WTO: Why Okonjo-Iweala Is A Clear Best Choice |The Source

By Hafed Al-Ghwell

A clear best choice to lead world trade reform

Erudite debates, extensive interviews and the occasional whiff of controversy surround the selection process for the pivotal and crucial role of director-general of the World Trade Organization (WTO). Some of the candidates are unknown outside top-level business, international organizations and the upper echelons of political power in some of the world’s foremost nations.

However, considering the woeful circumstances the world is in, if there were ever a choice that the Arab world ought to pay attention to, this would be it.

The world has yet to bring the coronavirus pandemic fully under control, but what little progress there has been has sparked the next phase — rebuilding. The WTO is crucial in steering the world in a more equitable and sustainable direction.

Unfortunately, the post-pandemic world is likely to remain hobbled by great-power rivalries, expansive regional scuffles and an increasingly disenchanted developing world, seemingly excluded from the promised bounties of globalization.

The developed world is increasingly skeptical of international trade’s benefits, with concerns ranging from environmental degradation and climate change to infringements on sovereignty, given international trade’s aversion to protectionism.

The result is a potentially insular world, pursuing connectedness without meaningful cooperation and now desperately forging regional or bilateral ties as easier alternatives to serious reforms.

Washington single-handedly sought to reform the WTO’s guardianship of what is now a 73-year-old global liberal trade order, convinced the organization was no longer arbiter of (mostly) Chinese abuses or willing to curb Beijing’s designs for a world in disarray. However, the WTO’s 164 members cooperate and function by consensus and one country’s dogged pursuit for reforms was bound to fail.

Washington’s praise for bilateralism and pursuit of greater insularity did not help its argument. “America First” and the tariff regimes born from it were anathema to an organization built to do the exact opposite.

Clouds of uncertainty now hang over about $25 trillion in global GDP stemming from uninterrupted trade flows.

The pandemic has done its fair share of damage but hamstrung trade negotiations and the failure to resolve trade disputes due to the WTO’s crippled legal functions contributed to this growing impasse.

The outgoing director-general, the Brazilian Roberto Azevedo, has stepped down a year before the end of his second term, leaving a dysfunctional WTO at a time when robust multilateralism and revitalized global trade is desperately needed.

Economies the world over are embattled by repeated shut-downs and pervasive uncertainty fueled by fears of additional waves before and even after a vaccine is found — coupled with long-term health complications attributed to the virus.

Additionally, over $10 trillion in economic stimulus from higher and middle-income countries has grossly distorted the global market landscape at the expense of poorer nations. “Precautionism” has overtaken prudent planning and cross-border cooperation among otherwise friendly countries while regional rivalries and flexing of new-found geopolitical muscles have set back trade liberalism.

While there will certainly be a lot of hype surrounding each candidate, and inflation of what they can bring to the WTO, it is apparent the organization is in serious need of introspection and reform, led by the incoming director-general.

Eight candidates have been nominated, not only to fix the organization from within but also to balance trade competition among the world’s largest economies, and re-define the role of regions in the emergent multinode global supply chain models billed as alternatives to China’s manufacturing monopoly.

Most notably, the new director-general must carefully navigate the increasingly turbulent waters between the US and China in a way that appeases the polar opposites without disregarding the developing world.

Diplomatic experience will be as vital as technocratic expertise. However, what will really stand out is the ability to guide high-level decision making and mediate teething issues between members.

This is where Dr. Ngozi Okonjo-Iweala, Nigeria’s former Minister for Foreign Affairs and also Finance and Economy, stands out.

She has extensive experience at the highest level of economic governance, trade and international finance, occupying several senior positions at the World Bank, rising to take up the No. 2 post as managing director. In her two terms as Nigeria’s finance minister she negotiated the cancellation of about $18 billion in debt, spearheaded anti-corruption reform efforts and oversaw a recalculation of Nigeria’s GDP, which resulted in a nearly 90 percent appreciation; crucial because it involved a fairly exhaustive data review to accurately capture Nigeria’s economic activity to unlock often missed growth and investment opportunities.

Her other accomplishments are too numerous to list, but what is most convincing is Dr. Okonjo-Iweala’s vision for the WTO should she take the helm. Her approach separates problem solving and dispute resolution on trade matters away from the usual trappings of political bickering. For China, this would be a welcome leadership style that seeks to build on shared interests rather than antagonize differences.

She has also stated her hopes for China to continue playing its role as an economic growth engine in the post-pandemic world, as it did after the global financial crisis in 2008. It is a realistic approach to

China’s hunger for resources, which has and still is an important driver of economic growth for most of the resource-rich global south. For the US, the jury is out on whether their preferred candidate will have an appreciable anti-Beijing tilt since Washington’s comments on the candidates and participation in the selection process are not made publicly known.

However, Dr. Okonjo-Iweala already has extensive experience operating west of the Atlantic as senior staff in the World Bank, holds US citizenship and, more importantly, agrees with Washington’s criticisms of the WTO’s over-reach.

Europe, on the other hand, withdrew its nominees, seemingly in support of the outcry from the developing world seeking a seat at a table traditionally reserved for middle to higher income countries.

Dr. Okonjo-Iweala’s views and priorities are likely to please some ears in Brussels and Frankfurt, given their focus on updating WTO rules to better account for 21st-century issues ranging from the digital economy, climate change, inclusivity and participation of women in economic activity as well as “ trade not aid”  for Africa, as Dr. Okonjo-Iweala is famous for saying. It is a progressive platform that seeks to undo the notorious circumvention of WTO rules and the frequent destabilization of members’ rights and obligations.

Developing countries, in particular, have always been dealt the short end of the proverbial stick in the WTO’s special treatment for the privileged few at the expense of the rest.

The Arab world can be assured that Dr. Okonjo-Iweala, who worked in the region extensively in her long career at the World Bank, will prioritize fairness and cooperation among equals at a time when the region must quickly examine ways to mitigate the negative impact of peak oil.

Forecasts predict a sustained drop in energy prices starting in the early 2020s, and for the oil-dependent Arab world economies the pandemic and increasing focus on climate change is a wake-up call. Economic diversification and increased trade will not happen overnight and will need the patient guidance of well-run supranational bodies such as the WTO to steer countries through the uncharted waters of increased regionalization, free trade and economic specification.

Today’s WTO is far from the ideals Dr. Okonjo-Iweala seeks and will require a lot of soul-searching and change to find renewed purpose in a tumultuous post-pandemic world. Her visionary leadership outside the traditional scope has the most potential to reverse the turn toward insularity and navigate the murky waters of geopolitical rifts to build common interests upon which multilateralism is founded. A new WTO must use today’s challenges to safeguard the global liberal order’s march toward a more equitable, climate-friendly and resilient future.

In short, Dr. Ngozi Okonjo-Iweala stands out as an exceptional candidate for exceptional times.

Hafed Al-Ghwell is a non-resident senior fellow with the Foreign Policy Institute at the John Hopkins University School of Advance International Studies. He is also senior adviser at the international economic consultancy Maxwell Stamp and at the geopolitical risk advisory firm Oxford Analytica, a member of the Strategic Advisory Solutions International Group in Washington DC and a former adviser to the board of the World Bank Group. Twitter: @HafedAlGhwell