WTO, Ngozi Okonjo-Iweala And Global Expectations

Image result for WTO, Ngozi Okonjo-Iweala And Global Expectations

The election of Nigeria’s Ngozi Okonjo-Iweala as the first female leader of the World Trade Organization, WTO, has attracted global reactions as organizations and countries set agenda for her, reports Yemisi Izuor

Nigeria’s Ngozi Okonjo-Iweala was selected by consensus to be the next director-general of the World Trade Organization at a closed-door meeting on Monday.

All members of the WTO’s top decision-making body, the General Council, agreed on her appointment in a virtual meeting which had just one agenda item, they said.

The WTO subsequently confirmed the choice.

Okonjo-Iweala was appointed as the director-general by representatives of the 164 member countries in a closed-door meeting.

With the selection and confirmation she has become the first woman to head the World Trade Organization after being voted in as the new general-secretary during a closed-door meeting.

Her emergence was made possible after US President Joe Biden previously endorsed her nomination, pointing to greater cooperation in international policy.

“WTO members have just agreed to appoint Dr. Ngozi Okonjo-Iweala as the next Director-General of the WTO.  The decision was taken at a special meeting today of the organization’s General Council. Dr. Okonjo-Iweala will become the first woman and the first African to head the WTO,” the WTO said in a statement.

Okonjo-Iweala will take office from 1 March 2021 to 31 August 2025. The term, however, can be renewed, according to the organisation.

The 66-year-old Nigerian-American economist previously served at the World Bank for around 25 years.

Okonjo-Iweala has also recently appointed a special envoy of African’s Union to supervise and mobilise the continent’s effort to meet economic challenges linked to the ongoing coronavirus pandemic.

The former Nigerian Finance Minister first campaigned to head the WTO in 2012.

In 2020, she even managed to gain the support of the other member states, with her competition – Korean Trade Minister Yoo Myung-hee – withdrawing from the race. However, Okonjo-Iweala’s nomination was blocked by the US in October 2020.

An economist by profession, Ngozi Okonjo-Iweala was appointed Monday to head the World Trade Organization, becoming the first woman and first African to take on the role amid rising protectionism and disagreement over how the body decides cases involving billions in sales and thousands of jobs.

She said during an online news conference that she was taking over at a time when the WTO “is facing so many challenges, and it’s clear to me that deep and wide-ranging reforms are needed, it cannot be business as usual.”

Her first priority would be quickly addressing the economic and health consequences of the COVID-19 pandemic, such as by lifting export restrictions on supplies and vaccines and encouraging the manufacturing of vaccines in more countries.

Other big tasks include reforming the organization’s dispute resolution process and finding ways for trade rules to deal with change such as digitalization and e-commerce.

She takes over after four turbulent years in which U.S. President Donald Trump used new tariffs, or import taxes, against China and the European Union to push his America first trade agenda.

“It will not be easy because we also have the issue of lack of trust among members which has built up over time, not just among the U.S. and China and the U.S. and the EU but also between developing and developed country members, and we need to work through that,” she said.

She said that as the first woman and first African to hold the post, “I absolutely do feel an additional burden, I can’t lie about that. Being the first woman and the first African means that one really has to perform.”

“All credit to members for electing me and making that history, but the bottom line is that if I want to really make Africa and women proud I have to produce results, and that’s where my mind is at now.”

The appointment, which takes effect March 1, came after U.S. President Joe Biden endorsed her candidacy, which had been blocked by Trump. Biden’s move was a step toward his aim of supporting cooperative approaches to international problems after Trump’s go-it-alone approach that launched multiple trade disputes.

But unblocking the appointment is only the start in dealing with U.S. concerns about the WTO that date to the Obama administration. The United States had blocked the appointment of new judges to the WTO’s appellate body, essentially freezing its ability to resolve extended and complex trade disputes.

The U.S. government has argued that the trade organization is slow-moving and bureaucratic, ill-equipped to handle the problems posed by China’s state-dominated economy and unduly restrictive on U.S. attempts to impose sanctions on countries that unfairly subsidize their companies or export at unusually low prices.

Okonjo-Iweala has been Nigeria’s finance minister and, briefly, foreign minister, and had a 25-year career at the World Bank as an advocate for economic growth and development in poorer countries.

She rose to the No. 2 position of managing director, where she oversaw $81 billion in development financing in Africa, South Asia, Europe and Central Asia. In 2012 she made an unsuccessful bid for the top post with the backing of African and other developing countries, challenging the traditional practice that the World Bank is always headed by an American.

She has a bachelor’s degree in economics from Harvard University and a Ph.D. in regional economics and development from the Massachusetts Institute of Technology.

South Korean trade minister Yoo Myung-hee had withdrawn her candidacy, leaving Okonjo-Iweala as the only choice. Her predecessor, Roberto Azevedo, stepped down August 31, a year before his term expired.

Trump repeatedly accused the WTO of unfair treatment of the U.S., started a trade war with China in defiance of the WTO system, and threatened to pull the U.S. out of the trade body altogether. Trump also imposed 25% steel and aluminum tariffs that hit European allies on national security grounds, a justification that went beyond trade measures normally used within the WTO rules framework.

So far, Biden has not said whether the U.S. will unblock the appellate appointments, and he has not withdrawn the steel tariffs either, which are backed by industry and union groups.

Chad P. Bown, senior fellow at the Peterson Institute for International Economics, said unblocking Okonjo-Iweala’s appointment was “a very good first step” in re-engaging with the WTO, “but that’s the easy one. The rest are hard.”, according to report by AP.

In particular, the WTO faces “a ticking time bomb” in the form of other countries’ challenges to Trump’s use of national security as a justification for imposing tariffs, a little-used provision in U.S. law rejected by key US trading partners in Europe.

Bown said any decision would be a lose-lose dilemma for the WTO. Ruling against Trump’s move could provide a rallying cry for WTO skeptics in the U.S., while a ruling in favor could lead to other countries using national security justification as well. And that “opens a giant loophole in the trading system whereby all rules are meaningless,” Bown said. Biden’s administration therefore has an incentive to take the dispute off the table before a decision, expected this summer.

“If you’re the Biden administration what you want to do is settle this thing, so you don’t put the WTO in this awkward position,” Bown said.

WHAT CHINA SAID

Chinese government in reaction congratulated Dr. Ngozi Okonjo-Iweala after she was appointed director-general of the World Trade Organization (WTO) on Monday.

China also declared it has full confidence in the Nigerian former Finance Minister.

“China has full confidence in Okonjo-Iweala’s appointment as the WTO director-general,” the Ministry of Commerce said in a statement.

As the first woman and the first African to head the WTO; Okonjo-Iweala has long been engaged in poverty reduction in developing countries and work related to vaccine and healthcare. Also, the statement noted that she has rich experiences in managing international organizations; adding that her appointment meets the expectation of all.

Despite COVID-19 and challenges to multilateral trade system; China says it is fully confident in Okonjo-Iweala serving as the director-general, and hopes the WTO, under her leadership; will resume its normal functions as soon as possible and play a greater role in anti-pandemic cooperation and economic recovery.

China also anticipates that Okonjo-Iweala will help the 12th WTO Ministerial Conference achieve positive results; advance necessary reforms to the WTO, and uphold and strengthen the authority and effectiveness of the multilateral trade system; the statement added.

As a responsible major developing country, China will firmly support the multilateral trade system; take an active part in the WTO reforms and support the work of the director-general, to help the WTO make greater contributions to improving global governance and the well-being of peoples all around the world, it added.

OPEC REACTS

The Organization of Petroleum Exporting Countries, OPEC, also joined the number of organizations and countries to affirm support to Okonjo-Iweala.

OPEC congratulated Okonjo-Iweala, on her appointment as the Director-General of the World Trade Organisation (WTO).

OPEC’s Secretary-General, Dr. Barkindo Mohammad, disclosed this in a congratulatory message in which he said the appointment will bring much desired improvements in the Organization.

LAGOS CHAMBER OF COMMERCE REACTS

The Lagos Chamber of Commerce & Industry also heartily felicitated with Nigeria on the appointment of Dr Ngozi Okonjo-Iweala as the Director General of the World Trade Organization (WTO).

According to Muda Yusuf, the director general of the Chamber, It is a great delight being the First Female and First African to head the WTO since its formation in 1995 [replacing the General Agreements on Tariffs and Trade (GATT), which commenced in 1948].

 

Dr Okonjo-Iweala’s emergence comes at a time when the global trading system is faced with numerous challenges including supply chain disruptions precipitated by the coronavirus pandemic, rising protectionism & unilateralism, growing economic nationalism, imposition of trade restrictions covering substantial amount of international trade, as well as trust and credibility concerns among members.

 

Africa has peculiar challenges in the global trade arena. The continent is deeply integrated into the global supply chain and this underscores the low participation level of African economies in international trade. According to the United Nations Conference on Trade and Development (UNCTAD), Africa’s trade with the global community between 2015 and 2017 stood at an average of $760.1 billion, compared with Asia ($6.8 trn), America ($5.1 trn) and Europe ($4.1trn). These numbers indicate that Africa is not a major player in global trade. As such, it is very pertinent for African economies to build capacity within the continent in order to take advantage of the opportunities in global trade.

 

Nigeria’s share in global trade is even more insignificant. Our export structure is still largely dependent on crude oil, which accounts for about 50% of government revenue and 90% of foreign exchange earnings. More importantly, Nigeria’s non-oil exports are largely primary commodities with little or zero value addition. Thus, the prospects of tapping international trade opportunities remains dim.

LCCI SETS AGENDA

For Nigeria to fully take advantage of the opportunities offered by the World Trade Organization under the leadership of Dr. Okonjo-Iweala, it is imperative to ensure the following:

·        We need to build capacity for international competitiveness of our products and services.

 

·        Also imperative is the need to address trade facilitation issues, especially around port processes, ports infrastructures, international trade documentation, foreign exchange policies, trade policies and industrial policies.

 

·        We need to promote local value addition and backward integration to strengthen competitiveness of our domestic industries.

 

·        We must undertake reforms of our tariff policy in accordance with the principles of comparative advantage, which would enable the country optimise opportunities in the global trade arena and enhance the citizens’ welfare.

 

·        It is critical to develop an AfCFTA strategy that would enable the country leverage trade opportunities both continentally and globally.

 

·        There is need to improve on our strategy in managing the coronavirus pandemic ranging from ensuring compliance to safety protocols to vaccine procurement and distribution.

While the emergence of Dr. Okonjo-Iweala as the new WTO Director-General is very gratifying and calls for celebration, there is a need to manage expectations around the outcomes for the Nigerian economy given the numerous productivity and competitiveness issues the country is grappling with.  Ultimately, these are the factors that would determine the benefits that would accrue to the economy from global trade.

Add Comment