US lifts objections that deadlocked the WTO over its next director-general

‘Troika’ had announced Nigeria’s Ngozi Okonjo-Iweala enjoyed broadest support, but US had refused to join consensus

Blocked? Ngozi Okonjo-Iweala (left) declared with broader support than Yoo Myung-hee | WTO

By Peter Ungphakorn
POSTED OCTOBER 28, 2020 | UPDATED FEBRUARY 15, 2021


On February 15, 2021, Nigerian Ngozi Okonjo-Iweala was confirmed as the World Trade Organization’s next director-general. The decision was by a consensus of the WTO’s membership. See Ngozi Okonjo-Iweala is the new WTO chief, but let’s not get carried away.

This was made possible 10 days earlier when the new Biden administration in the US announced its “strong support” for her, ending three months of deadlock.

By then, South Korean candidate Yoo Myung-hee
withdrew her candidacy. By overturning the stance of the Trump administration and its US Trade Representative, Robert LIghthizer, Biden paved the way for Okonjo-Iweala to be selected by the necessary consensus.

What follows was written before the deadlock was broken.


The United States told ambassadors to the World Trade Organization (WTO) on October 28, 2020, that it could not join a consensus on Ngozi Okonjo-Iweala of Nigeria becoming the organisation’s next director-general, threatening a repeat of a similar deadlock in 1999, the worst crisis in its 25-year history.

Okonjo-Iweala “clearly carried the largest support by Members in the final round and she clearly enjoyed broad support from Members from all levels of development and all geographic regions and has done so throughout the process,” General Council chair David Walker had told the informal meeting of heads of delegations.

His full statement is here.

Walker, who is New Zealand’s ambassador to the WTO, heads the “troika” of three ambassadors consulting members in the search for a consensus nomination.

“I am therefore submitting the name of Ngozi Okonjo-Iweala as the candidate most likely to attract consensus and recommending her appointment by the General Council as the next Director-General of the WTO until 31 August 2024,” he said.

But, “one delegation could not support the candidacy of Dr Ngozi and said they would continue to support South Korean minister Yoo. That delegation was the United States of America,” WTO spokesperson Keith Rockwell told reporters afterwards (see the second half of this WTO video or look for it in the archive).

“There will be a General Council meeting on November 9, at which we hope to take a decision on this very important matter,” he said.

(However, on November 6 — with Geneva back in semi-lockdown because of COVID-19 and the US elections still undergoing prolonged counting and potential legal challenge — Walker told WTO members that the next General Council meeting would be postponed until further notice.

(“It has come to my attention that for reasons including the health situation and current events, delegations will not be in a position to take a formal decision on November 9,” he wrote.)

The October 28 meeting was informal and called at short notice, so no decision was possible. That has to be taken in a formal meeting of the General Council — the highest decision-making body in between biennial ministerial conferences —with 10 days advance notice of the agenda.

Until the General Council meets again, consultations will continue in an attempt to avoid a deadlock.

Rockwell said: “They said that she had by a wide margin the most preference, that she had wide support across regions, and across levels of development. They said that she had had these since the very beginning of the process.”

He added: “There was a huge amount of support for the troika, for the process that they’ve run.”

If confirmed, Okonjo-Iweala would be the first woman and first African to head the WTO.

SEE:
New WTO head’s first statements sail close to the wind
Ngozi Okonjo-Iweala is the new WTO chief, but let’s not get carried away
Is the WTO choosing a saviour? Or a butler?

The troika of ambassadors are Walker, Dacio Castillo of Honduras (Dispute Settlement Body chair) and Iceland’s Harald Aspelund (Trade Policy Review Body chair). All three bodies are at the same top level in the WTO’s hierarchy of councils and committees, and all three comprise the full WTO membership of 164.

It seems likely that they knew the US would object. But they decided to make their announcement anyway, concentrating on the “breadth of support” side of their task of assessing which candidate was most likely to attract consensus. They left the US to state its own dissent publicly in the meeting.

In the 1999 crisis, the General Council chair at that time announced results that included “strength of opposition” among the criteria, as well as support. This put the ambassador in conflict with about half of the membership.

This time, Walker and his colleagues have avoided that.

Troika of chairs: from left, Aspelund, Walker, Castillo | WTO
Troika of chairs: from left, Aspelund, Walker, Castillo | WTO
Smooth until …

Up to now the process had been smooth. The original eight candidates were reduced to five on September 18 at the end of the first round of consultations, and then to two on October 8, leaving Okonjo-Iweala and South Korean Trade Minister Yoo Myung-hee.

Walker said delegations had been asked to name their four favourite candidates in the first round, two in the second and one in the third.

The WTO’s leadership has been in hiatus for over five months, since Roberto Azvêdeo announced on May 17 that he would leave office a year early (on August 31). Campaigning began when nominations opened on July 8.

On August 19, Pepsico announced Azevêdo was to be its new Executive Vice President and Chief Corporate Affairs Officer.

The reasons behind the US’s threat to block a consensus are unclear.

The Office of the US Trade Representative issued a statement on October 28 stating only:

“The United States supports the selection of Korean Trade Minister Yoo Myung-hee as the next WTO Director-General. Minister Yoo is a bona fide trade expert who has distinguished herself during a 25-year career as a successful trade negotiator and trade policy maker. She has all the skills necessary to be an effective leader of the organization.

“This is a very difficult time for the WTO and international trade. There have been no multilateral tariff negotiations in 25 years, the dispute settlement system has gotten out of control, and too few members fulfill basic transparency obligations. The WTO is badly in need of major reform. It must be led by someone with real, hands-on experience in the field.”

Bloomberg reported that US Ambassador Denis Shea objected to the way the selection had been handled. His statement in the meeting has not been published.

Bloomberg also quoted sources close to US Trade Representative Robert Lighthizer saying he considers Okonjo-Iweala to be too close to “pro-trade internationalists” in Washington. This means her experience at organisations such as the World Bank was a negative for the US administration.

But supporting the other candidate is not the same as refusing to join a consensus.

A number of other countries are likely to be backing Yoo without blocking Okonjo-Iweala. The US has taken a major step beyond that by threatening to veto Okonjo-Iweala, extending the WTO’s lack of leadership at least until a new administration is in place after the American elections.

Voting?

The alternative is for members to vote in the General Council. This is allowed under WTO rules of procedure, but has never been used. It was proposed for breaking the 1999 deadlock but a large number of countries opposed it, arguing there was no consensus to vote, effectively blocking a vote.

Experts say General Council chair Walker might have the power to try to force a vote through. But if the US also opposed a vote — which it would probably lose if the troika’s assessment is right — that would put him in direct confrontation with the Americans.

“There is a complex way in which you can vote [but] I think the overwhelming preference of every one of our members is to decide by consensus,” Rockwell said. “And consultations will be held between now and November 9 [the Genera Council meeting subsequently postponed] to try and achieve that consensus.”

In 1999, the WTO’s membership was seriously split over the two remaining candidates: Mike Moore of New Zealand and Supachai Panitchpakdi of Thailand. They eventually agreed to split a six-year term, Moore and Supachai having three years each.

But the rifts damaged relationships among the trade diplomats in Geneva, the ill-feeling contributing to the disastrous WTO ministerial conference in Seattle at the end of the year, when members were in no mood to compromise on launching a new round of multilateral trade negotiations.

And then there was one? Candidates dropped out over three rounds of consultations but will Okonjo-Iweala survive? | WTO and AFP
And then there was one? Candidates dropped out over three rounds of consultations but will Okonjo-Iweala survive? | WTO
Procedures and candidates

As a result, new procedures were adopted in 2002. These have been used in every WTO director-general selection since then, including the present one. They require the “facilitators” (the three ambassadors) to come up with the candidate most likely to be selected by consensus, based on the “breadth” of support.

The WTO has clarified “breadth”:

“During the DG selection processes of 2005 and 2013, breadth of support was defined as ‘the distribution of preferences across geographic regions and among the categories of members generally recognized in WTO provisions: that is [least developed countries], developing countries and developed countries.’ The chair said he and his colleagues were guided by the practices established in these General Council proceedings and he further explained that the decisions made clear that ‘breadth of support means the larger membership’.”

On July 10, Walker announced three phases for selecting the director-general after nominations closed on July 8. The third phase, from September 7, would consist of the three rounds of private consultations between the troika and the membership, gradually eliminating the candidates until one was left. That third round has just ended.

The eight original candidates were:

Withdrawing in round 1, September 18

  • Jesús Seade Kuri , Mexico — an old WTO hand who was one of the first WTO deputy directors-general, currently Mexico’s chief negotiator for the revised NAFTA, the US, Mexico, Canada Agreement (USCMA) and under-secretary for North America
  • Abdel-Hamid Mamdouh , Egypt — a former Egyptian negotiator whose career in the Secretariats of the General Agreement on Tariffs and Trade (GATT), and WTO (which replaced GATT in 1995), saw him become a senior manager and lead expert on services
  • Tudor Ulianovschi , Moldova — former Moldovan foreign minister, and before that ambassador in Geneva where he chaired a number of WTO and UN committees

Withdrawing in round 2, October 8

  • Amina Mohamed , Kenya — current Kenyan minister for sports, heritage and culture and former foreign minister. Well-known in Geneva and WTO circles as a former ambassador to the WTO and General Council chair, and host-chair of the 2015 WTO ministerial conference in Nairobi.
  • Mohammad Maziad Al-Tuwaijri , Saudi Arabia — minister-adviser on economic strategy, former economy and planning minister whose responsibility included interaction with international organisations, former banker and air force pilot.
  • Liam Fox, UK — former UK international trade secretary and before that defence secretary

Round 3

  • Ngozi Okonjo-Iweala , Nigeria — a former Nigerian finance minister and World Bank managing director, currently board chair of GAVI, the global vaccines alliance. Bloomberg recently broke the news that she also holds US citizenship (announced most likely to enjoy consensus, October 28)
  • Yoo Myung-hee , South Korea — current South Korean trade minister and former strategist on free trade agreements, with experience in negotiating the revised Korea-US (KORUS) agreement, east and southeast Asian Regional Comprehensive Economic Partnership (RCEP) and her country’s free trade agreement with China

All information on the selection can be found here:  process in brief; process in detail; news.

Some other reports, analysis

Updates:
February 15, 2021 — updating with confirmation of Okonjo-Iweala’s selection.
February 5, 2021 — updating with the US statement changing its position and Yoo Myung-hee’s withdrawal
November 6, 2020 — adding the announcement that the November 9 General Council meeting would be postponed.
October 29, 2020 — adding Walker’s remarks and full statement; USTR’s statement; more on the procedure; links to other reports; analysis; some minor edits.

Photo credits: WTO

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Author: Peter Ungphakorn

I used to work at the WTO Secretariat (1996–2015), and am now an occasional freelance journalist, focusing mainly on international trade rules, agreements and institutions. (Previously, analysis for AgraEurope.) Trade β Blog is for trialling ideas on trade and any other subject, hence “β”. You can respond by using the contact form on the blog or tweeting @CoppetainPU

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