Dr. Ngozi Okonjo Iweala’s WTO Appointment as New Director General Hits Speed Bump

The World Trade Organisation is currently engaged in frenzied activities to ensure Nigeria’s Dr. Ngozi Okonjo-Iweala, who came tops in the election process having secured cross-regional backing against strong US’ opposition, is given the job she deserves. Nosa James-Igbinadolor looks at why the U.S is opposing the candidacy of Nigeria’s two-time finance minister, and why she will surmount the challenge and win again

For a few keen observers of the unending hunt for a new Director-General of the World Trade Organisation (WTO), the hurriedly organised meeting in mid-October, in Abuja, between Nigeria’s candidate and former Finance Minister, Dr. Ngozi Okonjo-Iweala and President Muhammadu Buhari did not smell so aromatic.

While the agenda between the President and the former Minister of Finance and Coordinating Minister for the Economy wasn’t publicly declared, a statement issued by the Senior Special Assistant to the President on Media and Publicity, Garba Shehu, proclaimed that President Muhammadu Buhari assured former Minister of Finance, Ngozi Okonjo-Iweala, that the Federal Government will do all within its power to ensure that she becomes the Director-General of World Trade Organisation (WTO) as the country will push until she wins.

“I assure you that we will do all that we can to ensure that you emerge as the Director-General of WTO, not only because you are a Nigerian, but because you are a hardworking Nigerian. You deserve this,” Mr. Buhari had said

He assured Dr. Okonjo-Iweala that he would make more phone calls and send letters to some world leaders for more support.

What is now obvious from the tenor and setting of the hurriedly arranged meeting is that there was a recognition at that time by Dr. Okonjo-Iweala and her team of the looming threat to the country’s desire to assume the leadership of the WTO from the United States.

US Trade Representative Robert Lighthizer critical of the WTO’s handling of global trade, has been pushing for South Korea’s candidate, Yoo Myung-hee, even though Okonjo-Iweala gained US citizenship in 2019.

Sources close to Mr Lighthizer say he views Dr. Okonjo-Iweala as being too close to pro-trade internationalists in Washington like Robert Zoellick, a former U.S Trade Representative who worked with Ms Okonjo-Iweala when he was president of the World Bank.

A source told THISDAY that at the meeting with the President, Dr. Okonjo-Iweala, a former World Bank Managing Director impressed on Buhari, the need for the President to push harder on her candidacy by engaging further and concretely with world leaders through letters and phone calls.

The push partially worked. The former finance minister, received a key endorsement on Wednesday October 26, from the WTO selection committee, which moved her a step closer to becoming the WTO’s first female director-general. However, the four-month selection process to find the next WTO director-general hit a road block when Washington said it would continue to back the South Korean trade minister.

The US could not support a consensus decision to appoint Okonjo-Iweala, Deputy US Trade Representative Dennis Shea said during a meeting of WTO delegates in Geneva. Mr Shea said the US disagreed with the way in which the process was being carried out.

In a statement critical of the WTO, the Office of the US Trade Representative, which advises President Donald Trump on trade policy, said the organisation “must be led by someone with real, hands-on experience in the field”.

Ms Yoo had “distinguished herself” as a trade expert and “has all the skills necessary to be an effective leader of the organisation”, the statement said.

It added: “This is a very difficult time for the WTO and international trade. There have been no multilateral tariff negotiations in 25 years, the dispute settlement system has gotten out of control, and too few members fulfill basic transparency obligations. The WTO is badly in need of major reform.”

William Reinsch, a former senior Commerce Department official now with the Centre for Strategic and International Studies told Reuters that the U.S. move was likely to worsen trade tensions already running high within the WTO.

“It’s very Trumpian. They’re basically saying ‘We want to get our way and we’re willing to throw sand in the gears if we don’t get it’,” he said, adding that it was possibly a bid to gain concessions in other disputes.

U.S President Trump has in the past described the WTO as “horrible” and biased towards China, and some appointments to key roles in the organisation have already been blocked.

Nigerian officials and Dr. Okonjo-Iweala’s team continue to meet and engage with global leaders to solidify her candidacy against vigorous U.S opposition. A statement from the Federal Ministry of Investment, Trade and Industry last week announced “Nigeria is currently reaching out to all members of the WTO including the United States and South Korea to overcome the impasse as well as persuade the United States to join the consensus.”

The ministry said the WTO’s 164 member states were expected to adopt Okonjo-Iweala as the organization’s director-general by consensus, but the United States was the sole country to oppose her, flouting the organisation’s rules.

At the end of last week, President Buhari had spoken to the President of the European Council, Charles Michel, who reiterated Europe’s support for Dr Ngozi Okonjo-Iweala bid, to become the next Director-General of the World Trade Organisation (WTO). The Nigerian government further announced that it was reaching out to the United States and other members of the WTO to clear all bottlenecks to the emergence of Okonjo-Iweala as DG.

It is unlikely that high stakes diplomacy by Nigeria would change the strong position of the United States. One of the U.S’ foremost fears, is the strong and economic relationship between Nigeria and China. The U.S and institutions close to it have consistently warned the country to be wary of China’s economic and political relationship. Former U.S Secretary of State, Rex Tillerson, in 2018, told African countries to be wary of the Chinese government and its loan facilities. Mr. Tillerson warned that African countries should weigh Chinese loans carefully, saying that China “encouraged dependency, utilised corrupt deals and endangered Africa’s natural resources.” In 2019, the IMF urged Nigeria to curb its large appetite for Chinese loans as the country struggles with a €70 billion debt burden.

The U.S considers the latter to be its main economic and commercial rival and the major threat to its hegemony. Most economists estimate China will overtake the United States as the largest economy in 10 to 15 years. And some senior officials in Washington now view China as a steely ideological rival.

The National Security Strategy issued by the White House in December 2017 sounded the alarm: The United States was re-entering an era of great power competition, in which China and Russia “want to shape a world antithetical to U.S. values and interests.”

In late October, The U.S. State Department directed some of its local embassy officials in a diplomatic cable to gauge whether their host country supports selecting South Korean Trade Minister Yoo Myung-hee to be the next director general of the World Trade Organization, according to U.S magazine, POLITICO. The cable directed U.S. diplomats to attempt to gauge where their host governments stood on the race for WTO chief, and that if they didn’t have a commitment or a decision, to gently nudge them to back Yoo rather than Okonjo-Iweala.

According to a retired Nigerian diplomat and former National Security official, “there is nothing cast in stone about the U.S position. It is most likely that at the end of the day, a deal would be done between the U.S and Dr. Okonjo-Iweala; a deal that recognises the U.S trade position by the former Minister…Every country acts in its own national interest and once the U.S interest is taken on board by Dr. Iweala, I do not see why the U.S would continue their opposition to her candidacy”.

He added that the U.S might also be miffed by the former Nigeria Finance Minister’s run for the position of President of the World Bank in 2012 and 2019, despite the unspoken rule that the United States always produces the Bank’s president.

In 2019, the Dr. Okonjo-Iweala announced she would consider the post “if nominated to the position and if the circumstances are right.”.

Speaking to CNN’s Richard Quest at the World Economic Forum in Davos, Switzerland Thursday, Okonjo-Iweala said she would run but only under the right conditions.

“I know that because I contested the last time in 2012… many people were asking that question,” she said.

“It is a shareholder’s decision and they have to decide how they want it. Someone has to nominate. If the right person were to nominate, and if the circumstances are right and people feel I can do the job, yes!”

Dr. Okonjo-Iweala’s candidature in 2012 was the first time a challenge was mounted to the US nominee in the institution’s history.

According to the former Nigerian official, “the current U.S position regarding her aspiration to run the WTO might just be their own way of paying her back for trying to break the long-standing agreement about U.S leadership of the World Bank”.

An impasse in the WTO leadership race wouldn’t likely bother President Donald Trump, who has blasted the Geneva-based organization as a tool for globalists who allowed China’s economic rise to go unchecked.

If Trump wins the U.S. election next week, his aides have indicated they plan to continue to reshape the WTO with a narrower scope to resolve trade disputes.

If it’s not possible for the general council to agree on a consensus candidate, WTO members can consider the possibility of recourse to a vote as a last resort by a procedure to be determined at that time. Such a development would be unprecedented for the WTO.

It is expected that at the end of the day, Dr. Ngozi Okonjo-Iweala would be selected to run the WTO over U.S objections. This decision would become even more easier if Mr. Trump loses the election in November to Joe Biden.

While the next few days are uncertain, what is certainly obvious is that members of the WTO would continue to engage in feverish activities to ensure that a candidate is selected on November 9.

If Dr. Okonjo-Iweala is eventually appointed she will have a full in-tray, chief among which would be assuaging the hurt feelings of the United States.

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