Business International

After nomination, can U.S. unilaterally stall the WTO Chief’s appointment?

After two months of interviews and consultations, the World Trade Organization’s General Council has finally made its final choice and recommended Ngozi Okonjo-Iweala of Nigeria as its next Director-General. By doing so, Okonjo-Iweala would become the first woman and first African to lead the WTO.

David Walker, the Chair of the General Council, said, “She clearly carried the largest support by Members in the final round and she clearly enjoyed broad support from Members from all levels of development and all geographic regions and has done so throughout the process.”

However, there is one influential member-state that does not support her candidacy: the United States.

Not long after the WTO’s announcement, the U.S. Trade Representative, Robert Lightizer, expressed its dissent in a statement, arguing that Yoo Myung-hee of South Korea, the other runner-up for the post, is more qualified. The statement said that the WTO “must be led by someone with real, hands-on experience in the field.”

The U.S. is not only the world’s largest economy, but it’s also the WTO’s largest contributor and a founding member. As such, not having Washington on board can be problematic for the organization and the upcoming Director-General.

Since the WTO takes its decision on a consensus basis, the U.S. could also significantly delay the election process – but the upcoming presidential elections could also have an impact.

Yoo VS Okonjo-Iweala
The United States claims that Okonjo-Iweala lacks firsthand experience in trade and trade policy.

Okonjo-Iweala is an economist and was Nigeria’s Minister of Finance twice, from 2003–2006, and 2011–2015. Yoo, of South Korea, has had more direct experience with trade, having spent most of her career in South Korea’s Ministry of Trade. According to Bloomberg, the U.S. fears Okonjo-Iweala is too much of an internationalist. However, countries like China and Japan opposed Yoo’s candidacy, and Okonjo-Iweala also had the support of the European Union.

“It is not hard to see that the US action fits Trump’s ideology of favouring bilateral trade deals over the multi-lateral system embodied by the WTO,” Meenal Shrivastava, a professor of political economy at the University of Athabasca in Canada, said.

Traditionally, the WTO General Assembly picks its Director-General via consensus, and as such, the U.S. objection to her candidacy could be a dealbreaker for the Organization – or a significant headache.

What’s Next?
Fred Carver, an advisor at the UN Association of the U.K. argues that: “The US wishes to block the appointment but cannot as such,” he said, “They can prevent consensus from being achieved and so force the WTO to call a vote at its Nov 9th meeting, but if, as polls indicate, this administration has been voted out by then I imagine this will be seen as a last act of petulance by a lame duck administration, and not the crisis that a failure to reach consensus would otherwise be.”

A meeting is indeed scheduled for Nov. 9, and there could be a new administration in Washington by then. Thus, the results of the election are going to be crucial in the faith of the WTO’s leadership.

The WTO is therefore seriously facing the possibility of a deadlock, and negotiations between the United States and the WTO are likely ongoing at a very high level to find a compromise, a source said on the condition of anonymity.

“This administration prefers the pre-WTO practice of negotiating the outcome of trade disputes rather than being bound by WTO rulings,” Shrivastavasaid, “both practices tip the balance of negotiations in favour of the US.”

The United States has been critical of the WTO over the past few years. Its most recent statement said: “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.”

If the U.S. continues to oppose her nomination, it could put the WTO in weeks or months of stalemate. The former Director-General of the organization, Roberto Azevêdo, a Brazilian diplomat, stepped down in August, so the seat has been empty since then. There are currently four deputies in charge, but there are limits to what they can accomplish.

“This is an organization that functions best when there’s a Director General leading it,” Keith Rockwell, spokesperson for the WTO, said in a phone interview, “it’s an organization beset by challenges and we need leadership to make it go forward. “

Nevertheless, the now-nominee for the post, Okonjo Iweala has shown optimism in a Twitter post shared after the U.S. dissent:

“Very humbled to be declared the candidate with the largest, broadest support among members & most likely to attract consensus. We move on to the next step on Nov 9, despite hiccups. We’re keeping the positivity going!”

“By talking about accountability to the interests of ordinary citizens and to the common good in the Covid-era, Ngozi Okonjo-Iweala’s platform goes beyond trade wars to directly address the current crisis of legitimacy of the trade system,” Shrivastava explains, “Unfortunately, the US veto remains the biggest obstacle to any such possibility.”


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