Ngozi Okonjo-Iweala says Washington and Beijing have a mutual interest in repairing the broken global trading system
By SIMON MARKS and JAKOB HANKE VELA, POLITICO, 06/13/2020
Nigeria’s nominee to become global trade chief is casting herself as the peacemaker who can push the U.S. and China to find common ground and resurrect the moribund World Trade Organization.
Ngozi Okonjo-Iweala, a former No. 2 at the World Bank who is now heading a vaccine alliance in poor nations, has established herself as an early frontrunner in the race to become next director general of the WTO — a position that should ideally be filled by September.
Her game-changing entry into the contest comes in contrast to the slow start of EU trade chief Phil Hogan. The Irishman had an unexpectedly bumpy opening to his WTO campaign after the U.S. and several European countries this week said that they would consider backing a candidate from a developing country.
In an interview with POLITICO, Okonjo-Iweala, who also sits on the board of Twitter, said she would be the listener-in-chief and “objective arbiter” who could convince Beijing and Washington that it was in their mutual interest to get the WTO running again.
The WTO is currently paralyzed. Washington accuses of the Geneva-based body of being too soft on China and is calling for root-and-branch reform. In the meantime, it has blocked the appointment of judges to the WTO’s Appellate Body, the top global court for trade disputes, effectively bringing the WTO system to a halt.
“The U.S. and China are the two largest economies in the world. I know that they both believe in trade … Both China and the U.S. have an interest in seeing the WTO go on. But they want people to listen, they want someone who can listen carefully to what their issues are, what is it they want to see improved in the WTO,” Okonjo-Iweala said.
In remarks that will play well in Washington, she accepted that sweeping reform was needed and also hinted that she was willing to engage with the all-important debate over China’s status as a “developing country” at the WTO.
China’s insistence that it is entitled to the plum trading benefits afforded to a “developing country” is a red rag to U.S. President Donald Trump, and Okonjo-Iweala acknowledged there was a gulf to address between what richer and poorer developing nations were getting out of the globalized trading system.
“The developed country members feel they have borne the burden of liberalization and maybe the advanced developing countries should bear more. The least developed countries feel they could benefit more from the system,” she said.
More broadly, she argued that the WTO had failed to keep up with the times. “The WTO needs to be brought up to the 21st century. Some of the rules are outdated and they don’t reflect the significant developments in the global economy. Issues such as the digital economy, competition policy, investment, climate change and environment, they all need to be addressed.”
She stressed that her experience from two stints as Nigeria’s finance minister had given her the political skills to broker big trade-offs in Geneva. She also argued her background as a development economist convinced her of the value of trade — as opposed to aid — as a way of lifting countries out of poverty.
She is by no means guaranteed a smooth path to Geneva, however. Her most immediate challenge is that Africa is not fully united behind her. Egypt insists that its technocrat candidate Hamid Mamdouh should be considered the official nominee for the African Union.
The appointment of a WTO chief comes down to a giant haggle for consensus in Geneva, so it’s a considerable advantage to have a united regional camp behind a candidate from the outset.
While sidestepping the opposition from Egypt, Okonjo-Iweala suggested that Nigeria’s goals ultimately aligned with Africa’s more widely. “With respect to the AU, what the AU wants is what my country wants … Nigeria is trying to put its best foot forward and I believe that the AU wants the best candidate that can do the best to bring the job to Africa.”
Another of her challenges has been resistance from some European countries that fear an African WTO boss would be keen to take on the EU, the world’s biggest trade bloc, over its lavish agricultural subsidies.
When asked about this, however, she did not confront the farm payments directly but said that her goal was to represent all members, including the EU. She stressed that “African countries obviously want to strengthen themselves so they can develop and they want to develop through trade, and through production more than through aid” but highlighted regional trade agreements rather than any push to slash European farm subsidies.
“So what is it that we can look at within the WTO and the world trading system that can strengthen and benefit African countries? They’ve just negotiated the African Continental Free Trade Agreement, which is a milestone.”
Indeed, there are increasing signs that the Harvard-educated economist is already taken very seriously as a candidate in the EU and the U.S.
Despite European Trade Commissioner Hogan saying that he is exploring his own candidacy, several leading EU countries have said that they are keeping their options open.
At a meeting of EU trade ministers this week, Hogan sought to rally European countries behind him, publicly announcing that he was “exploring” a bid. In a statement opening the meeting, Hogan argued team Europe should put forward its own “EU candidate.”
But the ministers from both France and the Netherlands were decidedly lukewarm, saying Europe should keep open the option of backing a non-EU candidate. “We don’t necessarily want to search outside the EU, but we shouldn’t close that door yet either,” said Dutch Trade Minister Sigrid Kaag.
A diplomat from another Western European country went even further and said: “We specifically said that we should be open to African candidates given the EU’s renewed attention for Africa and the fact that they never held the post.” A senior French official also described Okonjo-Iweala as a “good candidate.”
In a final setback after the ministerial meeting, Hogan had told reporters that he had discussed his potential candidacy with U.S. Trade Representative Robert Lighthizer. “I can confirm that we had a conversation about this some time ago,” Hogan said. “Ambassador Lighthizer is very much of the view that a developed country should assume the responsibility of the director general of the WTO,” Hogan added.
But, a few hours later, his American counterpart contradicted him — in a way that kept the door very much open for an African to run. “Ambassador Lighthizer does not support any candidate at this time, nor does he feel that a candidate must necessarily be from a developed country,” said Lighthizer’s spokesman Jeff Emerson.
When asked whether she had discussions with the U.S. trade camp herself, Okonjo-Iweala said: “I will begin to reach out and hopefully reach out to the necessary people, I haven’t done that yet.”
Barbara Moens contributed reporting
