Today I review some other press articles about the candidates to provide additional perspective on important issues or the candidate’s approach to the position of Director-General if selected. Yesterday, I posted material about Amb. Tudor Ulianovschi (Modolva), the day before on Mr. Abdel-Hamid Mamdouh (Egypt), on September 1 on Dr. Ngozi Okonjo-Iweala (Nigeria) and on August 31 on Dr. Jesus Seade Kuri. See September 3, 2020, Race for WTO Director-General – additional material on Amb. Tudor Ulianovschi (Moldova), https://currentthoughtsontrade.com/2020/09/03/race-for-wto-director-general-additional-material-on-amb-tudor-ulianovschi-moldova/; September 2, 2020, Race for WTO Director-General – additional material on Mr. Abdel-Hamid Mamdouh (Egypt), https://currentthoughtsontrade.com/2020/09/02/race-for-wto-director-general-additional-material-on-mr-abdel-hamid-mamdouh-egypt/; September 1, 2020, Race for WTO Director-General – additional material on Dr. Ngozi Okonjo-Iweala (Nigeria), https://currentthoughtsontrade.com/2020/09/01/race-for-wto-director-general-additional-material-on-dr-ngozi-okonjo-iweala-nigeria/; August 31, 2020, Race for WTO Director-General – additional material on Dr. Jesus Seade Kuri (Mexico), https://currentthoughtsontrade.com/2020/08/31/race-for-wto-director-general-additional-material-on-dr-jesus-seade-kuri-mexico/.
There is no intention on my part to be exhaustive, and the research has been limited to press pieces or videos in English. Rather the intention is to identify information not addressed in my earlier posts that may be of interest to readers.
Today’s post looks at a few articles featuring H.E. Yoo Myung-hee from the Republic of Korea, the fifth candidate nominated.
- Hankyoreh, August 9, 2020, S. Korea’s candidate for WTO director-general emphasizes reform, http://english.hani.co.kr/arti/english_edition/e_international/957072.html.
“Speaking with reporters at the Government Complex in Sejong on Aug. 6, Yoo provided an explanation on the current situation with the director-general election.
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“’What I detected from my conversations with dozens of ministers is that many countries are feeling disappointed and frustrated with the WTO’s inability to do its job. They all agreed that there need to be reforms to restore the WTO’s functions in terms of negotiations, disputes, and implementation,’ Yoo said. Regarding the methods of carrying out WTO reforms, she said she planned to ‘hold discussions involving several different approaches,’ noting that there were ‘large differences of opinion among member countries on the role and authority of the Appellate Body.’
“Yoo also stressed that the WTO ‘will need to guarantee free movements of products and services, particularly in the event of another future crisis like the COVID-19 pandemic, while ensuring that [such a crisis] is not abused as an opportunity for applying protective trade measures.’”
2. Inside U.S. Trade’s World Trade Online, August 5, 2020, Korea’s DG candidate on retoling the WTO: ‘Success breeds success,’ https://insidetrade.com/daily-news/korea%E2%80%99s-dg-candidate-retooling-wto-%E2%80%98success-breeds-success%E2%80%99.
As part of Inside U.S. Trade’s series of interviews with each of the eight candidates, Minister Yoo was interviewed in early August. In the August 5 write-up by the publication on the interview, Minister Yoo covered both her experience as a trade negotiator and her ability to close deals as strengths in her candidacy and stressed that achieving some successes at the next WTO Ministerial Conference was crucial to permit the organization to move forward and rebuild trust and be able to address the larger reform issues before the WTO.
Restoring the negotiating function is key to progress, to helping major members like the U.S. and China see that their concerns can be handled through the WTO and would take pressure off of the dispute settlement system.
On dispute settlement, all Members want an effective system, but there are wide differences on what that means. Minister Yoo would urge engagement by Members, outreach to capitals to encourage political will, and perhaps outside input for novel possible solutions.
3. Chatham House, 25 August 2020, In Conversation with Minister Yoo Myung-Hee: Candidate for Director-General of the World Trade Organization, https://www.chathamhouse.org/file/conversation-minister-yoo-myung-hee-candidate-director-general-world-trade-organization; https://www.youtube.com/watch?reload=9&v=8ebGAH4MYOM.
The webinar was part of Chatham House’s series talking to each candidate for the Director-General post. The event was an “on-the-record” event. Below are my notes on some of the questions posed to Minister Yoo and her responses
Q: Tell us about your overarching view of international trade?
A: Minister Yoo stated that trade has been the engine for global economic growth and has contributed to a very large reduction of poverty. Trade is a means not an end. Since 1995 trade has increased from $5.2 trillion to over $19 trillion in 2018 with a significant reduction in global poverty occurring during the same time. But the trading system must adapt, change and evolve. The world has seen slowing economic growth, rising protectionism, and in the last year the emergence of the COVID-19 pandemic. Global trade contracted last year for 1st time since the 2008-2009 financial crisis and will do so again this year. At the same time, there has been concern among some as trade is affecting more aspects of our lives than ever before.
Minister Yoo believes that in a rapidly changing world, the WTO has not been able to pull its weight. The WTO has struggled with all three pillars of the system – negotiations, transparency, dispute settlement. She states that the WTO needs to come out of the crisis stronger than before. To do that, Minister Yoo believes the next Director-General must work with Members to achieve what she describes as her three Rs – relevance, resilience and responsiveness. First, the WTO must be relevant. To do that, the WTO rule book must evolve with the changing realities of 21st century trade. It is critical that the WTO reenergize its negotiating function and restore the two-tier dispute settlement system. Second, the WTO must be resilient. The WTO must address the needs of countries who haven’t gotten many benefits from WTO membership. Third, the WTO must be responsive to future emergencies. In times of crisis, like the current COVID-19 pandemic, the WTO must be there to ensure stability and predictability. Historically, in times of crisis, world collaboration has emerged to help the world move forward. This was true at the end of World War II with the creation of the Bretton Woods organizations and during the 2008-2009 financial crisis with the emergence of the G20. So the current COVID-19 crisis could be an opportunity to move the global trading system forward.
Q: The U.S. led the Bretton Woods efforts, but today the U.S. is skeptical of global collaboration. How can the WTO foster the role of global engagement?
A: The U.S. has shown continuing interest in the multilateral trading system as can be seen from their various proposals for WTO reform and their extensive materials on dispute settlement. But over the last 25 years, there have been no major trade agreements at the WTO other than trade facilitation. This lack of ability to update the rule book has led to frustration and loss of trust in the WTO not just by the U.S. but by others as well. So we need to use this moment to reform the WTO to revitalize the system. Such revitalization could provide an important reason for countries to handle problems through the WTO rather than outside of the system. Minister Yoo, based on her conversations with trade ministers around the world and ambassadors in Geneva, sees the same frustration with the WTO from many Members. However, Members are committed to the multilateral system. COVID-19 provides an impetus for taking action. Minister Yoo believes that the WTO needs successes. The WTO needs to go step by step; success will spur success and permit addressing larger issues over time.
Q: You mentioned the slowing down of the global economy and the COVID-19 pandemic. What role should the WTO play in COVID-19?
A: Minister Yoo believes that the WTO can and should play many roles. COVID-19 is both a health crisis and an economic crisis. First, the WTO can enhance transparency of trade restrictive measures adopted and ensure that such measures are consistent with WTO obligations (e.g., targeted, temporary). Second, the WTO needs to ensure the free flow of goods and services (during the pandemic this is basically medical and agricultural goods and services). The WTO should review its rules to ensure that in a future crisis, the WTO can in fact ensure stability and predictability in the trade arena. Third, the WTO can work with other multinational organizations to overcome both the health and the economic crises. On the health crisis, the WTO should work with the WHO and other organizations dealing with availability and affordability of medical goods, on the promotion of R&D so we can have vaccines and therapeutics and so that there can be equitable and affordable availability to the people of the world. On the economic crisis, the WTO should work with IMF, the World Bank, regional development banks and others to reduce the damage caused by the pandemic and to promote a quick recovery and build back better. For vulnerable economies (and sectors within economies), there is likely ongoing needs for assistance from the WTO and other organizations to weather the pandemic. Minister Yoo believes that there are also many other roles that the WTO could play.
Q: There have been growing trade tensions between the U.S. and China, but specifically when it comes to industrial subsidies, S&D in the WTO, what role should WTO take to reduce tensions.
A: In Minister Yoo’s view, the WTO must revitalize the multilateral trading system. This is important to permit countries to handle trade issues within the WTO versus taking action outside of the system. On bilateral issues, such as industrial subsidies, the WTO should look at the spillover effects of such policies on other WTO Members and examine the existing rule book. If rules address the specific problem, then the issue may be enforcement of existing obligations. But if rules are unclear or don’t cover the policy involved, then Members need to be open to revising existing agreements or adopting new agreements consistent with basic principles of the WTO (e.g., fair competition). While this is a member-driven organization, the Director-General plays the role of facilitator.
Q: On WTO dispute settlement, what needs to be changed?
A: Restoring a functioning dispute settlement system is a top priority issue for the next Director-General. Why is there the current impasse at the WTO on the Appellate Body? Minister Yoo believes that the impasse flows from longstanding different views of Members on the role of dispute settlement. Some are concerned that the Appellate Body is creating rights or obligations — that is overreaching their authority — contrary to the limits in the Dispute Settlement Understanding. Other Members say that the Appellate Body’s actions are necessary as the Appellate Body is tasked with finding a positive resolution to a case and that may lead to interpretations of gaps or silence or ambiguous language. Minister Yoo believes that the lack of progress in negotiations may have led Members to overly rely on dispute settlement for issues that could have been resolved through negotiations. Still, based on her extensive discussions with ministers and ambassadors, Minister Yoo understands that Members share the value of having an effective dispute settlement system. There are some proposals for reform before the WTO. The Walker proposal addresses some suggestions on procedural and some substantive issues. US has put forward their views on the problems. But, as said before, there are very fundamental differences in the views of Members. Minister Yoo believes that the next WTO Director-General needs to put all proposals on the table and have Members engage in discussions. She believes that outreach to capitals will also be necessary to secure Members’ buy-in to resolving the current impasse.
Q: What should WTO do to address the environmental crisis (e.g., coordinate carbon taxes)?
A; COVID-19 has put a focus on the need for sustainable development. The pandemic could wipe out economic progress over the last decade. Thus, it is important to pursue sustainable development. The question is how to achieve sustainable development in trade, or how to operationalize sustainable development goals in trade? Minister Yoo started by reviewing what the WTO is currently doing. She noted that the fisheries subsidies negotiations are ongoing. A conclusion of the negotiations would advance sustainable development goals. Similarly, the WTO has had a Committee on Trade and Environment. WTO Members and the next Director-General should look at the Committee’s agenda and see if Members are open to updating the agenda. Finally, there used to be negotiations to liberalize trade in environmental goods. Hopefully, such negotiations can be resumed.
As to anti-carbon measures, Minister Yoo understands that the objective is to reduce carbon gases It is important that trade agreements and environmental agreements be able to work together. Some countries have expressed concerns about environmental objectives being applied to discriminate against trade from certain countries. Minister Yoo states that it is important that any such measures be done on a nondiscriminatory basis. If selected as the next Director-General, Minister Yoo hopes to help Members to find mutually acceptable solutions on these matters.
Q: On developed and developing countries, should there be different obligations in the environmental area?
A: WTO Members understand that developing countries may need additional policy space when adopting various agreements. So during negotiations, it is often the case that Members adopt flexibilities for developing and least developing countries. In trade negotiations, Members negotiate those flexibilities. The key in Minister Yoo’s view is to focus on the actual needs of Members. Those needs may be longer implementation periods, the need for technical assistance, the need for capacity building, etc. The WTO should be able to provide technical assistance and capacity building where needed.
Q: Currency in U.S.-China trade affects the value of other currencies in Asia and elsewhere. How can you deal with these trade tensions?
A: In many areas, there are tensions between U.S. and China. At the WTO, Members can deal with trade-related tensions. The WTO can provide a meaningful platform to address trade-related issues. The WTO has not fully addressed currency issues as curency is largely in the IMF’s area of expertise. Minister Yoo noted that the WTO has received no official proposal to address currency at the WTO. It is an issue that can be addressed in some trade remedy cases. But there is limited actual case law, so it is too early to consider the issue at the WTO. On other issues, WTO can be part of the solution through both dispute settlement and by updating the rule book. The WTO should provide a platform for the U.S. and China to address trade issues between them. This could permit building up new rules. Even small successes between the Members would permit addressing larger issues.
Q: WTO must be able to deal with state capitalism. Is there an inevitability of increased tension?
A: On state capitalism, rather than addressing the economic model itself, the WTO should look at specific government policies since those can have spillover effects on other countries. If the policies have negative effects on trade that are inconsistent with WTO principles, then WTO Members should review the rule book and see if Members need to be updated existing rules or if new rules are needed or if the question is simply enforcement of existing rules.
Each candidate has been very busy these last several months meeting with WTO Members both in Geneva and in capital (whether in person or virtually), talking to the media, doing events with academia and think tanks and others. The above additional materials on Minister Yoo are a small sample of what is available online. The excerpts or summaries from the various publications have largely been limited to some of the key issues my previous posts have examined (appellate body reform, industrial subsidies, etc.) or discussions of other issues of potential interest.
Future posts will look at additional materials for other candidates.