Compass Money: Off to the Races – The Battle for the WTO’s Top Job
The World Trade Organization (WTO) took another step towards selecting its new Director-General. The organization’s decision-making team announced on September 16 that it narrowed down the shortlist from eight candidates to five. The victor, if one emerges, will face an uphill battle against a world order marked by a growing distrust of multilateralism and increasing hostility toward the WTO.
The hunt for the WTO’s new leader arrives as the organization is on its knees. Its rules and regulations have been called antiquated, and experts speculate that the system may be too frail to undergo significant modernization. Once an unquestioned authority, the organization’s dispute settlement Appellate Body has been crippled by an impasse in appointing new judges, making it unable to perform basic functions. This comes at a time when pending disputes are greater than ever, and when protectionism seems in vogue. Additionally, more countries are turning away from multilateralism, putting the purpose of the WTO itself into question.
The WTO’s most existential challenge is the ongoing U.S.-China spat. As both countries circumvent WTO rules and ramp up protectionism, the WTO has been relegated to a horrified bystander. It stands caught in the crossfire—with the United States, armed with raw economic clout and the threat of withdrawal, essentially rendering the organization impotent. Both countries have the power to block any Director-General candidate; United States Trade Representative Mr. Lighthizer vowed to veto anyone with even “a whiff of anti-Americanism.”
Amina Mohamed of Kenya and Ngozi Okonjo-Iweala of Nigeria are widely considered to be the frontrunners for Director-General. If elected, either would be the first woman and the first African to lead the WTO.
Mohamed, on her second bid for the role, is a WTO insider with a mastery of the organization’s technicalities. A trade heavyweight, she served as chairperson on many WTO decision-making bodies, notably the 2015 Ministerial Conference. Mohamed’s platform centers around mending the WTO from within. “The WTO must regain its centrality in global economic governance,” Mohamed said. “For that to happen, the WTO must be reformed, so that its rule-making function is revived, extending the rule book to new areas, such as e-commerce, and strengthening existing rules.”
Okonjo-Iweala, while a WTO outsider, has a stellar background in development economics and trade negotiation. As finance minister, she successfully renegotiated Nigeria’s abysmal debt agreements, and as the second-in-command at the World Bank, she spearheaded initiatives to divert more funds towards grants and soft loans for poorer countries. Her platform primarily revolves around rebuilding trust between the WTO’s members. “There are a lot of people with technical skills at the WTO,” Okonjo-Iwaela asserted. “Something else is needed, strong political skills, someone able to engage leaders in a substantive way.”
Joining Mohamed and Okonjo-Iweala are South Korean Trade Minister Yoo Myung-hee and Saudi Royal Court Advisor Mohammad Maziad Al-Tuwaijri. Also still in the running—perhaps surprisingly—is former U.K. trade minister and fervent Brexiteer Liam Fox. They are all distinguished individuals, but analysts suggest the trade and political disputes of their home countries render them less viable options to win the unanimous support needed from all 164 members of the organization.
Certainly, the new Director-General will have a lot on their plate. They will need to modernize and reinvigorate the beleaguered organization, simultaneously restoring trust with its partners. They must also walk the precarious line between China and the United States, and bring both countries back to the table. This is, of course, assuming that a winner is chosen—the WTO’s continued gridlock means that even appointing a new Director-General would be a success.