The next Director-General of the WTO — USTR Lighthizer’s comments to the Financial Times

In an article in today’s Financial Times, Ambassador Robert Lighthizer, the outgoing U.S. Trade Representative, is reported as panning Dr. Ngozi Okonjo-Iweala for the position of Director-General of the World Trade Organization on the basis that she has no trade experience. Financial Times, Outgoing US trade chief says leading WTO candidate lacks experience, January 19, 2021, https://www.ft.com/content/baca66bb-5987-47e1-861d-3375a6f6d01b. The key quotes from Amb. Lighthizer in the article are copied below.

“’We need a person who actually knows trade, not somebody from the World Bank who does
development,’ said Mr Lighthizer, referring to Ms Okonjo-Iweala’s credentials.

“”We need a trade person with real trade experience,’ he added. “’And there are very few areas
where you would say, ‘here’s an organisation in very bad shape, let’s get someone who knows
nothing about its core mission’.’”

An early issue for the Biden Administration in its trade agenda will be whether the U.S. withdraws its refusal to join the consensus to appoint Dr. Okonjo-Iweala of Nigeria as the next Director-General. In an earlier post, I have indicated that such an action by the Biden Administration early in its term would be desirable. Without a Director-General, it is hard to imagine the WTO making progress on WTO reform. See, e.g., December 12, 2020, The Incoming Biden Administration and International Trade – Katherine Tai, nominee for U.S. Trade Representative, https://currentthoughtsontrade.com/2020/12/12/the-incoming-biden-administration-and-international-trade-katherine-tai-nominee-for-u-s-trade-representative/ (“On the World Trade Organization, the Biden Administration will have a potentially full docket but some important issues for early consideration. The first issue where an early action is important is who should be the next Director-General. The Trump Administration has indicated it did not agree to join a consensus on the candidate for the Director-General position who is the candidate with broadest and deepest support, Dr. Ngozi Okonjo-Iweala of Nigeria. Procedures adopted by the General Council in 2002 for selecting Directors-General was followed this year. The Chair of the General Council indicated he was prepared to recommend Dr. Okonjo to the General Council back in early November but has not done so in light of the U.S. position. Both Dr. Okonjo and Minister Yoo of Korea are well qualified candidates. While the Trump Administration may prefer Minister Yoo, in this writer’s view, either candidate will do an excellent job. U.S. refusal to join a consensus is contrary to procedures the U.S. and others agreed to. Because of the U.S. position and the failure of the Korean candidate to withdraw from the process, the WTO continues to operate without a new Director-General. The incoming Biden Administration should communicate with Korea that it intends to indicate the U.S. will join the consensus and then notify the Chair of the General Council. This can and should be done as quickly as possible by the Biden Administration to permit the WTO to get a new Director-General in place early in 2021.”).

While Dr. Okonjo-Iweala has argued that she has some trade experience, referring to the Nigerian customs service being under her jurisdiction when she was Finance Minister and having had some role apparently in Nigeria’s Trade Facilitation Agreement activities, there is little doubt that her background at the World Bank and in the Nigerian government were largely non-trade in nature. In comparison the Korea Trade Minister’s entire career in government has been in trade. So if deep trade experience is critical to performing the function of Director-General at the WTO, then someone other than Dr. Okonjo-Iweala would have been the logical choice for the membership. With the exception of the U.S. under Trump, Members do not have that concern about the qualifications of the next Director-General.

Indeed, deep trade experience has not been a requirement of former Directors-General nor of former senior trade officials in major countries. Peter Sutherland, who was brought in to complete the Uruguay Round in 1993, was not a trade person but rather had a background in banking and had been a prior EC Commissioner of Competition Policy. See Peter Sutherland, GATT and WTO Director-General, 1993 to 1995, https://www.wto.org/english/thewto_e/dg_e/ps_e.htm. Other Directors-General of the GATT and WTO had limited trade backgrounds. See, e.g., Supachai Panitchpakdi, WTO Director-General, 2002-2005, https://www.wto.org/english/thewto_e/dg_e/sp_e.htm. The view that individuals with political, diplomatic and other skills can step into an important trade function is not unique to the WTO. National governments, including the United States, often have trade ministries headed by people with little or no trade background prior to the individual’s appointment. Prior U.S. Trade Representatives Robert Strauss (1977-79), Michael Kantor (1993-96) and Ronald Kirk (2009-2013) would be examples. And at least some former U.S. Trade Representatives don’t view prior trade experience as critical to being an effective Director-General. See WITA, WITA Webinar: Three Former USTRs on the WTO in a Time of Change, 07/16/2020, https://www.wita.org/event-videos/wita-webinar-three-former-ustrs-on-the-wto-in-a-time-of-change (former USTRs Froman and Schwab). Dr. Ngozi Okonjo-Iweala has political and diplomatic stature and significant career accomplishments that make her an extremely well qualified candidate to be the next Director-General of the WTO regardless of the depth of her trade background.

Thus, while it has obviously been the Trump Administration’s view that a trade background is critical for the next Director-General, it is to be hoped that the incoming Biden Administration will take a different view, permit a consensus to be formed and let the WTO get back to having a Director-General and move towards much needed WTO reform on issues that the Trump Administration ably laid out as critical (dispute settlement, convergence vs. coexistence of different economic systems (and reforms of rules to address distortions flowing from non-market economic systems), role of Special and Differential Treatment, transparency, and addressing of critical issues like e-commerce, fisheries subsidies, etc.