128. Iron Lady of Geneva has to Summon Her Steely Resolve to Right WTO
Author: Adekeye Adebajo
Date: 1 March 2021
Publication: Business Day
Image courtesy of: Wikimedia Commons
Nigeria’s former finance minister, 66-year old Ngozi Okonjo-Iweala, becomes Director-General of the Geneva-based World Trade Organization (WTO) today. She is the first woman and the first African to serve in the post. Widely known as “the Iron Lady” for her tough anti-corruption crusading, Okonjo-Iweala is a competent, courageous, and intelligent Harvard-trained development economist with a doctorate from the Massachusetts Institute for Technology (MIT). She spent 25 years at the World Bank rising to be Vice-President, and revels in her celebrity status as a widely-networked “Davos Dame.”
The WTO was created in 1995 as the world’s main forum for multilateral trade. It has a 623-strong secretariat with a $217 million annual budget. The organisation has, however, attracted many critics who feel that it has become dysfunctional, having failed to conclude any global trade-liberalizing deals since the collapse of the 2001 Doha round. The WTO secretariat’s Western-dominated policy intellectuals also still reflect the neo-liberal ideology of the Bretton Woods institutions from which Okonjo-Iweala herself emerged.
Xavier Carim, South Africa’s former Ambassador to the WTO and one of its most skilled negotiators, insightfully demonstrated in a 2019 paper how the organisation has used the expansion of global markets and protecting intellectual property greatly to enrich large corporations and global finance, while restricting development space for poorer countries. He further argued that rich countries have buried the Doha developmental agenda in favour of their own more parochial interests. Many developing countries view WTO trade accords as unbalanced and detrimental to their interests, while Northern industrial policies have constrained the South’s industrialisation efforts. As anti-globalisation street protesters have consistently argued, these “Lords of Poverty” have helped ensure greater unemployment and inequality across the globe.
Okonjo-Iweala has outlined four key priorities: the production of cheap generic COVID vaccines at a time when the pandemic has reduced global trade flows by 9.2%; accelerating global economic recovery; championing new deals on fisheries and e-commerce; and reviving the WTO dispute settlement mechanism. The Trump administration neutered the organisation’s appellate body for arbitrating trade disputes, and employed bogus national security arguments to impose tariffs on steel and aluminium imports. Though Joe Biden will be more multilateralist, anti-China trade sentiment has become increasingly bipartisan in Washington, as Beijing continues to restrict exports and subsidise state-owned enterprises. Sino-American tensions are thus likely to continue, though Okonjo-Iweala is keen to halt the pernicious “beggar-thy-neighbour” trade policies that have contributed to past armed conflicts. She will, however, learn quickly that when two elephants fight, it is the grass underneath that suffers. Okonjo-Iweala is deeply aware that developing countries have lost hope in the WTO’s ability to deliver on their development agenda. She will thus have to walk a tightrope between rich mercantilist nations and the majority of members belonging to the Southern “trade union of the poor.”
With much less power than the United Nations Secretary-General, Okonjo-Iweala will be even more a “secretary” than a “general.” She has no authority to make governments take any actions that they do not wish to. She can not arbitrate trade disputes. She is effectively a servant rather than a master of the 164 member states. Her main tools are advocacy, cajoling, convincing, and building alliances to get members to act. The widespread support for her candidacy should, however, provide some political capital from which to draw. Past WTO Directors-General have included the dynamic Frenchman, Pascal Lamy, and the recently departed cautious Brazilian, Roberto Azevêdo. Okonjo-Iweala has portrayed herself as a reformist new broom ready to sweep away the cobwebs of deadwood and bureaucratic inertia in order to establish a new organisation that is fit-for-purpose in the twenty-first century. However, Nigeria’s supremely self-confident Iron Lady will soon discover from her scenic office on Lake Geneva that she has no magic wand with which to cast a spell on member states.
Professor Adekeye Adebajo is Director of the University of Johannesburg’s Institute for Pan-African Thought and Conversation.