Nigeria’s Ngozi Okonjo-Iweala makes history twice by taking over the WTO
By Patrick Smith
Posted on Monday, 15 February 2021
Nigeria's Ngozi Okonjo-Iweala is the first woman and the first African to become director general of the World Trade Organisation.
REUTERS/Lucas Jackson
Crashing through glass ceilings, let alone ones with reinforced steel, doesn’t often happen in Geneva – the velvet-lined headquarters of the international system in Europe.
‘Chapeau’ to Nigeria’s Ngozi Okonjo-Iweala, as the well-watered burghers and bankers of this lakeside city would say.
As the first woman and first African to win the director general post of the of the 164-member World Trade Organisation (WTO) after navigating the body’s opaque electoral processes, Okonjo-Iweala will start work with a quotient of respect.
A little luck
Like Napoleon’s more successful generals, she was also lucky.
Back in November, then US president Donald Trump had ordered his trade envoy Robert Lighthizer to block her appointment – despite her winning support from more than 70% of the WTO members.
Then Joe Biden defeated Trump in the US elections, triggering several foreign-policy about-turns – among them was to give “strong support” to Okonjo-Iweala. And at 15.00 Geneva time on 15 February, the WTO held its general council online to confirm the new director general.
Okonjo-Iweala is expected at the organisation’s forbidding grey-stone headquarters this week, say diplomats in Geneva. After that, she embarks on the task of reforming, perhaps reimagining, the WTO for the pandemic and post-pandemic era.
Crashing through glass ceilings, let alone ones with reinforced steel, doesn’t often happen in Geneva – the velvet-lined headquarters of the international system in Europe.
‘Chapeau’ to Nigeria’s Ngozi Okonjo-Iweala, as the well-watered burghers and bankers of this lakeside city would say.
As the first woman and first African to win the director general post of the of the 164-member World Trade Organisation (WTO) after navigating the body’s opaque electoral processes, Okonjo-Iweala will start work with a quotient of respect.
A little luck
Like Napoleon’s more successful generals, she was also lucky.
Back in November, then US president Donald Trump had ordered his trade envoy Robert Lighthizer to block her appointment – despite her winning support from more than 70% of the WTO members.
Then Joe Biden defeated Trump in the US elections, triggering several foreign-policy about-turns – among them was to give “strong support” to Okonjo-Iweala. And at 15.00 Geneva time on 15 February, the WTO held its general council online to confirm the new director general.
Okonjo-Iweala is expected at the organisation’s forbidding grey-stone headquarters this week, say diplomats in Geneva. After that, she embarks on the task of reforming, perhaps reimagining, the WTO for the pandemic and post-pandemic era.
Trade fan
When The Africa Report asked Okonjo-Iweala last year why she was campaigning for what was widely seen as the job from hell, she smiled quickly and clicked back into her stride: “Because I’m really passionate about trade.”
Detecting our scepticism that the arcana of multilateral trade deals could ever fire up the emotions, she added: “Trade is not an end in itself, it’s a means to an end […] an instrument that helps deliver development so that those who have been marginalised can be brought in.”
That explains Trump and Lighthizer’s opposition to her. Their view of trade is mercantilist: maximise exports, minimise imports in the cause of economic nationalism.
Okonjo-Iweala sees trade as motor for growth, development and raising living standards, which she points out was in the original remit of the WTO. That has long been relegated behind battles over commercial dispute resolution and geopolitical rivalries between China and the United States.
Disputes and values
Those rivalries surface in the myriad issues locked in the WTO’s trade disputes settlement system but also in a battle about ‘values’ in the organisation. The US, along with the European Union, Japan, Brazil and pro-West powers argue for the primacy of market forces and trade-policy convergence – ideas they see as inconsistent with China’s economic system.
Since it joined the WTO in 2001, China has rejected the idea that its economic system, defined by many as state capitalism, should be a subject for scrutiny by the organisation. With economic nationalism in Washington and Beijing ballooning over the past five years, the stand-off in the WTO looks more intractable than ever.
READ MORE What can Africa expect from the Biden administration?
On the genteel campaign trail in Geneva, Okonjo-Iweala walked the fine line between the two. She argued that the WTO should not exclude any economic system but rather look at how different economic systems create trade distortions and how the organisation could update its rule book.
“The principles of stability, predictability, non-discrimination, fairness, transparency – these are all the important principles on which the WTO and the world trading system was founded,” Okonjo-Iweala told The Africa Report last year. “It delivered, it stopped all the trade wars and it can deliver again.”
Policy and populism
Turning that into policy as WTO director general, will be much harder as Dirk Willem te Velde, a trade expert at the Overseas Development in London argues: “Amongst several global popularist moves, such as ‘Buy American’, the EU’s strategic autonomy approach to be launched this month and concerns over subsidised production in China, the director general will face an uphill battle to use discussions at the WTO to reinstate the importance of free trade.”
For Te Velde, promoting free trade as a way to address the health (trade in PPE, vaccines, through safe and resilience supply chains), and climate crises (inducing innovation and trade in green technology) would be a prime and ambitious way to make the WTO relevant in the new era.
That would also position it as an international body helping to lead a recovery from the pandemic-triggered recession. Arguments about whether trade is good or bad have been overtaken by events, says Te Velde.
First tests
All that will be tested at the WTO’s 12th ministerial conference, which is due this year. It will be an early indicator of Okonjo-Iweala’s chances of resolving the pitched battles between the members.
“The ministerial conference can keep the WTO on the global economic governance map,” says Te Velde, as well as “keep discussions ongoing on e-commerce and services, deliver on action on WTO declarations such as gender.”
Before the grander ambitions of steering a global recovery, the ministerial conference will have to produce a formula for updating WTO rules and unlocking the frozen dispute settlement mechanism.
READ MORE Nigeria’s Ngozi Okonjo-Iweala set for WTO leadership after South Korea’s Yoo quits
First, Okonjo-Iweala and colleagues such as New Zealand diplomat David Walker, will have to develop some credible proposals with member states.
Will Okonjo-Iweala be able to persuade the US to end its boycott of the WTO’s appellate body, which adjudicates trade disputes? Although US President Biden offered strong backing to Okonjo-Iweala, he will not be much more conciliatory on trade than his predecessor: whether towards China or Europe.
A fishy quick win
Before the ministerial conference, Okonjo-Iweala could score a quick win by concluding WTO negotiations over fisheries. In July, she told the New Zealand delegation that the negotiations over fishing grounds and subsidies have been progressing “relatively well”. A success there could encourage members to reach agreement on still more contentious issues, she said.
Fishing subsidies and the devastation to national fishing grounds by fleets of foreign industrial trawlers is an urgent concern for African economies, especially those along the western seaboard.
READ MORE Wamkele Mene: ‘AfCFTA is going to be difficult but we’ve got to do it’
A senior African diplomat in Geneva tells The Africa Report that there were high expectations that Okonjo-Iweala would help start the dismantling the system of rich-country agricultural subsidies that have weighed heavily on so many farmers and exporters in the region.
“It is a matter of coalitions and alliances,” the diplomat says, “already we are having positive discussions with Australia on how to reform the subsidy system. This with public health and climate change are firmly on the WTO agenda now.”
What role for Africa?
Yet Ismail Lagardien, a former World Bank economist writing in South Africa’s Business Day, was less sanguine about Okonjo-Iweala’s agenda: “To be absolutely clear: Okonjo-Iweala will head the WTO with the blessing of the US and the EU. It is not clear whether she received the blessing of the African Union or any of the mangled mess that is Africa’s regional organisations.”
“She will not represent Africa’s agenda, as some may expect, as she has to preside over the global trade regime and changing the WTO would be unimaginably difficult within one four-year term.”
READ MORE Informal sector holds key to unlocking intra-Africa trade, says Afreximbank
This pessimism is not shared by African diplomats in Geneva or by trade specialists such as Te Velde, who told us: “Okonjo-Iweala will also have a keen interest in African prospects.” There would have to be more focus on the economic cost of the Covid-19 pandemic to Africa, he argues.
Apart from being unable to afford the lavish stimulus programmes in Western economies and being at the back of the vaccination queue, Africa’s economies were, he says: “at the receiving end of global protectionism, trade wars and ‘buy local’ campaigns.”
Aid for Trade
One of the first conferences over which director general Okonjo-Iweala is set to preside is the Aid for Trade stocktaking event in March, which is to discuss the effect of the pandemic on developing economies.
It will be, says Te Velde, “an opportune moment to support a step-up in Aid for Trade for the poorest countries to ensure that trade can help speed up their recovery.”
READ MORE Greener Africa: Time for ‘free trade but also fair trade with Europe’
It might also be one of those rare occasions when the gladiators from the world’s two biggest economies can find some common ground on trade: how to finance it and make it work better in developing economies.
WTO formally appoints Okonjo-Iweala as its first female leader
Bryce Baschuk, Bloomberg News
Nigeria’s former finance minister Ngozi Okonjo-Iweala , Bloomberg
The World Trade Organization selected Ngozi Okonjo-Iweala to be the first woman and first African as its leader, tasking the former Nigerian finance minister with restoring trust in a rules-based global trading system roiled by protectionism and the pandemic.
During a virtual meeting on Monday the WTO’s 164 members unanimously selected the 66-year-old development economist to serve a four-year term as director-general beginning March 1. She can seek to renew her term after it ends on Aug. 31, 2025.
After withstanding a veto of her candidacy by the now-departed Trump administration, Okonjo-Iweala takes the helm of the Geneva-based WTO at a precarious time for the world economy and just as the organization itself is mired in a state of dysfunction.
She held a previous role as chair of the Global Alliance for Vaccines and Immunization after a public sector career in international finance, including two terms as Nigeria’s finance minister and some 25 years at the World Bank. Her dual U.S. citizenship means she’s also the first American to hold the organization’s top job.
Navigating the growing chasm between China and western nations -- which argue that China’s entry into the organization in 2001 failed to transform it into a market economy -- will be a key challenge.
'Deliver Soon'
The U.S. delegation to the WTO said it is “committed to working closely with Director General Okonjo-Iweala and she can count on the United States to be a constructive partner,” according to a statement released in Geneva. “Dr. Okonjo-Iweala has promised that under her leadership it will not be business as usual for the WTO, and we are excited and confident that she has the skills necessary to make good on this promise.”
China’s delegation to the WTO, in a statement, said “the WTO is at its critical moment and must be able to deliver soon. The collective decision made by the entire membership demonstrates a vote of trust not only in Dr. Ngozi herself, but also in our vision, our expectation and the multilateral trading system that we all believe and preserve.”
Washington and Brussels have railed against China’s massive subsidy programs, forced technology transfers and the state’s expansive influence over the Chinese economy -- policies that they say have collectively resulted in trade distortions that negatively affect the global economy.
During her campaign, Okonjo-Iweala acknowledged the necessity of rebuilding trust between the U.S. and China while trying to find areas of common interest. As a candidate she endorsed an ongoing an initiative among the U.S., EU and
Japan aimed at developing new disciplines for industrial subsidies, state-owned enterprises and forced technology transfers.
In the near term, Okonjo-Iweala may look for some early wins on issues including:
A multilateral accord to curb harmful fishing subsidies
Negotiations to govern the US$26 trillion global e-commerce marketplace, which could reduce cross-border hurdles for U.S. technology companies
Moderating talks to address the paralysis of the WTO appellate body, the forum for settling international trade disagreements
This week the European Union is expected to call upon U.S. President Joe Biden to consider a set of principals as a basis for negotiating and clarifying the WTO’s dispute settlement rules.
Bryce Baschuk, Bloomberg News
Nigeria’s former finance minister Ngozi Okonjo-Iweala , Bloomberg
The World Trade Organization selected Ngozi Okonjo-Iweala to be the first woman and first African as its leader, tasking the former Nigerian finance minister with restoring trust in a rules-based global trading system roiled by protectionism and the pandemic.
During a virtual meeting on Monday the WTO’s 164 members unanimously selected the 66-year-old development economist to serve a four-year term as director-general beginning March 1. She can seek to renew her term after it ends on Aug. 31, 2025.
After withstanding a veto of her candidacy by the now-departed Trump administration, Okonjo-Iweala takes the helm of the Geneva-based WTO at a precarious time for the world economy and just as the organization itself is mired in a state of dysfunction.
She held a previous role as chair of the Global Alliance for Vaccines and Immunization after a public sector career in international finance, including two terms as Nigeria’s finance minister and some 25 years at the World Bank. Her dual U.S. citizenship means she’s also the first American to hold the organization’s top job.
Navigating the growing chasm between China and western nations -- which argue that China’s entry into the organization in 2001 failed to transform it into a market economy -- will be a key challenge.
'Deliver Soon'
The U.S. delegation to the WTO said it is “committed to working closely with Director General Okonjo-Iweala and she can count on the United States to be a constructive partner,” according to a statement released in Geneva. “Dr. Okonjo-Iweala has promised that under her leadership it will not be business as usual for the WTO, and we are excited and confident that she has the skills necessary to make good on this promise.”
China’s delegation to the WTO, in a statement, said “the WTO is at its critical moment and must be able to deliver soon. The collective decision made by the entire membership demonstrates a vote of trust not only in Dr. Ngozi herself, but also in our vision, our expectation and the multilateral trading system that we all believe and preserve.”
Washington and Brussels have railed against China’s massive subsidy programs, forced technology transfers and the state’s expansive influence over the Chinese economy -- policies that they say have collectively resulted in trade distortions that negatively affect the global economy.
During her campaign, Okonjo-Iweala acknowledged the necessity of rebuilding trust between the U.S. and China while trying to find areas of common interest. As a candidate she endorsed an ongoing an initiative among the U.S., EU and
Japan aimed at developing new disciplines for industrial subsidies, state-owned enterprises and forced technology transfers.
In the near term, Okonjo-Iweala may look for some early wins on issues including:
A multilateral accord to curb harmful fishing subsidies
Negotiations to govern the US$26 trillion global e-commerce marketplace, which could reduce cross-border hurdles for U.S. technology companies
Moderating talks to address the paralysis of the WTO appellate body, the forum for settling international trade disagreements
This week the European Union is expected to call upon U.S. President Joe Biden to consider a set of principals as a basis for negotiating and clarifying the WTO’s dispute settlement rules.
No comments:
Post a Comment