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WTO leadership dilemma, options before the global trade body

By on October 30, 2020 0 150 Views

By Oludare Mayowa with agency report

History may be repeating itself in the process leading to the selection and appointment of a new Director-General for the World Trade Organisation (WTO).

Despite the overwhelming support for the candidate nominated by Nigeria, Ngozi Okonjo-Iweala to become the next DG of the world trade mediation body, the United States representative objections to Okonjo-Iweala selection and support for her main challenger, South Korean Trade Minister Yoo Myung-hee has disabled the entire process.

Though, it would not be the first time the WTO has faced a roadblock over its leadership. In the past, it found ways around them.

In 1999, two candidates divided WTO members, with a compromise finally found to give each a term. New rules were then put in place to avoid a repeat.

Former New Zealand prime minister Mike Moore and Thailand’s Supachai Panitchpakdi divided WTO members, with a compromise finally found to give each a term, shortened to three years from four.

Candidates least likely to attract a consensus “shall withdraw”, the 2003 rules say, with a vote to be taken “as a last resort”. Korea’s Yoo could withdraw, but her team did not respond on Thursday to questions about her future intentions.

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Now faced with a veto from the United States, the global trade body has two unpalatable options for selecting its next leader – override its biggest paymaster with a vote or hope for a change of U.S. president and wait until he takes charge.

Even if Trump loses the election, he will remain in office until Jan. 20, inauguration day, making any early resolution even less likely.

Rufus Yerxa, a former senior U.S. trade official who now heads the National Foreign Trade Council, said the result of the U.S. election would be decisive.

“For the people in Geneva that are trying to make this decision, the election will determine if they’re going to be in another showdown fight… or whether they can afford to wait him out and deal with the Biden administration,” he said.

One senior U.S. trade official said that if Democratic challenger Joe Biden won, WTO members would be well-advised to hold off until he took office. Biden, he added, would be anxious to “get off on the right foot” with the WTO.

The other option before the WTO in choosing its DG is to revert to the solution reached in 1999 by split the term or tenure between the two top contenders, Okonjo-Iweala and Myung-hee so as to reduce tension and as a form of compromise.

This, however, may not be as easy as it appears on the surface as the rule made in 2003 says candidates least likely to attract a consensus “shall withdraw,” with a vote to be taken “as a last resort.”

But with the US backing of the South Korean candidate, it also appears that the 2003 rules may likely be jettisoned.

Korea’s Yoo could withdraw, but her team did not respond on Thursday to questions about her future intentions.

The United States has already disabled the WTO’s role as a global trade arbiter by blocking appointments to its Appellate Body, which acts as a supreme court of trade. Could it manage further months without a leader?

Like it is said in the diplomatic circle, A vote may appear an easy fix, but is more a nuclear option.

Simon Evenett, trade professor at the Switzerland’s University of St Gallen, said large WTO members would see this as an unwelcome precedent.

“Big players like subtle vetos. Publicly losing a vote is humiliating,” he said.

Washington might see recourse to a vote almost as an act of war and an excuse to make good Trump’s threat to quit the WTO. It is not even clear how WTO members would decide to hold a vote.

This leaves a final possibility, relying on a change of U.S. president.

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