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TWN
Info Service on WTO and Trade Issues (Apr24/06) Geneva, 2 Apr (D. Ravi Kanth) — As the first term of the World Trade Organization’s incumbent Director- General, Ms Ngozi Okonjo-Iweala, concludes on 31 August 2025, the new chair of the WTO’s General Council, Ambassador Petter Olberg of Norway, will need to start the selection process for the next DG after the European summer break in July-August this year. Although Ms Okonjo-Iweala has not formally declared that she will run for a second term, she is expected to stake her claim before or after the summer break, said people familiar with the development. Coincidentally, the DG selection process will take place at a time when the most important member, the United States, will have its election hustings to decide its next President. If the Republican candidate Donald Trump stages a comeback, then, it would be difficult to predict whether the Trump administration will back Ms Okonjo-Iweala’s candidature given their opposition to her in 2020. The former US Trade Representative Ambassador Robert Lighthizer, in an interview with the Financial Times, said that it would be a “mistake” to make the Nigerian candidate the WTO’s DG. It is commonplace knowledge that the Biden administration had supported Ms Okonjo-Iweala and was instrumental in making her the first female DG of the WTO in 2021. India would have concluded its own elections in the first week of June, to decide whether it would support Ms Okonjo-Iweala for a second term. New Delhi solidly supported her during the DG selection process in 2020. However, the contentious exchanges between the outgoing Indian trade minister Piyush Goyal and the DG at the concluding ceremony at MC13 in Abu Dhabi, particularly on the issue of the permanent solution for public stockholding programs for food security, may compel a change in India’s stand on her second term (see SUNS #9959 dated 5 March 2024). Against this backdrop, the DG told the FT on 27 March that she remains optimistic, saying that there would be “overall much more leeway and a more constructive approach” following the elections in the US and India. PROJECT SYNDICATE OPINION PIECE Curiously, the WTO’s press team recently shared an opinion piece in Project Syndicate on 28 March concerning the outcome of the recent WTO’s 13th Ministerial Conference (MC13). The opinion piece by the DG, titled, “WTO Reform Is Everyone’s Responsibility”, admits that MC13 “produced mixed results: a few successes, but also some disappointments.” She said, “By contrast, the previous ministerial conference held in June 2022, concluded with the adoption of numerous multilateral agreements and decisions, giving the WTO a temporary reprieve from its critics. Now the critics are back.” A thorough assessment of the results from the WTO’s 12th ministerial conference (MC12) in Geneva indicates that some important agreements remained on paper only, as the key outcomes on the extension of the MC12 Ministerial Decision on the TRIPS Agreement to COVID-19 diagnostics and therapeutics, the fisheries subsidies agreement (phase one that has been ratified by around 70 countries), dispute settlement reform that was intended to be concluded in 2024, and several other results have so far failed to materialize. In the opinion piece, the DG said that in addition to the usual North-South challenges, negotiations at MC13 had exposed “South-South tensions on certain issues.” She did not specify what these “South-South tensions” are. However, she added that “the differences among developing countries further complicate the WTO’s consensual approach to decision-making.” The above observation by the DG appears to be misleading, as the key Northern countries, namely, the United States and the European Union, were responsible for blocking decisions on the mandated issues of the permanent solution for public stockholding programs for food security, extension of the MC12 TRIPS Decision, and so on. She said, “WTO members of the African, Caribbean, and Pacific group, totaling 62 countries, aligned with developed countries and some emerging markets in supporting the extension of the moratorium on e-commerce tariffs for electronic transmissions.” The actual number of African, Caribbean and Pacific countries is well more than 62 and often they are referred to as the Group of 90 (G90) countries. The African Group comprises more than 50 countries and there was no consensus among the group’s members, who sought “digital industrialization”. More importantly, the MC12 mandate on the moratorium on customs duties on electronic transmissions clearly stated: “We agree to maintain the current practice of not imposing customs duties on electronic transmissions until MC13, which should ordinarily be held by 31 December 2023. Should MC13 be delayed beyond 31 March 2024, the moratorium will expire on that date unless Ministers or the General Council take a decision to extend.” Yet, privately, the DG lobbied for the continuation of the moratorium despite intense opposition from Indonesia, India, and South Africa among others. In the Project Syndicate opinion piece, the DG said that the continuation of the moratorium “was made possible, in part by developing countries that view the moratorium as beneficial to their services sectors.” However, this was not borne out by the developments on the last day of MC13. When India initially blocked the continuation of the moratorium, two emissaries – the chair of MC13, Dr Thani bin Ahmed Al Zeyoudi, the United Arab Emirates (UAE) minister of state for foreign trade, and the EU trade commissioner Mr Valdis Dombrovskis were sent to the Indian trade minister’s room to request India to allow the continuation of the moratorium. Later, the Indian trade minister told reporters that because of the request from the UAE minister, whom he considers as “a brother”, India has agreed to the continuation of the moratorium. However, Indonesia did not join the consensus even after India agreed and went on to resist till the last minute. It is not that the DG was totally unaware of the last-minute lobbying that took place on the night of 1 March at MC13. In the Project Syndicate opinion piece, the DG’s account of the negotiations on the permanent solution for public stockholding (PSH) programs for food security appears to be not consistent. That this is a mandated issue hanging in limbo since the WTO’s tenth ministerial conference (MC10) in Nairobi, Kenya, in December 2015, is well-documented, and that the US blocked an agreement at MC11, MC12, and now MC13, on intransigent grounds is also well known. In the run-up to MC13, Washington had said that it was a mistake to have concluded the interim solution on PSH at the WTO’s ninth ministerial conference in Bali, Indonesia, in December 2013. In fact, the US had agreed to the interim solution on PSH in return for the approval of the Trade Facilitation Agreement by India and a few other developing countries. Interestingly, at MC13, the Indian trade minister told the DG in a “green room” meeting of eight countries that she could have helped India on this issue. In her response, the DG said it is not for her to help India on this issue, and that it is for the members to decide, said several participants familiar with the negotiations at Abu Dhabi (see SUNS #9959 dated 5 March 2024). IFD In the Project Syndicate opinion piece, the DG openly came out in support of the Investment Facilitation for Development (IFD) Agreement. She said: “Lastly, 125 WTO members – representing three-quarters of the membership and including nearly 90 developing countries – used the plurilateral negotiating instrument to finalize the Investment Facilitation for Development (IFD) Agreement to eliminate bureaucratic barriers to domestic and foreign direct investment. This could save participating countries up to $1 billion a year in aggregate costs and make them much more attractive investment destinations. While work will continue in Geneva to insert the agreement into the WTO’s multilateral legal framework, there is no doubt that the IFD Agreement demonstrates that the WTO has innovative negotiating tools at its disposal to find common ground on topical issues.” The DG seems to have forgotten that the WTO is a rules-based, member-driven, and consensus-based inter-governmental organization. For any issue to be adopted, prior consensus is a sine qua non. Without prior consensus, it is illegal to pursue any issue at the WTO even if such an issue has massive support from countries backing it. The IFD issue has been repeatedly rejected since the WTO’s fifth ministerial conference in Cancun, Mexico, in September 2003. The DG’s position on IFD seems to indicate that rules do not matter for the sake of achieving an agreement. It is no wonder that such positions by the heads of inter-governmental organizations could lead to prolonged “lawlessness”. Moreover, it goes against the role and responsibilities of the DG as set out in paragraph 4 of Article VI of the Marrakesh Agreement that established the WTO in 1995. WTO REFORMS On WTO reforms, the DG said in the opinion piece: “While US leadership is still essential, meaningful reform will require other members, including emerging markets and developing countries, to take the lead and help steer the organization – over which they clearly exert real influence, as was obvious in Abu Dhabi.” However, it is the US and other industrialized countries that are blocking development-oriented reforms of the WTO. These countries are determined to do away with consensus-based decision-making – which is a cardinal principle stipulated in Article IX of the Marrakesh Agreement – in order to bring amorphous “responsible consensus” into the organization. The DG is aware of their designs but appears to remain silent on this issue. +
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