links between Okonjo-Iweala and former
WTO chief Pascal Lamy and former World Bank President Robert
Zoellick—she held the number two spot at the World Bank under
both Lamy and Zoellick—could have been a factor in the US
stance. Others have suggested the US could use its position to
extract actions in other areas at the world trade body. Still, this
represents yet another challenge for the WTO.
Opposite the US, China likely prefers the elevation of
Okonjo-Iweala to WTO's top spot, seeing her as under less potential
political influence from the US. China has taken more aggressive
action against US trade policy at WTO, including a dispute targeting US Section 301
duties on billions of dollars in Chinese goods imposed
during the US-China trade war.
Until a new Director General is selected, WTO's four deputy
Directors-General, Yonov Frederick Agah of Nigeria, Karl Brauner of
Germany, Alan Wolff of the United States and Yi Xiaozhun of China,
will continue to lead the body on a joint acting basis.
One reason former Director-General Roberto Azevêdo cited for his
early retirement late this
summer was to give the body time to select a new
leader well in advance of next year's Twelfth Ministerial
Conference (MC12), giving the new leader an opportunity to make an
early mark on the trade body. With the US action, that timetable
could be in jeopardy.
Posted 29 October 2020 by Richard Morrison, Writer/Editor, S&P Global Commodity Insights and
Roger Bernard, Policy Analyst, Refining Chemicals And Resources Solutions, S&P Global Commodity Insights
