TWN Info Service on WTO and Trade Issues (Feb22/07)
8 February 2022
Third World Network

WTO DG embarks on controversial mission to reform Secretariat
Published in SUNS #9506 dated 3 February 2022

Geneva, 2 Feb (D. Ravi Kanth) -  The WTO director-general Ms Ngozi Okonjo-Iweala has apparently embarked on her new mission to reform the WTO Secretariat, while seemingly dismissing the importance of "institutional knowledge" and "belittling" the directors who have resigned due to her alleged "autocratic" governance, said people familiar with the development.

At a town hall meeting on 1 February, the DG apparently announced some of her new measures to reform the Secretariat.

They include the appointment of her chief of cabinet Mr Bright Okogu as the new head of the Council and TNC (Trade Negotiations Committee) division that assists the General Council and also the TNC.

Mr Okogu replaces Mr Victor Do Prado, who has resigned apparently due to the DG's alleged "autocratic" functioning, said people familiar with the development.

Ms Okonjo-Iweala also announced the appointment of Ms Victoria Donaldson, currently Counsellor in the Delivery Unit, to oversee the work at the new "Transformation" division.

Earlier, Ms Donaldson had also worked along with former Ambassador Crawford Falconer from New Zealand in the Brexit division in London, said people familiar with the development.

The new head of the "Transformation" division will be working with the representative of McKinsey & Company and the DG to bring about "transformation governance", the DG apparently said at the town hall meeting.

The DG appears to have said that the WTO Secretariat is merely a "technical" outfit.

Interestingly, the word "technical" is not mentioned in Article VI of the Marrakesh Agreement that deals with the role of the "Secretariat", said people familiar with her comments.

According to Article VI of the Marrakesh Agreement that established the WTO in 1995, the Secretariat's functions are as follows:

"1. There shall be a Secretariat of the WTO (hereinafter referred to as "the Secretariat") headed by a Director- General.

2. The Ministerial Conference shall appoint the Director-General and adopt regulations setting out the powers, duties, conditions of service and term of office of the Director-General.

3. The Director-General shall appoint the members of the staff of the Secretariat and determine their duties and conditions of service in accordance with regulations adopted by the Ministerial Conference.

4. The responsibilities of the Director-General and of the staff of the Secretariat shall be exclusively international in character. In the discharge of their duties, the Director-General and the staff of the Secretariat shall not seek or accept instructions from any government or any other authority external to the WTO. They shall refrain from any action which might adversely reflect on their position as international officials. The Members of the WTO shall respect the international character of the responsibilities of the Director-General and of the staff of the Secretariat and shall not seek to influence them in the discharge of their duties."

Clearly, the DG's characterization of the Secretariat as being merely a "technical" outfit appears to be inconsistent with the role of the Secretariat as outlined in the Marrakesh Agreement, said people who asked not to be quoted.

As regards the role of the head of the "Transformation" division, the DG apparently said that Ms Donaldson would work with the representative of McKinsey & Company, and the DG's office, to usher in "transformation governance" at the WTO Secretariat.

FAILURE TO SHARE MCKINSEY & COMPANY REPORT

At the town hall meeting, while criticizing the apparent "misinformation" in the media on reports about the turmoil taking place in the Secretariat as well as over the McKinsey & Company report, the DG appears to have said that she is surprised that this issue concerning the McKinsey & Company report seems to be coming out every time.

Ms Okonjo-Iweala apparently said everything about the recommendations made by McKinsey & Company were shared with members and the staff several times.

Speaking to SUNS on the condition of anonymity, a member of the WTO's Committee on Budget, Finance, and Administration told this writer that the DG did present the recommendations made by McKinsey & Company last year but has not shared the full report so far.

The member sought to know why the DG seems to be hiding the report.

Is it because the analysis and recommendations of McKinsey & Company cannot withstand "scrutiny", or is it due to her efforts to "conceal" the contents of the report, the member asked.

Apparently, McKinsey & Company asked staff members in a questionnaire as to "who the WTO's competitors were", revealing that McKinsey & Company seems to have little or no clue about the WTO and its operations.

The member pointed out that the WTO Secretariat is one of the "most professional and effective international Secretariats."

RESIGNATION OF DIRECTORS

Commenting on the resignation of some directors and the loss of "institutional memory", the DG said at the town hall meeting that though she does not want to speak on several things, she wants to "correct the incorrect information" as well as the "misreporting" in the media.

Coming down heavily on the resignation of some directors and loss of "institutional memory", the DG apparently said that their departure is a "gift" to the organization and it can be "treasured".

She said they should have shared their institutional memory before they left the organization, while simultaneously suggesting that there is no such thing as institutional memory, said people familiar with her comments at the meeting.

She also said that she was not informed about other directors, who are retiring soon due to health or other grounds. The DG said that she did not want to change the way the organization is currently functioning, maintaining that the committees are only to serve the members, said people, who asked not to be quoted.

Ms Okonjo-Iweala stressed that she wants to bring "global transformation governance". However, she did not mention as to what would happen to the Delivery Unit that she created last year, said people, who asked not to be quoted.

As reported in SUNS #9305 dated 15 March 2021, she told the staff in a notice on 11 March that the Unit will work directly with her as well as other units across the Secretariat "to better support Member's efforts to reach concrete outcomes that will contribute to our work on growth, recovery and sustainable development and to a renewed and reinvigorated WTO."

She also said the core function of the Delivery Unit includes working with the DG and in close coordination with Divisions and WTO members to provide "solutions-oriented support and strategic direction aimed at enabling members to achieve deliverables for MC12."

With the creation of a new "Transformation" division, which will perform almost the same functions as the Delivery Unit, it remains unclear what the DG would do with the Delivery Unit.

GLOBAL CARBON PRICE

At the town hall meeting, the DG announced that she would work with the IMF on a "global carbon price", and on "plastic goods, and illicit trade" with the World Bank and the Paris-based Organization for Economic Cooperation and Development (OECD), said people familiar with the development.

Ms Okonjo-Iweala apparently said that "nice" work is being done outside the WTO on illicit trade, subsidies and carbon pricing, said people familiar with her comments.

She went on to emphasize that "we need to conclude negotiations and embark on exciting work happening outside", according to people familiar with her remarks.

As reported in SUNS #9504 dated 1 February 2022, many of these climate change related trade initiatives are being openly pushed by the United States, the European Union, China, Canada on behalf of the Ottawa Group, Australia, and New Zealand among others.

The DG said members are already discussing issues such as the "circular economy and plastics", suggesting that one of her deputies (deputy director-general Ms Anabel Gonzalez from Costa Rica who had earlier worked with the Washington-based Peterson Institute for International Economics) is working on the issues of illicit trade, trade and environment, and "TRIPS and Health".

The DG's mention of "TRIPS and Health" appeared to elicit some concern among members as to what the DG implied, as she had previously consistently mentioned the Trade and Health initiative as proposed by the European Union and Canada, on behalf of the Ottawa Group.

The issue of Trade and Health also figured prominently in Walker's controversial report on the WTO's response to the pandemic.

Ms Okonjo-Iweala seems to have brazened out the concerns expressed by a large majority of countries about the DG's apparent penchant for non-mandated issues and her alleged flouting of the rules of a member-driven, rules- based intergovernmental organization.

At the town hall meeting, the DG also spoke about improving people's living conditions, citing the preamble of the Marrakesh Agreement.

She said that she wants to focus on "people-centered" policies, a term akin to the US Trade Representative (USTR) Ambassador Katherine Tai's emphasis on "worker-centered" trade policies, said people, who preferred not to be quoted.

Even as she has allegedly violated several other provisions in the preamble as well as the rules set out in the Marrakesh Agreement, the DG seems to selectively pick a line here and a line there to bolster her case on pursuing the non-mandated issues. "She always twists the facts and is economical about the truth," said a member, who asked not to be quoted.

USING THE CIA MANUAL TO PROMOTE SMALL-GROUP MEETINGS

In her statement made at the informal General Council (GC) meeting on 25 January (Job/GC/290), Ms Okonjo- Iweala suggested that major issues cannot be addressed in an open-setting involving all members in the room.

She also underscored the need to address these issues in small groups before bringing them to the full house. (See SUNS #9503 dated 31 January 2022).

In that same statement, she cited a report that was dug out from the GATT/WTO archives. That report spoke about how to carry out sabotage in an enemy territory.

The DG said at the informal GC meeting: "Let me end by sharing something. I hope this will make you laugh when I say it so that we can end on a bit of a light note. One of my staff dug out from the archives of this organization the other day what I consider a gem. It was something from the External Intelligence Services of one of our GATT/WTO Members. It was a manual on how to carry out sabotage in enemy territory. It is in our archives so this is not made up. Most of it dealt with how to wreck infrastructure and industrial capacity."

She said that "one section dealt with how to undermine organizations." And here is what it says: "If you want to undermine an organization, make speeches, frequently and at great length; when possible, refer matters to committees for further study and consideration; refer back to matters decided upon at the last meeting and attempt to re-open them; advocate "caution" and urge others to avoid haste; and, raise questions about the propriety of any decision. I do not know if any of these rings true to any of you but it rings very true to me coming here. So, if we do not want to play into the hands of this intelligence advice, we need to use this opportunity to really show that we are building up the organization and not undermining it."

In response to the article in SUNS #9503 on the DG's statement, an observer pointed out that the above paragraph seems to be from a manual prepared by the predecessor of the Central Intelligence Agency of the United States, which was called the Office of Strategic Services (OSS).

The OSS, headed by one Mr John Donavan in 1944, prepared a manual titled "Sample Sabotage Field Manual."

In her statement, the DG seems to have paraphrased from page 28 of the Sample Sabotage Field Manual, under the title of "General Interference with Organizations and Production."

The DG's recourse to a OSS manual, even on a lighter note, seems to be fraught with dangerous implications for the developing countries that have invested all their hopes in a consensus-driven multilateral organization.