President Biden

WTO Director-General selection process — withdrawal of Korea’s Trade Minister Yoo important step to consensus behind Nigeria’s Dr. Ngozi Okonjo-Iweala

Press accounts report that Korea’s Trade Minister Yoo Myung-hee announced today that she would be withdrawing as a candidate to become the next Director-General of the WTO. See, e.g., Kyodo News, South Korea’s trade minister withdraws from race for next WTO head, February 5, 2021, https://english.kyodonews.net/news/2021/02/0ddc7c65b2cb-s-koreas-trade-minister-withdraws-from-race-for-next-wto-head.html#:~:text=South%20Korea’s%20minister%20for%20trade,of%20the%20World%20Trade%20Organization.&text=The%20career%20bureaucrat%20had%20been,Ngozi%20Okonjo%2DIweala%20of%20Nigeria; South China Morning Post, WTO: South Korea’s Yoo Myung-hee withdraws from director general race, clearing path for Nigeria’s Ngozi Okonjo-Iweala, February 5, 2021, https://www.scmp.com/economy/china-economy/article/3120709/wto-south-koreas-yoo-myung-hee-withdraws-director-general; Bloomberg, Okonjo-Iweala’s Path to WTO Clears Hurdle as Korean Quits Race, February 5, 2021, https://www.bloomberg.com/news/articles/2021-02-05/korean-minister-drops-wto-bid-clears-way-for-nigerian-candidate.

Minister Yoo and Dr. Okonjo-Iweala had been the two remaining candidates entering the third round of consultations in October 2020, and Dr. Okonjo-Iweala had been announced by the Chairman of the General Council as the candidate most likely to attract consensus following the third round. The United States and Korea had spoken before the informal heads of delegation meeting where the WTO Members were provided the results of the consultations. While the procedures being followed were those agreed to by the General Council in late 2002 and followed in earlier selections of the Director-General, Korea failed to withdraw its candidate as required by the procedures and the United States indicated it would not agree to a consensus behind Dr. Okonjo-Iweala, also contrary to the intended spirit of the procedures and prior actions of Members in the 2005 and 2013 selection processes. See WT/L/509, para. 18 (“The outcome of the consultations shall be reported to the membership at each stage. It is understood that the candidate or candidates least likely to attract consensus shall withdraw. The number of candidates expected to withdraw at each stage shall be determined according to the initial number of candidates, and made known in advance. This process shall be repeated in successive stages on the basis of a revised slate of candidates each time, with the aim of establishing consensus around one candidate.”).

I have provided a lot of coverage of the 2020-21 slection process and details of prior actions can be found by reference to those earlier posts. See, e.g., January 26, 2021, Letter from variety of former U.S. officials to President Biden urges U.S. support for Dr. Ngozi Okonjo-Iweala as next WTO Director General, https://currentthoughtsontrade.com/2021/01/26/letter-from-variety-of-former-u-s-officials-to-president-biden-urges-u-s-support-for-dr-ngozi-okonjo-iweala-as-next-wto-director-general/; January 19, 2021,   The next Director-General of the WTO – USTR Lighthizer’s comments to the Financial Times, https://currentthoughtsontrade.com/2021/01/19/the-next-director-general-of-the-wto-ustr-lighthizers-comments-to-the-financial-times/; November 19, 2020, The WTO selection process for the next Director-General – possible steps that can be taken in the coming weeks, https://currentthoughtsontrade.com/2020/11/19/the-wto-selection-process-for-the-next-director-general-possible-steps-that-can-be-taken-in-the-coming-weeks/; November 10, 2020, The values of the WTO – do Members and the final Director-General candidates endorse all of them?, https://currentthoughtsontrade.com/2020/11/10/the-values-of-the-wto-do-members-and-the-final-director-general-candidates-endorse-all-of-them/; 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/; 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/.

What press articles are reporting Minister Yoo said on announcing her withdrawal

The Kyodo News article quotes the Minister as saying, “‘With the vacancy state of the WTO head being prolonged, the future of the WTO is also getting unclear,’ Yoo told a press conference. ‘I therefore have decided to withdraw from candidacy following close arbitration and agreement with the United States, our strong ally.'” The article also indicates that the Ministry had indicated that Minister Yoo would soon “notify the WTO of her decision.”

The South China Morning Post article indicates that the WTO had not as yet received formal notification of Minister Yoo’s withdrawal, and there is nothing on the WTO webpage as of this writing that indicates such a notification has been received.

The Bloomberg article states in part that –

“Yoo decided after discussions with the U.S. and other major nations, and took various issues into account including the need to revitalize the multilateral organization, according to a statement from Korea’s trade ministry on Friday.

“’There was no consensus,’ Yoo said. ‘So we needed enough time for in-depth consultations with important members, including the U.S.’”

Next steps

One would expect that the formal notification of withdrawal from Korea to the WTO will be received in the next week or so. The focus then shifts to the United States and whether the U.S. will indicate it is willing to be part of the consensus behind Dr. Ngozi Okonjo-Iweala or not. Many have urged the Biden Administration to join the consensus. The comments of Minister Yoo indicating consultations with various trading partners, including the United States, suggests that the U.S. is comfortable with her withdrawal. Obviously with the withdrawal of Minister Yoo, there is only one candidate from the 2020 process remaining. So unless the United States opts to fight on for the consideration of alternative individuals (including restarting or redoing the selection process), the likely question is simply one of timing.

Timing for the U.S. making a change in position of Dr. Ngozi Okonjo-Iweala for WTO Director-General likely, but not necessarily, will relate to when President Biden’s nominee for U.S. Trade Representative is confirmed by the Senate and sworn in. The confirmation hearing has not yet been set. Moreover, the Senate moves to the impeachment trial of former President Trump next week which could take up several weeks. It is understood that Senate Committees can hold hearings but can’t refer nominations to the full Senate for approval during the trial. Thus, it is unlikely that the new USTR will be confirmed in the next few weeks.

The President has taken other actions involving international agreements or organizations without waiting for Senate confirmation of cabinet or other senior officials (e.g., rejoining the Paris Climate Agreement and revoking withdrawal from the World Health Organization. So it is possible that the President and his current senior team will decide on the WTO DG without waiting for Katherine Tai to be confirmed.

The Chair of the General Council can call a special meeting of the General Council at any time for the purpose of considering the recommendation he and his facilitators make on the selection of the next Director-General. That said, the next regularly scheduled General Council meeting is set for March 1-2.

Conclusion

Since late October 2020, there were always going to be two actions needed to resolve the Director-General selection process. The first has now been announced but not yet notified, the withdrawal of Minister Yoo from the process. The second, and remaining issue, is the change of position by the United States to be willing to join the consensus behind Dr. Okonjo-Iweala. If Minister Yoo has been in contact with the U.S., as reported in the press articles, it is likely that the U.S. is both supportive of her withdrawal and seriously considering joining the consensus behind the remaining candidate. Hopefully, by early to mid-March that second step will occur, and the WTO can appoint Dr. Ngozi Okonjo-Iweala as the next Director-General.

Letter from variety of former U.S. officials to President Biden urges U.S. support for Dr. Ngozi Okonjo-Iweala as next WTO Director General

With the inauguration of President Joseph R. Biden, Jr. accomplished, a number of former U.S. officials and others — many with roles in U.S. relations with one or more countries in Africa — wrote President Biden urging him to back Dr. Ngozi Okonjo-Iweala for the Director-General post at the WTO. See All Africa, Africa: Former U.S. Officials Call on Biden to Back WTO Selection for Okonjo-Iweala, 22 January 2021, https://allafrica.com/stories/202101220055.html?utm_campaign=allafrica%3Aeditor&utm_medium=social&utm_source=twitter&utm_content=promote%3Aaans%3Aababae.

The Trump Administration had opposed forming a consensus behind Dr. Okonjo-Iweala despite her having received the largest level of support from WTO Members and, pursuant to the procedures being followed (and that were consistent with procedures adopted by the General Council at the end of 2002) was found to be the candidate most likely to command a consensus. According to para. 19 of the 2002 procedures, “At the end of the final stage of the consultative process, the Chair, with the support of the facilitators, shall submit the name of the candidate most likely to attract consensus and recommend his or her appointment by the General Council.” WT/L/509, para. 19. Korea’s candidate, Trade Minister Yoo Myung-hee, did not withdraw as required by the procedures. As noted, the United States indicated it could not join a consensus around Dr. Okonjo-Iweala on the basis of the belief that the WTO needed a Director-General with extensive trade expertise and Dr. Okonjo-Iweala did not possess that background. As a result, the Chair of the General Council has not put forward Dr. Okonjo-Iweala to the General Council for a decision, and the WTO remains without a Director-General.

I have reviewed these developments in prior posts. See, e.g., January 19, 2021,   The next Director-General of the WTO – USTR Lighthizer’s comments to the Financial Times, https://currentthoughtsontrade.com/2021/01/19/the-next-director-general-of-the-wto-ustr-lighthizers-comments-to-the-financial-times/; November 19, 2020, The WTO selection process for the next Director-General – possible steps that can be taken in the coming weeks, https://currentthoughtsontrade.com/2020/11/19/the-wto-selection-process-for-the-next-director-general-possible-steps-that-can-be-taken-in-the-coming-weeks/; November 10, 2020, The values of the WTO – do Members and the final Director-General candidates endorse all of them?, https://currentthoughtsontrade.com/2020/11/10/the-values-of-the-wto-do-members-and-the-final-director-general-candidates-endorse-all-of-them/; 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/; 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/.

The letter sent to President Biden was signed by thirty-seven individuals, many with prior State Department responsibilities (many involving Africa), some from USTR and other government agencies or the White House (some with Africa responsibilities), some from private companies (often working in Africa) or from academia. The list as it appears in the All Africa publication with stated prior and current affiliations is copied below.

The Hon. Mimi Alemayehou
Former Executive Vice President, U.S. Overseas Private Investment Corporation (OPIC)
Former U.S. Executive Director of the African Development Bank

Ambassador Johnnie Carson
Former U.S. Assistant Secretary of State for Africa Affairs
Former U.S. Ambassador to Kenya, Zimbabwe, and Uganda

Teresa Clarke
Chairman and CEO, Africa.com

Ambassador Herman J. “Hank” Cohen
Former U.S. Assistant Secretary of State for African Affairs
President & CEO, Cohen and Woods International

Akunna Cook
Former U.S. Foreign Service Officer
Founder and Principal, Drake Road Strategies

John G. Coumantaros
Chairman of Flour Mills of Nigeria
Chairman CEO of Southern Star Shipping Co Inc (New York)
Founding Member of US Nigeria Council

Ambassador Ruth Davis
Former U.S. Ambassador to the Republic of Benin
Former Director, U.S. Foreign Service Institute
Former Director General, U.S. Foreign Service and Director of Human Resources

The Hon. Vivian Lowery Derryck
Former Deputy Assistant Secretary (EEO and Civil Rights), U.S. Department of State
Founder of the Bridges Institute
Former Assistant Administrator for Africa, USAID

The Hon. Lauri Fitz-Pegado
Former Assistant Secretary
Director General, U.S. Foreign Commercial Service

Melvin Foote
President & CEO, Constituency for Africa

The Hon. Tony Fratto
Former Assistant Secretary, U.S. Treasury
Former White House Deputy Press Secretary
Managing Partner Hamilton Place Strategies

Ambassador Jendayi Frazer
Former U.S. Assistant Secretary of State, Bureau of African Affairs
Former U.S. Ambassador to South Africa
Former Special Assistant to the President & Senior Director for African Affairs, National Security Council
President & CEO, 50 Ventures LLC

Ambassador Michelle D. Gavin
Former U.S. Ambassador to Botswana
Former Senior Director for Africa, National Security Council

Dr. Gloria Herndon
Former Foreign Service Officer, U.S. Department of State
Chair Corporate Board, National Association for Equal Opportunity in Higher Education (NAFEO)
CEO, GB Group

Cameron Hudson
Former Director, African Affairs, National Security Council
Senior Fellow, Atlantic Council Africa Center

Ambassador Makila James (ret.)
Former Deputy Assistant Secretary, East Africa and The Sudans, U.S. Department of State
Former U.S. Ambassador to The Kingdom of Swaziland

Ambassador (ret.) Howard F. Jeter
Former U.S. Ambassador to Nigeria and Botswana
Former Special Presidential Envoy to Liberia

Jeffrey Krilla
Former Deputy Assistant Secretary of State

Florie Liser
Former Assistant U.S. Trade Representative for Africa
President and CEO of Corporate Council on Africa (CCA)

Clay Lowery
Former Assistant Secretary, U.S. Treasury
Former Director, International Finance, National Security Council

Ambassador (ret.) Terence P. McCulley
Former U.S. Ambassador to Mali, Nigeria and Côte d’Ivoire
Chairman, US-Nigeria Council for Food Security, Trade and Investment

Mora McLean
President Emerita, Historian, and Program Strategist, The Africa-America Institute
Former Chair, USTR Trade Advisory Committee on Africa

Cheryl Mills
Former Counselor and Chief of Staff, Office of the Secretary, U.S. Department of State
Former Deputy Counsel to the President, The White House

Todd Moss, PhD
Former U.S. Deputy Assistant Secretary of State

Ambassador John Negroponte
First Director, National Intelligence
Former Ambassador to the United Nations
Former Deputy Secretary of State

The Hon. Constance Berry Newman
Former Assistant Secretary of State for African Affairs
Chair of the African Renaissance and Diaspora Network

Thomas R. Nides
Former Chief of Staff, Office of the United States Trade Representative
Former Deputy Secretary of State for Management and Resources, U.S. Department of State
Vice Chairman, Morgan Stanley

Bernadette Paolo
Former Staff Director, U.S. House of Representatives Subcommittee on Africa
Co-founder & Former CEO, The Africa Society

Bobby J. Pittman
Deputy Assistant Secretary for International Finance and Debt, U.S. Department of Treasury
Special Assistant to the President & Senior Director for African Affairs, National Security Council, White House

Pearl Robinson
Associate Professor, Tufts University
Past President, The African Studies Association

Ambassador Robin Renee Sanders
Former U.S. Ambassador to Nigeria
Former U.S. Ambassador to ECOWAS
Former U.S. Ambassador to Republic of Congo
Former Africa Director, National Security Council
CEO-FEEEDS

Jeannine B. Scott
Chairman, Constituency for Africa (CFA)
Principal, America to Africa Consulting (A2A)
Former Alternate & Advisor to the U.S. ED at the African Development Bank

Timothy Shortley
Former Director, African Affairs, National Security Council
Chief Operating Officer, 50 Ventures, LLC

Ambassador John Simon
Former Senior Director, National Security Council
Former U.S. Ambassador to the African Union
Managing Partner, Total Impact Capital
Member, USTR Trade Advisory Committee for Africa

The Hon. Gayle Smith
Former Administrator, USAID
Former Special Assistant to the President & Senior Director for African Affairs, National Security Council

Joseph E. Stiglitz
Former member and Chair of the Council of Economic Advisers
University Professor, Columbia University
Chief Economist, Roosevelt Institute
Former Chief Economist of the World Bank
Recipient of Nobel Memorial Prize in Economics, 2001

Rosa Whitaker
Former Assistant United States Trade Representative for Africa
President, The Whitaker Group

It is unclear whether the Biden Administration will take trade actions ahead of having the USTR nominee, Katherine Tai, confirmed. In prior posts, I have indicated that I hoped the Biden Administration would quickly alert the WTO to its willingness to join a consensus for Dr. Ngozi Okonjo-Iweala becoming the next Director-General. While there is little doubt that Minister Yoo has a greater trade background that Dr. Okonjo-Iweala, a trade background is not critical to being a successful WTO Director-General. Dr. Okonjo-Iweala has very strong credentials and was supported by the vast majority of the membership. If the U.S. indicates it is willing to join the consensus that action will almost certainly result in Korea withdrawing Minister Yoo as a candidate. These two actions would put the WTO membership back on track to abide by the procedures agreed by the General Council and being used in the 2020 Director-General selection process. Most importantly, it would get the WTO a new Director-General. Such a result is a first step in moving the WTO in the right direction going forward. The letter from former U.S. officials and others is the right message for the Biden Administration to receive. Hopefully, the President will act quickly on this particular issue.