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US should support Ngozi for WTO Director General

Written by DANIEL F. RUND

The WTO is the premier multilateral organization dealing with trade, and membership is a mark of success for countries seeking full participation in the global economic system. Roberto Azevêdo, the WTO’s current Director General, announced in May that he would be stepping down as head of the organization one year earlier than planned. Since his announcement, member states have scrambled to put forward replacement candidates, and on Sept. 7, the second phase of the selection process will conclude. The US will have a big voice in this race, as will several other players, including China and India.

The United States has a number of legitimate complaints about the way the World Trade Organization (WTO) operates: It is too accommodating with its definition of “developing country;” it sets tariffs according to an outdated schema, and it has unfairly accused the U.S. of trade abuses. The USTR has accused the WTO’s Appellate Body of overstepping its authority in attempting to impose new obligations and “trade remedies.” As a result, the United States has considered quitting the organization or deemphasizing it in favor of other fora, such as the Organization for Economic Cooperation and Development (OECD). However, the WTO remains a strategically important institution, and the U.S. cannot afford to step away from it completely.

There are eight candidates now vying for the WTO’s Director General position: Jesus Kuri, a Mexican economist; Amina Mohamed, a Kenyan former Trade Minister; Tudor Ulianovschi, a Moldovan former Minister of Foreign Affairs; Abdel-Hamid Mamdouh, an Egyptian former Director of the WTO’s Trade in Services and Investment Division; Yoo Myung-hee, South Korea’s Foreign Trade Minister; Liam Fox, a former Secretary of State for International Trade in the UK; Mohammad Maziad Al-Tuwaijri, a current minister and economic advisor to Royal court of Saudi Arabia; and Dr. Ngozi Okonjo-Iweala, a Nigerian twice-former Trade Minister and Minister of Foreign Affairs.

For a variety of reasons, the best candidate for the U.S. to support would be Dr. Ngozi Okonjo-Iweala.

All of the other candidates are certainly qualified, but are unlikely to be nominated. Like other parts of the global spoils system, the role of Director General is informally expected to rotate from region to region, which means that there is a low likelihood of another Latin American, essentially ruling out Jesus Kuri. Thanks to Brexit, the EU is unlikely to accept any candidate from the UK like Liam Fox. Likewise, Japan is unlikely to accept a South Korean candidate, and the lingering sentiment from the murder of journalist Jamal Khashoggi will exclude the Saudi candidate. It is also hard to see the rationale for why it would be Moldova’s turn this year. On top of these factors, there is a sense that it is Africa’s “turn.”

Considering the complexity of current global trade relations and difficult reform work that the next Director General will have to oversee, it is essential that the candidate have skills that go beyond a working knowledge of trade issues and protocols and extend into coalition building. The candidate should be a person of stature, with a large rolodex, who is seen as an honest broker and dealmaker. A demonstrated track record of reform is a must, as well as the ability to rally others around a reform agenda. It has been noted that the WTO should not be thought of as needing saving, but that it does need someone with gravitas and political power who can have hard, honest conversations with global leaders.

Dr. Ngozi Okonjo-Iweala meets these criteria. She has considerable stature in the multilateral world, having been the Managing Director of Operations at the World Bank and a current member of the External Advisory Board of the IMF. Second, she has history of reform, having led the charge against corruption during her second term as Nigeria’s Minister of Finance and having successfully implemented the GIFMIS (Government Integrated Financial Management Information System). Finally, she has proven her ability in making tough deals, including spearheading negotiations with the Paris Club of Creditors that led to the wiping out of $30 billion of Nigeria’s debt.

If Ngozi Okonjo-Iweala was the only African in this race, member states would not hesitate to nominate her as the next Director General. However, she is one of three African candidates, and this has made the situation more complicated.

Abdel-Hamid Mamdouh of Egypt will have a hard time getting the nomination due to Egypt’s ongoing dispute with Ethiopia over their Nile Dam, but Kenya’s Amina Mohamed will be more of a challenge. Ms. Mohamed became the first female Chair of the WTO’s General Council in 2005 and has an impressive resume. She is well regarded globally and is a long-time fixture at the WTO. However, given Okonjo-Iweala’s stature, rolodex, track record of reform, and willingness to take on challenges, I believe that she will be the nominee. Mohamed instead would be an excellent choice to run the Commonwealth of Nations; the Secretary Generalship is up for grabs, as member nations have denied requests for Patricia Scotland’s leadership to be automatically renewed.

Given the Trump administration’s interest in promoting U.S. businesses through the Prosper Africa initiative, Ivanka Trump’s Women’s Global Development and Prosperity (W-GDP) initiative, and the administration’s interest in shaking up the WTO, who better than Ngozi to bring together a coalition of the willing and make the necessary changes?

It is rumored that India and China are both in favor of nominating an African, and it should be noted that in the next 10 years, Africa will be front and center in terms of global trade. This could be our last chance to get in on the proverbial ground floor.

I have argued that the U.S. needs to pay more attention to leadership races in the multilateral system because these institutions have a much greater influence than most people realize. They make judgements, they set standards, and they have incredible influence, particularly in developing countries. There are many — and legitimate — criticisms for the multilateral system: It is slow; it has suffered from corruption, and there are times when it does not produce results which are favorable to the United States. Regardless of this, quitting the WTO is not the answer. It has too many member countries, and American businesses cannot afford to be excluded.

In Ngozi Okonjo-Iweala, we are being presented with an opportunity to support a reformer candidate with a proven track record. She is a changemaker who has spent over two decades in the United States; she understands our system and our needs, and she represents our best opportunity to enact the changes the United States wants to see at the WTO.

Daniel F. Runde is a senior vice president and William A. Schreyer chair in Global Analysis at the Center for Strategic and International Studies. He previously worked for the U.S. Agency for International Development, the World Bank Group, and in investment banking, with experience in Africa, Asia, Europe, Latin America, and the Middle East.

Culled from TheHill