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

Race for post of WTO DG gets underway on 15 July
Published in SUNS #9162 dated 17 July 2020

Geneva, 16 Jul (D. Ravi Kanth) – The race for the post of Director-General of the World Trade Organization to replace the current incumbent Roberto Azevedo began on 15 July, with three out of the eight candidates showcasing their expertise and ability to bring the WTO back on its rails, trade envoys told the SUNS.

But their overall plans, priorities, and vision for salvaging the trade body in “crisis” may largely suit the interests of the United States among others, trade envoys said.

At a special General Council (GC) meeting conducted in a hybrid format involving both physical presence and on a virtual platform, the three candidates – Dr Jesus Seade Kuri from Mexico, Dr Ngozi Okonjo-Iweala from Nigeria, and Mr Abdulhameed Mamdouh from Egypt – presented their credentials and leadership qualities to head the WTO that is now mired in systemic crisis, said trade envoys, who asked not to be quoted.

Without naming the United States, which appears to have single-handedly brought the WTO to its knees because of its unilateral decision to repeatedly block the selection process for new appointments to the Appellate Body (AB), the three candidates highlighted the need to address the grave crisis at the dispute settlement system as a priority item, trade envoys said.

However, the three candidates differed on how to restore the AB.

Mexico’s Seade Kuri said he would create an informal channel between the Dispute Settlement Body (DSB), which he claimed is the supervisor, and the autonomous Appellate Body to avoid mistakes that were committed in recent years, said a trade envoy who asked not to be quoted.

Nigeria’s Dr Ngozi said the rules-based system is redundant without a binding dispute settlement system.

She said that she will look into the resolution of the issues raised about the functioning of the AB and also address certain structural issues that inhibit many developing and poor countries from participating in the DSB.

Egypt’s Mamdouh said that the reform of the AB has already began with Ambassador David Walker’s report being the first step and more needs to be done to remove the imbalance between the weakened negotiating function and the enhanced DSB’s role in going beyond the mandated rules, an allegation that is often made by the US, said another trade envoy, who asked not to be quoted.

The three candidates spoke about energizing the negotiating function of the WTO by addressing the 21st century issues without clarifying what these issues are, the trade envoy said.

However, the three candidates did not suggest what would happen to the multilateral Round, the Doha Development Agenda trade negotiations, that were also launched in the 21st century but have not concluded yet, the trade envoy said.

Only Nigeria’s Dr Ngozi mentioned about resolving the issue of the permanent solution for public stockholding programs for food security, the special safeguard mechanism, and issues in the domestic subsidies in a calibrated manner, the envoy said.

Surprisingly, she did not mention about cotton, which is a life-and-death concern for the four West African countries – Benin, Burkina Faso, Mali and Chad.

All the three candidates said that their first priority is to move quickly in finalizing the fisheries subsidies negotiations.

The three candidates almost concurred in quickly concluding the fisheries subsidies negotiations on a priority basis.

The three candidates highlighted the importance of enhanced transparency and notification requirements, a priority item for the US and many developed and some developing countries.

Even though the Joint Statement Initiative (JSI) negotiations on e-commerce, investment facilitation, and disciplines for MSMEs (micro, small, and medium enterprises) are not agreed to by many members, including India and South Africa among others, the three candidates focused on accelerating work on the plurilateral Joint Statement Initiatives to be multilateralized without delay.

MEXICO’S CANDIDATE

Mexico’s candidate Dr Seade Kuri, who took the floor first, used the bicycle metaphor to say that the WTO has fallen on the ground because of “lack of momentum,” requiring a mechanic to repair the bicycle.

Given his long experience as a mechanic in salvaging trade negotiations at various levels, Dr Seade Kuri claimed that he is the qualified “mechanic” to repair the WTO, said several trade envoys, who asked not to be quoted.

Due to the multiple crises facing the WTO, particularly the latest Covid-19 pandemic that has severely hit the global economy, Dr Seade Kuri said that the WTO’s credibility is being undermined by the limited resources expended on negotiations.

“Lack of this resource has been exacerbated by the paralysis of the AB crisis,” he said, suggesting that “this double internal crisis” and the Covid-19 pandemic are having a huge negative fallout.

For repairing the WTO, said Dr Seade Kuri, “we have to start negotiations on the current issues as well as a balanced program looking at the 21st century issues and other issues that are neglected.”

However, he did not elaborate on what would constitute the 21st century issues and other neglected issues, said a trade envoy, who asked not to be quoted.

Dr Seade Kuri said that he would involve all the members to address the challenges confronting the dispute settlement system, which needs “renewed strength and full operationalization.”

“Given these challenges, you would honour me by appointing [me as] the DG,” he told members at the meeting, insisting that “I would assure you the following actions”:

1. In the first 100 days, working closely with members to reach an agreement on fisheries subsidies.

2. Restore the two-stage dispute settlement mechanism.

3. Take measures among political leaders and overcome the pessimism plaguing the WTO.

4. Work with members on Covid-19 related measures.

Dr Seade Kuri said “the second axis” of his priorities would involve accomplishing “tangible” outcomes at the WTO’s 12th ministerial conference (MC12) in Nur Sultan, Kazakhstan, next year.

“In the medium- and long-term we adopt mechanisms to address new issues,” Dr Seade-Kuri said.

He said that the WTO needs a DG with vision and political perspective, arguing that he alone can provide these two qualities because of his longstanding experience in various multilateral bodies such as the WTO and the International Monetary Fund (IMF).

He spoke about the issues of development and how he resolved them at the WTO and the IMF, arguing that he would take them strongly if he became the DG, said a trade envoy.

But on the issue of differentiation for availing special and differential treatment (S&DT), the Mexican candidate said he has ideas on how to persuade China and other countries to forego S&DT without any new classification, said a trade envoy, who asked not to be quoted.

Asked about how he would restore the Appellate Body, Dr Seade Kuri said he has his own ideas, adding that no one is questioning the Dispute Settlement Understanding.

He argued that the Dispute Settlement Body is the supervisor on trade disputes while the AB is an autonomous body, insisting that he will create an informal channel of communication between the two to restore the two-stage dispute settlement system.

The Mexican candidate said he will adopt an informal dialogue process to resolve the big issues at the WTO.

In a question raised by Colombia as to how he would perform his role as the chair of the Trade Negotiations Committee, Dr Seade Kuri said the WTO has evolved and the needs of the trade body today are not the same as that of 15 years ago.

Dr Seade Kuri said that fundamental issues including renewing the path of negotiations and reinforcing the negotiations by creating a 165th member involve a coalition of members for resolving issues speedily, the trade envoy said.

NIGERIA’S CANDIDATE

The Nigerian candidate Dr Ngozi Okonjo-Iweala, who has had a long background in finance and development, said “trade is vital and the world needs a reinvigorated WTO more than any time in the past.”

She showcased her accomplishments in finance, development, and access to vaccines. Dr Ngozi said she is a “strong believer in trade to bring about shared benefits.”

She said the main task is to restore trust and bring the WTO into a positive circle of win-win solutions.

The former Nigerian minister said the need of the hour is to strengthen the WTO, by completing the fisheries subsidies negotiations on a priority basis.

She emphasized that in agriculture, the permanent solution for public stockholding programs for food security, the special safeguard mechanism, and domestic support must be addressed in a calibrated manner.

Dr Ngozi repeatedly highlighted the importance of accelerating work in the Joint Statement Initiative group issues such as electronic commerce, disciplines for micro, small and medium enterprises, investment facilitation and trade and gender.

She said outcomes from the plurilateral JSI issues will be multilateralized, suggesting that the JSI initiatives must remain open for new members to join, the trade envoy said.

She said the WTO must take on the new issues like environment, suggesting that “if WTO is not there, we have to re-invent it at this juncture.”

She also spoke about the 21st century issues and the need to have strong disciplines for transparency and notifications.

But she did not mention the issue of the differentiation among developing countries for availing special and differential treatment.

The Nigerian candidate highlighted the need to remove export restrictions on medical equipment and food items, saying that with her experience, she will ensure that medicines and vaccines are provided on an equitable basis without violating the Intellectual Property Rights (IPRs).

She said trade must benefit all members, and if countries in the South are left behind they should be provided assistance from Aid for Trade.

When asked what her priorities are for MC12, she said she will achieve, in a calibrated manner, certain results quickly, particularly on fisheries subsidies in which there are a couple of difficult issues concerning overfishing and overcapacity, and also small-scale fisheries and other issues.

Asked how she would persuade the US to address the major problems at the WTO, Dr Ngozi said “I would say that the WTO delivered to all including the US, and it is a shared benefit for all. We need an institution and we don’t need trade wars; don’t leave it now, and we have to fix the problem,” she said.

The Nigerian candidate said “MSMEs are very important, and integrating them into the MTS [multilateral trading system] is also very important.”

As regards a woman leading the WTO for the first time, she said, “if I get chosen it is a sign to girls and women that they can also lead this organization, which is dominated by men from developed countries for 62 years and developing countries for 11 years.”

For strengthening the consensus principle to work better, she said the first thing is the need to build the trust, suggesting that concrete attempts to build trust will only happen after certain wins.

Significantly, while touting the benefits of the JSI group’s work on electronic commerce, Dr Ngozi remained silent on the unfinished multilateral work on the moratorium on customs duties on electronic transmissions, said a trade envoy, who asked not to be quoted.

However, she emphasized on bridging the digital divide, saying that “we must bite that bullet on the e-commerce negotiations.”

EGYPT’S CANDIDATE

Egypt’s Abdulhameed Mamdouh touted about his long 35 years of experience in grappling with trade issues, first as a negotiator for Egypt and later as the Director of the WTO’s services division.

He said the WTO needs a clear agenda of content on reforms, suggesting that there is no mainstream discussion on the Appellate Body, special and differential treatment, and transparency and notification issues.

Mr Mamdouh said the WTO needs a different kind of leadership because of the unprecedented challenges it is facing now.

“I’m atypical candidate in atypical times,” he insisted, arguing that the WTO needs a DG who must be a proper honest broker.

On WTO reforms, he said “we must have a clear view and roadmap”, arguing that the agenda must be finalized at the WTO’s 12th ministerial conference.

Mr Mamdouh highlighted that the ongoing JSI negotiations on e-commerce, disciplines for MSMEs, and trade and gender are priority items.

He said he is “a problem solver, a humble servant, and a threat,” arguing that he sees the role of the DG as one of honest broker.

Mr Mamdouh lamented that there is no clear view of the proposed reforms at the WTO, insisting that members need a clear view and a roadmap and an agenda with content at MC12, according to a trade envoy, who preferred not to be quoted.

The Egyptian candidate said that the WTO is a tripod standing on three pillars – the negotiating and legislative function, the Dispute Settlement Body, and the regular Secretariat work.

The need of the hour is to remove the imbalances in the tripod, he said.