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WTO faces uncertainty amid Trump threats, successor search

, September 3, 2020, 0 Comments

The World Trade Organization is now leaderless. The task facing Roberto Azevedo’s successor is mammoth, from the need for reform to fighting protectionism. The process to succeed him is also quite labyrinthine.wto-marketexpress-in

It’s a role that comes with a salary and allowances package of more than $500,000 and a title conferring considerable global prestige.

Yet whoever takes up the now vacant position of director-general of the World Trade Organization will have an unenviable job on their hands.

Brazil’s Roberto Azevedo, whose period in charge ended this week after seven years, has left the role a year earlier than originally planned. He said the decision was personal, but few would blame him for wanting to get out of an organization that has been beset by multiple problems and criticism in recent years.

The impossible job?

The most fundamental question facing the global trade body regards its relevance. When the WTO was founded in 1995 as the direct descendant of the General Agreement on Tariffs and Trade (GATT), the mood around global trade was unrecognizable from how it is in 2020.

Back then, there was a clear trend toward liberalization and the removal of trade barriers between nations. The appetite for trade deal negotiations was considerable.

But the last few years have seen the picture change dramatically. That impulse toward liberalization and negotiation has been replaced by protectionist instincts. There is evidence that the globalization mindset which made the WTO possible in the first place is in retreat across the world.

Under the Trump presidency, the USA has adopted a notably more unilateral stance on issues of global trade. It has been engaged in a trade war with China. Trump has also sharply criticized the WTO, calling it “horrible.” Yet American grievances predate the Trump era.

Former President Barack Obama’s administration took 16 cases against China alone at the WTO, including a case in its final week of office on the country’s aluminum industry. The American view that the WTO has trod far too lightly when it comes to China’s heavily state-backed economy is one shared by the European Union and Japan.

The Trump administration’s decision to block appointments to the WTO appellate body — its highest court — suspended that body’s ability to function. That has frozen all future cases and means the WTO does not currently have the power to enforce its treaties. While not many WTO member nations agreed with the US tactics, they have made WTO reform an urgent priority for whoever succeeds Azevedo.

The race is on

The process to succeed him is already well underway. Eight candidates are in the running, including: Jesus Seade Kuri (Mexico), Ngozi Okonjo-Iweala (Nigeria), Abdel-Hamid Mamdouh (Egypt), Tudor Ulianovschi (Moldova), Yoo Myung-hee (South Korea), Amina Mohamed (Kenya), Mohammad Maziad Al-Tuwaijri (Saudi Arabia) and Liam Fox (United Kingdom).

The decision as to who wins the contest is decided by the WTO’s 164 member nations, yet the selection procedure isn’t a simple vote. Three WTO ambassadors, who chair leading committees, run the process. They will meet member nations privately, where they will give their preferences without rankings or vetoes.

The aim of the game is for the members to find a consensus candidate, rather than simply one who gets the most votes. The eight candidates have been campaigning for the last two months, mostly by making virtual pitches to member nations as a result of the COVID-19 pandemic.

That process ends on September 7, and from September 7 to 16 the trio of WTO ambassadors will attempt to whittle the field down, first to five candidates and eventually to two. It’s hoped that Azevedo’s successor will be named by November, but few would be surprised if the decision drags on into 2021.

Voting will only take place if the above process fails to find a clear candidate. The early signs aren’t great — WTO members have failed to agree on a temporary caretaker director-general, meaning four deputies will handle the director-general’s duties for now.

Consensus candidates

The two favorites are Kenya’s Amina Mohamed and Nigeria’s Ngozi Okonjo-Iweala. If either emerges from the process, they will become both the first woman and first African to hold the role. Okonjo-Iweala’s lack of extensive experience in international trade may tilt the balance toward Mohamed.

The other six candidates will not like the fact that Mohamed and Okonjo-Iweala have been earmarked as front-runners from the start, but the process depends on candidates not being unpopular as much as it depends on them being popular. That makes it harder for candidates from certain regions.

The EU did not put forward its own candidate. Instead, it focused on finding an international candidate to back who could best deal with the major tasks facing the organization.

The US-China dispute is at the center of this. Candidates backed too enthusiastically by one of those blocs is likely to be unpalatable to the other. For that reason, the Mexican and South Korean candidates may struggle, due to Chinese perceptions that they will be US allies.

Both Mohamed and Okonjo-Iweala have said US criticism of the WTO’s appellate body are valid, agreeing that the body has at times gone beyond enforcement of treaties and veered into the making of international law.

That will likely make them attractive candidates to both the US and European blocs, while they are also guaranteed to garner significant support in Africa and across various other global regions

Wanted: Global trade reform zealot

The director-general doesn’t make global trade policy; instead, the role is akin to a chairperson, in that the director-general chairs the trade negotiations committee and can intervene in trade disputes by appointing people to adjudicating panels when members disagree.

However, the special circumstances greeting the next director-general may mean the requirements of the job are beefed up. Tackling the issue of protectionism, a policy that has been strengthened by the pandemic, will require an especially strong leader.

But an even more demanding task will be restoring the WTO’s credibility as a relevant international organization. That will require someone capable of convincing the most powerful WTO members that the organization is worth supporting.

For that, a candidate with a zeal for reform and the capacity to carry it out seems essential.