TWN Info Service on WTO and Trade Issues (Jul20/09)
13 July 2020
Third World Network

Selection process for WTO DG post extended by two months
Published in SUNS #9158 dated 13 July 2020

Geneva, 10 Jul (D. Ravi Kanth) – The selection process for the post of Director-General of the World Trade Organization is being extended by two months until 7 November, after members called for a “transparent and inclusive process”, the WTO General Council Chair, Ambassador David Walker of New Zealand, suggested on 9 July.

In an email sent to heads of delegation on 9 July, seen by the SUNS, Ambassador Walker said that he had held consultations with members “in various configurations over a period of three weeks” on “Phase 3 of the (selection) process, which is the period to “narrow down the field of candidates” and arrive at a consensus on the appointment of the next Director-General”.

Ambassador Walker said that he “asked Delegations whether the duration of Phase 2 – in which candidates make themselves known to Members – could be expedited, and if so, by how long.”

According to the General Council (GC) chair, “all delegations that came forward to consult with me noted the importance they attached to transparency and inclusiveness in this process.”

“Given the urgency of the situation, delegations supported the need to establish expedited deadlines for this process,” he said in his email.

“Following this process of consultations, and having reflected on the views expressed, it is my considered view that the duration of Phase 2 can be of two months,” Ambassador Walker pointed out.

“On this basis, Phase 3 of the process, which is the period of consultations to narrow the field of candidates and ultimately to arrive at a consensus on the appointment of a new Director-General, will start on 7 September 2020,” and “according to the Procedures, this Phase should last no longer than 2 months” ending around 7 November.

“In order to provide clarity for both the candidates and the Membership regarding these timelines, we will therefore proceed with Phase 2 and Phase 3 of the appointment process following the above-mentioned expedited deadlines,” the chair said.

“I will be engaging with Members on the modalities of Phase 3” concerning “narrowing the field of candidates and ultimately to arrive at a consensus on the appointment of a new Director-General”, the chair assured the members.

But he did not clarify on who will head the WTO during the three months beginning from 1 September, when the current incumbent Roberto Azevedo steps down from office on 31 August.

In the past, in the absence of the DG, a deputy director-general (DDG) was appointed as acting DG during the selection process that lasted several months.

According to the December 2002 guidelines for the appointment of Directors-General (WT/L/509), it was clearly spelled out that during the selection process that could last for several months, an acting DG appointed from one of the existing DDGs will conduct the regular work while the three-member panel – the GC chair, the chair of the Dispute Settlement Body, and the chair of the Trade Policy Review Body – will oversee the selection process.

In 1998-99, the selection process dragged on for many months during which period an acting DG had conducted the regular work.

It remains to be seen whether an acting DG will be appointed for the period between 1 September and 7 November, said a person familiar with the selection process.

At the end of the nomination process that ended on 8 July, eight candidates emerged in the race.

The first candidate to file papers is Mexico’s Under-Secretary for North America, Mr Jesus Seade Kuri, from the South American region.

Subsequently, two candidates from Africa – Egypt’s Abdulhameed Mamdouh, a former WTO official, and the former Nigerian finance minister, Ms Ngozi Okonjo-Iweala, who is currently chairing the Board of Gavi, the global alliance for vaccines – have filed their papers.

Mr Tudor Ulianovschi, the former Foreign Minister of Moldova, and Ms. Yoo Myung-hee, South Korea’s trade minister, then filed their papers.

And finally, on 8 July, three candidates – Ambassador Amina Mohamed from Kenya; Mr Mohammad Maziad Al-Tuwaijri, Saudi Arabia’s economy and planning minister; and Mr Liam Fox, the former trade secretary of Britain – filed their papers.

Interestingly on 8 July, the US-Kenya bilateral trade agreement negotiations started in Washington that could pave the way for more bilateral agreements in Africa, said an analyst, who asked not to be quoted.

According to several media reports, the US Trade Representative (USTR) Ambassador Robert Lighthizer has said that Britain’s candidate Mr Liam Fox is “one of the favorites” for Washington in the DG race.

According to a report in Politico, in a webcast hosted by Chatham House, Ambassador Lighthizer said, “I’m an admirer of his (Mr Fox),” adding that “I’ve had many a conversation with him. I’ve even had the occasional cocktail with him. He’s smart, he knows the area, he has a good philosophy”.

The USTR went on to say that “it’s not just a question of who my closest friend is in the group … If you say what are we looking for? Number one, we have someone who understands that we have a fundamental need for reform.”

By declaring support to Mr Fox, the US may have undermined his chances with much less preferences from the European Union and many developing and least-developed countries, the analyst said.

During the Chatham House conversation, Ambassador Lighthizer said the world should “get rid” of bilateral free trade agreements in favor of a multilateral trade system – a comment at odds with the President’s oft-stated preference for bilaterals, according to a report in the Washington Trade Daily (WTD) on 10 July.

“The FTAs, in my opinion, we should just get rid of them,” Ambassador Lighthizer argued, adding that “we should have a multilateral system or a bunch of bilateral systems.”

“And to be honest I can go either way,” the USTR suggested.

He charged the European Union for professing multilateralism, “and then go around basically being the biggest proponents of a bilateral system.”

According to the WTD report, the USTR severely criticized the EU’s 77 bilateral trade agreements, saying that they are “one of the biggest challenges to the multilateral trading system.”

The EU’s 77 bilateral free trade agreements are “like some kind of trade colonialism,” the USTR said, asking “why is it that they should have 77 people who they give better tariff rates to than the rest of the people?”.

“You’re (the EU) trying to get an edge on everyone in bilateral deals. I would suggest that’s a real challenge to the trading system,” the USTR said, according to the WTD report.

On the current existential crisis at the WTO, the USTR said that “the global trade must be reformed, including through a “reset” of global tariff rates, an end to using the WTO’s dispute settlement system to make new rules without negotiations and new rules to deal with China’s state-run economic model,” according to the WTD report.

Ambassador Lighthizer said the WTO is at a “turning point,” adding, “I think we’ll end up with an organization that does something helpful, but whether it’ll be the WTO or something like it, who knows. It’s that big and important a time.”

“If the WTO cannot deal with China and other state-run economies, the United States might need to withdraw,” he stated, according to the WTD report.

He escalated his criticism of the Appellate Body (AB), saying that it has been used by countries to get rules favourable to them without going through the negotiation process.

Having made the Appellate Body dysfunctional last year, Ambassador Lighthizer said that “the dispute settlement system was headed up until recently by an Appellate Body that created jurisprudence – jurisprudence that took away benefits that members had negotiated and put new obligations on those people. It’s taking a negotiating forum and turning it into a court.”