Fresh setback for Okonjo-Iweala as US wants WTO DG race reopened

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The United States (US) has suggested that the process to find a new director-general of the World Trade Organisation (WTO) needs to be reopened, BBC is reporting.

Robert Lighthizer, US trade representative, during an interview on Wednesday, said the WTO needs “someone with real experience in trade, not someone from the World Bank or a development person.”

Ngozi Okonjo-Iweala, former Nigerian minister of finance and former managing director (MD) of the World Bank, had got the support of 110 out of 164 member countries but the US opposed her candidacy.

The trade organisation operates based on consensus, that is, if one country opposes, a final decision cannot be made.

Iweala and Yoo Myung Hee, South Korea’s trade minister, are the final candidates for the top job at the WTO following the resignation of Roberto Azevêdo in May.

Following the lack of a consensus, the WTO had postponed the general council meeting to consider the appointment of a new DG till further notice.

Lightizer confirmed that there is no way the Trump administration will be persuaded to back Iweala in its remaining weeks in office.

He said the WTO is “massively in need of reform”, especially its dispute-resolving appellate body, which according to him, has evolved into a body creating a common law of trade, “taking away benefits” that members had negotiated for ” and putting restraint on things that had been conceded”.

The appellate body of the WTO has been rendered inactive by Donald Trump’s administration vetoing the appointment of new judges.

“I think there’s a consensus developing at the WTO that we need the appellate body reform,” Lightizer said.

“We need to start negotiating again, we need to start making headway. So I’m glad you brought up the WTO, it’s been clearly a focus for us and to us its an organisation that started off as a good idea and basically isn’t functioning very well, but I think that can be sorted out also.”

James Bacchus, a former chairman of the WTO appellate body, as well as a former US trade negotiator, said: “Effective multilateral cooperation to lower barriers to trade is urgently needed to help jumpstart the global economy and recover from the pandemic.”

“That requires creative leadership from an honest broker in the role of director-general.”

Despite speculations that the Joe Biden administration might have a different stance on Iweala’s appointment, the US president- elect has not confirmed his preference.

“We need to be aligned with the other democracies.. so that we can set the rules of the road instead of having China and others dictate outcomes, ” Biden had recently said on trade.

Simon Lester, a WTO expert at the Cato Institute in Washington, said that it would be a good idea if the Biden administration can trade off support for Iweala for political capital on other reforms.

According to Lester, this would be the fastest way to appoint a new WTO DG, because “opening up the selection process could be messy and complicated, and would lead to delays”.

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