Biden Administration

Biden Administration throws support behind Dr. Ngozi Okonjo-Iweala for next Director-General of the World Trade Organization

The Office of the United States Trade Represenstative released the following press release on February 5, 2021:

“02/05/2021

“Washington, DC – The United States takes note of today’s decision by the Republic of Korea’s Trade Minister Yoo Myung-hee to withdraw her candidacy for Director General of the World Trade Organization (WTO).

“The Biden-Harris Administration is pleased to express its strong support for the candidacy of Dr. Ngozi Okonjo-Iweala as the next Director General of the WTO.  Dr. Okonjo-Iweala brings a wealth of knowledge in economics and international diplomacy from her 25 years with the World Bank and two terms as Nigerian Finance Minister.  She is widely respected for her effective leadership and has proven experience managing a large international organization with a diverse membership.  

“The Biden-Harris Administration also congratulates Minister Yoo Myung-hee on her strong campaign for this position.  She is a trailblazer as the Republic of Korea’s first female trade minister and the first candidate from Korea to advance this far in the Director General selection process.  The United States respects her decision to withdraw her candidacy from the Director General race to help facilitate a consensus decision at the WTO.

“It is particularly important to underscore that two highly qualified women made it to the final round of consideration for the position of WTO Director General — the first time that any woman has made it to this stage in the history of the institution.  

“The United States stands ready to engage in the next phase of the WTO process for reaching a consensus decision on the WTO Director General.  The Biden-Harris Administration looks forward to working with a new WTO Director General to find paths forward to achieve necessary substantive and procedural reform of the WTO.”

USTR Press Release, Office of the United States Trade Representative Statement on the Director General of the World Trade Organization, February 5, 2021,https://ustr.gov/about-us/policy-offices/press-office/press-releases/2021/february/office-united-states-trade-representative-statement-director-general-world-trade-organization.

As reviewed in a post earlier today, the Chair of the WTO’s General Council can call a General Council meeting at any time to consider his recommendation for the next Director-General. See February 5, 2021, WTO Director-General selection process — withdrawal of Korea’s Trade Minister Yoo important step to consensus behind Nigeria’s Dr. Ngozi Okonjo-Iweala, https://currentthoughtsontrade.com/2021/02/05/wto-director-general-selection-process-withdrawal-of-koreas-trade-minister-yoo-important-step-to-consensus-behind-nigerias-dr-ngozi-okonjo-iweala/.

The combination of the Korean withdrawal of Minister Yoo from the selection process and the U.S. indication that it supports Dr. Ngozi Okonjo-Iweala for the position of Director-General should permit the process to come to a conclusion in the coming week or weeks based on any remaining consultations the Chair of the General Council perceives are warranted before placing Dr. Okonjo-Iweala’s name on the General Council agenda for consideration by the membership. There is a regularly scheduled General Council meeting set for March 1-2, 2021. I would expect that a special session of the General Council could be called as early as next week.

The Biden Administration’s action is consistent with the President’s declared intent to be more active within multilateral institutions and will permit the WTO to move past the selection of the next Director-General to the important issues in front of the organization. Today’s action is an important one to help the WTO look at the major pending issues and the need for major reform.

The WTO selection process for the next Director-General — possible steps that can be taken in the coming weeks

According to the Procedures adopted by the General Council at the end of 2002 for appointing Directors-General, the current selection process of a new Director-General should have concluded with a General Council meeting that was called for November 9, 2020 but then postponed. See PROCEDURES FOR THE APPOINTMENT OF DIRECTORS-GENERAL, Adopted by the General Council on 10 December 2002, WT/L/509 (20 January 2003), paragraphs 8, 15-19; November 6, 2020, Postponement of WTO General Council meeting to consider recommendation of Dr. Ngozi Okonjo-Iweala as next Director-General, https://currentthoughtsontrade.com/2020/11/06/postponement-of-wto-general-council-meeting-to-consider-recommendation-of-dr-ngozi-okonjo-iweala-as-next-director-general/.

In prior posts, I have reported on the developments in the third and final round of consultations that the troika (Chairs of the General Council, Dispute Settlement Body and Trade Policy Review Body) had with Members between October 19-27 and the informal meetings with Heads of Delegation on October 28. See October 29, 2020, WTO press release from informal Heads of Delegation meeting on October 28 and Amb. Walker’s statement to the WTO membership on the outcome of the third round of consultations in the Director-General selection process, https://currentthoughtsontrade.com/2020/10/29/wto-press-release-from-informal-heads-of-delegation-meeting-on-october-28-and-amb-walkers-statement-to-the-wto-membership-on-the-outcome-of-the-third-round-of-consultations-in-the-director-general/; October 29, 2020, October 29th video discussion on WTO Director-General selection process following the announcement of results of third round of consultations and U.S. announcement of not backing the candidate with the greatest support, https://currentthoughtsontrade.com/2020/10/29/october-29th-video-discussion-on-wto-director-general-selection-process-following-the-announcement-of-third-round-of-consultations-and-u-s-aanouncement-of-not-backing-the-candidate-with-the-greatest/; October 29, 2020, U.S. support for Minister Yoo for WTO Director-General premised on need for person with trade expertise, https://currentthoughtsontrade.com/2020/10/29/u-s-support-for-minister-yoo-for-wto-director-general-premised-on-need-for-person-with-trade-expertise/; October 28, 2020, WTO Director-General selection process doesn’t generate immediate consensus, https://currentthoughtsontrade.com/2020/10/28/wto-director-general-selection-process-doesnt-generate-immediate-consensus/.

There were two strong candidates being considered by Members in the third round of consultations — H.E. Yoo Myung-hee of Korea (Trade Minister) and Dr. Ngozi Okonjo-Iweala of Nigeria (Chair of GAVI, former Finance Minister of Nigeria, and senior official at the World Bank). As reported by the Chairman of the General Council, Amb. David Walker of New Zealand, Dr. Ngozi Okonjo-Iweala was the candidate found based on the preferences of Members to be most likely to attract consensus of the Members and whose name would be put forward to the General Council in a special meeting as recommended by the troika consistent with the procedures (para. 19).

Because the Republic of Korea did not withdraw the Korean candidate and because the U.S. indicated it could not support a consensus for Dr. Okonjo-Iweala, the Chair of the General Council was faced with additional consultations ahead of the planned special General Council meeting that was scheduled for November 9. On November 6, the meeting was postponed for an indefinite period reflecting reimposed restrictions by the Swiss government in light of a second wave of COVID-19 cases in Switzerland, thus permitting the Chair more time to consult and seek a resolution.

We are now 13 days after the postponement was announced. Absent a resolution through consultations, the option exists to move to a vote on who should be the next Director-General. WT/L/509, para. 20. While a possibility, to date at least, there has been no move to shift from a consensus approach to a vote, although that may happen in the coming weeks or months.

Steps that could be taken to help resolve the current situation

  1. Withdrawal of H.E. Yoo Myung-hee as a candidate

Since the procedures were adopted at the end of 2002, all candidates who have been put forward have done so understanding that the procedures envision any candidate who is not moved to the next round or who is not found to be the candidate most likely to attract consensus in the final round will withdraw. WT/L/509, para 18 (“It is understood that the candidate or candidates least likely to attract consensus shall withdraw.”). The withdrawal of candidates not receiving the requisite support was followed by all candidates who didn’t advance in 2005 and in 2013 and in the first two rounds of the 2020 consultation process. So the failure of Korea to withdraw its candidate was surprising and inconsistent with the agreed procedures.

Korea is a strong supporter of the WTO as was recognized by Amb. Walker is his prepared comments at the meeting on October 28 (JOB/GC/247).

” 4 TRIBUTE TO CANDIDATES AND TO MEMBERS

“4.1. Before I conclude, I would like to acknowledge H.E. Yoo Myung-hee for her participation in this selection process.

“4.2. As I said at the start, Members consider her a highly qualified individual. H.E. Yoo Myung-hee has vast experience, which she has acquired in a number of leading positions, and her outstanding
qualifications are highly valued and respected by all Members. In her distinguished career, H.E. Yoo Myung-hee has always been a tireless promoter of the multilateral trading system, and I am certain that the WTO can continue to count on that commitment.

“4.3. We would also like to acknowledge the Government of the Republic of Korea and its Geneva Representative Ambassador PAIK Ji-ah for their commitment to this institution and to the multilateral trading system.”

The government of Korea has indicated that it has not decided a course of action and press accounts suggest that Minister Yoo is still in the fight for the Director-General position. Hopefully, Korea will take the correct action even if belatedly and withdraw its candidate. There is no doubt that Minister Yoo is a qualified individual. But that has been true of many candidates who did not ultimately succeed. The procedures adopted by the General Council obviously don’t work if candidates who do not receive the broadest and largest support don’t withdraw. Korea’s and Minister Yoo’s actions in having Minister Yoo stay in the competition are hurting the organization that both have actively supported. In an organization where Members already have a low level of trust, having important Members disregard procedures all have agreed to simply compounds the challenge of restoring trust and permitting the WTO to get on with the critical work before it.

2. Carry on in the existing configuration until the Biden Administration is in place in late January

While it is unlikely that the incoming Biden Administration will have its full team in place for a number of months after President-elect Biden is sworn in on January 20, my belief is that there will be a reasonably strong likelihood that the new Administration will not prevent a consensus for Dr. Ngozi Okonjo-Iweala to be appointed the next Director-General of the WTO. Thus, holding the special General Council meeting sometime in February would likely permit the recommendation identified by Amb. Walker and his two facilitators at the October 28 informal meeting of Heads of Delegation to proceed unopposed. While a February date drastically reduces the time for an incoming Director-General to help Members prepare for the Ministerial to be held in Kazakhstan midyear 2021, many of the priority short term objectives identified by Dr. Okonjo-Iweala (such as completing the fisheries subsidies negotiations and getting the plurilateral on e-commerce to an advanced state) are being worked by existing groups within the WTO and so hopefully will be positioned for early harvest.

Conclusion

The WTO has many needs for reform going forward. There are issues where drawing a line in the sand may be warranted by Members. I believe that the U.S. has correctly drawn a line in the sand on dispute settlement, an issue of concern to Administrations and Congress for more than 20 years. Hopefully reform of the dispute settlement system can happen in 2021 to restore the balance of rights and obligations that sovereign states negotiated during the Uruguay Round and that will limit the role of panels and the Appellate Body to that which was originally envisioned.

While all decisions by Members are obviously for them to make regardless of outside views, as an outside observer I don’t see the justification for drawing a line in the sand in the selection process for a new Director-General. Both candidates in the final round of consultations were highly qualified and respected. The organization needs a new Director-General. The organization will be well served by either candidate. But only one was found through the 2002 procedures to be the candidate most likely to attract a consensus. With a change in U.S. Administrations a few months away, hopefully the 2002 procedures can be respected again without the need to resort to voting and with Dr. Ngozi Okonjo-Iweala becoming the next Director-General of the WTO.