After South Korea’s candidate, Yoo Myung-hee, pulled out of the race on February 6, the path was paved for Nigeria’s Ngozi Okonjo-Iweala to become the next director general of the World Trade Organisation. She is the first woman and the first African in the organisation’s 25-year history to have accomplished this. In fact, the United Nations itself — since its inception in 1945 — has never had a woman in the number one spot.
Dr Okonjo-Iweala has already made history in Nigeria by becoming the country’s first woman finance minister (between 2003-2006 and 2011-2015) and by briefly serving as the foreign minister in 2006. She is a seasoned economist and an international development expert; she has an economics degree from Harvard University and a PhD in Regional Economics and Development from the Massachusetts Institute of Technology. She also has worked at the World Bank for 25 years, rising to the number two position of managing director in 2007, handling a US$ 81 billion operational portfolio in Africa, South Asia, Europe, and Central Asia.
During her time here, Dr Okonjo-Iweala was at the forefront of numerous initiatives to help poor countries. In 2010, she raised US$ 50 billion from donors for the International Development Association (IDA), which is the World Bank’s fund for the lowest income countries. In an interview with South China Morning Postin August 2020, she said, “I come with a résumé that shows I’ve done reform… And those reforms were bold — they were courageous, if you allow me to say so.”
The appointment of a new WTO DG became necessary after the former chief, Roberto Azevêdo resigned a year before the end of his term, officially stepping down on August 31, 2020. He had said that he wanted to give WTO members enough time to choose his successor. However, this rendered the organisation leaderless during a difficult time. The liberal international economic order was — and still is — facing a backlash, while the trade and technology war between the US and China has had a negative effect on global trade.
The US’s reluctance on appointments to the appellate body also stymies the WTO’s efforts to settle contentious trade disputes. The negotiations for the Doha Development Agenda have stalled — without any conclusive decision on important issues, such as public stockholding programmes for food security. Moreover, despite the resistance of developing countries, developed countries were keen on steering negotiations towards 'Singapore issues', which covers investment, competition policy, government procurement, and trade facilitation. The division between developed and developing countries became acute, with the Trump administration formally submitting a 2019 proposal to do away with the WTO’s self-declaratory mechanism for determining developing country status — a move that would affect India.
However, the biggest challenge facing the multilateral trading system today is Covid-19, because of which the world is facing its deepest recession since World War II. National lockdowns, export bans and trade restrictions that followed the pandemic have only highlighted the importance of keeping trade routes open for medical goods, equipment and vaccines.
Now that a vaccine is here, a more pressing issue has been the use of advance purchase agreements (APAs) by developed countries to secure vaccines first — while leaving developing countries to wait. Recognising the inequality in vaccine distribution and procurement, South Africa and India submitted a proposal before the WTO to suspend Covid-19 related intellectual property (IP) rights to allow countries to manufacture vaccines in a timely and affordable manner.
With Azevêdo’s resignation, it was high time that the WTO saw a woman and an African in the top spot. There have been WTO chiefs from Europe, Oceania, Asia, and South America. However, the organisation has never been led by an African, despite Africa representing 27 per cent of the WTO’s membership, with 35 per cent members from developing countries. Dr Okonjo-Iweala’s appointment as the WTO chief comes at a time when the world is extremely divided in terms of colour, race, and ethnicity.
Fadumo Dayib, the first female Somali presidential candidate sees her appointment “as a validation of African women’s competency and leadership skills, and of African women’s excelling despite the systematic hurdles and obstacles facing them”. Dr Okonjo-Iweala brings an impressive skill set to the table and would also bring a fresh perspective to the WTO as she has not worked in the organisation before. Since she is chair of the board ofGlobal Alliance for Vaccines and Immunisation(GAVI), and is the World Health Organisation’s Covid-19 special envoy, member states — particularly developing countries and LDCs — can hope to place vaccine manufacturing and distribution at the top of the WTO’s agenda.
However, despite having studied and worked in the United States for a large part of her life and also obtaining dual citizenship, Dr Okonjo-Iweala — who was supported by Africa, the European Union, and the Caribbean — did not receive the same support from the Trump administration. At a WTO meeting in October 2020, WTO spokesman Keith Rockwell had said, “One delegation could not support the candidacy of Dr Ngozi and said they would continue to support the South Korean minister [Yoo Myung-hee] — that delegation was the USA.” Yoo Myung-hee withdrew her candidacy in the first week of February after months of diplomatic pressure to pull out of the race.
The fact that Dr Okonjo-Iweala is from Nigeria, a developing country, would also mean that she has a deeper understanding of the social, economic, political, and cultural issues affecting low- and middle-income countries. Having worked for the upliftment of LDCs at the IDA and being well-versed with the ground realities that a developing country faces could very well be the balancing factor that the organisation requires. This is crucial, since the WTO has sometimes been accused of favouring developed nations.
Developing countries will be watching how the new DG deals with issues like the special & differential (S&D) treatment provisions that are being disputed by developed countries. While many would argue that the WTO DG’s role is purely administrative, the DG does wield significant soft power and there have been several instances of the use of this soft power in the past. A great example of this is Azevedo’s efforts that helped achieve consensus among countries on the Bali Package in 2013.
Dr Okonjo-Iweala will be taking over an organisation that has been leaderless since last August and is possibly facing its deepest crisis yet. The WTO has not been able to secure a multilateral trade deal for years and has also failed to meet a 2020 deadline to end subsidies for overfishing. Most notably, since 1995, the WTO has not been able to finalise any trade-negotiation round of global trade talks, thereby failing to provide any benefits to its members. The Doha round that began in 2001 was unable to benefit poor countries; many of these were African countries.
The organisation has also been unsuccessful in reaching any major pacts since 1995, apart from the Trade Facilitation Agreement in 2017. Also, of course, international trade has been majorly affected by the coronavirus pandemic, fuelling a recession that is going to affect us for years. Harvard Economics Professor Kenneth Rogoff writes in an article, “the short-term collapse in global output now underway already seems likely to rival or exceed that of any recession in the last 150 years.”
The WTO has had to grapple with massive dislocations in international trade brought about by the pandemic. The organisation needs to be revamped and Dr Okonjo-Iweala, with her passion for trade and promise for proactive leadership could very well be the guiding force that the WTO desperately needs. The world is in turmoil right now, with the pandemic being a major contributing factor. In a July 2020 interview for The Africa Report, Okonjo-Iweala said that “multilateralism has never been needed more than now…A multilateral trading system is one that can produce results for all, win-win solutions. And the WTO is squarely at the centre of that.” With the right leadership, the WTO can reinforce its relevance to the world, by fostering transparency and predictability, reducing trade tensions, and by helping to promote growth and development for all.
Aarshi Tirkey is Junior Fellow, and Kripa Anand a Research Intern with ORF.
Observer Research Foundation