Ngozi Okonjo-Iweala, newly elected Director-General of the WTO, in an interview with Reuters on Feb. 15, 2021
The new director general of the WTO will take the helm of the organization next month. Critics say that from the experience of the elected director-general, Oconcho Iveara, it is difficult to see how she can do much about the major reforms needed in the WTO; and her appointment will not do much to ease trade tensions between the United States and China.
Ngozi Okonjo-Iweala, a leading economist, was named director general of the World Trade Organization on Monday (Feb. 15), becoming the first woman ever to lead the WTO and the first African citizen to hold the post. Okonjo-Iweala’s term began on March 1 of this year and runs until August 31, 2025.
Will Okonjo-Iweala be up to the task?
Okonjo-Iweala, who graduated from Harvard University and later received her PhD from MIT, has served as Nigeria’s finance minister and has been with the World Bank for 25 years.
Last October, she was nominated as one of the candidates for the WTO director general, supported by the vast majority of member countries except the United States, but opposed by then-President Trump. When President Biden took office, he abandoned the U.S. opposition position. Biden announced not long ago that the U.S. supports Okonjo-Iweala as the WTO director general.
Some analysts believe that the WTO, with Okonjo-Iweala as director general, clears a major obstacle to the proper functioning of the organization. Previously, the WTO was in a state of limbo amid global economic turmoil brought on by the global pandemic of the Chinese Communist virus and the prevalence of global trade protectionism.
U.S. Chargé d’affaires to the WTO David Bisbee (David Bisbee) recently told Reuters that the United States is committed to “positive, constructive and active engagement” with all members of the World Trade Organization to promote reform of the WTO.
Bisbee’s statement is seen as an early indication of how President Biden plans to negotiate with the WTO, in stark contrast to former President Trump’s position.
Alan Tonelson, a veteran economic and trade analyst and founder of the public policy blog RealityChek, told VOA that although Okonjo-Iweala’s background appears to be experienced, her background is focused on the less economically developed regions of Africa. Therefore, it is not clear whether she can take charge of the operation and reform of the WTO at the moment.
According to Tonarson, Okonjo-Iweala does have extensive experience in promoting third world economic development, which is one of the main tasks of the WTO. But she has no other experience in promoting trade liberalization, the other major mandate of the WTO, other than her experience in economically marginalized sub-Saharan Africa.
“It is therefore difficult to see how she can make any significant contribution to identifying the major reforms needed at the WTO and mobilizing support for them among the organization’s members. At the same Time, as with other major international organizations, the WTO director general usually has little influence and very little power,” Tonelson said.
Will Beijing‘s support influence WTO reform?
The Chinese government has also expressed enthusiastic support for Okonjo-Iweala’s election as WTO director general and has expressed “full confidence” in her at the helm of the organization.
As a responsible developing country, China will firmly support the multilateral trading system, actively participate in WTO reform, and take practical action to support the Director-General in her work so that the WTO can make a greater contribution to improving the global governance system and enhancing the well-being of the world’s people,” a Chinese Ministry of Commerce official told the media. “.
Washington has been strongly critical of Beijing’s performance since joining the WTO and is concerned about its growing influence in many other international organizations under the UN framework. Critics worry whether Beijing’s strong support for the WTO and its new leaders will undermine the reforms to the WTO that Washington has been hoping for.
There is concern that even now the new WTO director general, who has the backing of the Biden Administration; but the WTO was established in 1995 to maximize smooth and free trade, and China is defined as a developing country being biased in the organization, and the WTO still faces serious challenges to its effectiveness as an arbiter of trade disputes.
Wendy Cutler, former deputy U.S. trade representative and deputy director of the Asia Society Policy Institute, recently told the New York Times that the WTO faces many issues that need reform, and that the Biden administration’s support for a new director general could be “an easy way to get good hope and get every member of the organization to focus on these important substantive issues. An easy way to do that.
Former President Trump has spent the last four years criticizing the World Trade Organization and instead of working with the WTO, he has dealt one-on-one with other trading partners such as the Chinese Communist Party and the European Union, and has imposed huge tariffs on each other. The Chinese Communist Party and European governments, among others, have criticized Trump’s tariff policies, which violate the World Trade Organization’s rules.
According to Tonelson, a veteran trade and economic analyst, given President Biden’s line that Washington enthusiastically supports and is committed to multilateralism whether or not it actually serves U.S. interests; and Beijing’s support for and confidence in Okonjo-Iweala just shows that Beijing believes the new Biden administration will acquiesce to WTO policies and return it to its reckless seizure of Beijing in trade and the broader economy and The new administration’s support for and confidence in the WTO is an indication of Beijing’s confidence that the new Biden administration will acquiesce to WTO policies that return it to its old path of unbridled capture of Beijing in trade and the broader economy.
“In the current situation, the future of the WTO will depend in large part on whether President Biden is serious about pushing for reform; in other words, leaving aside the implications for U.S. interests, on whether Biden will see restoring WTO regulations and norms as his top priority,” he said.
Will WTO reform ease U.S.-China trade tensions?
Many U.S. trade experts believe the main reason why former President Donald Trump threw out the WTO and engaged in a one-on-one trade war with the Communist Party of China during his presidency is that while the World Trade Organization has greatly promoted globalization and free trade since its inception, it has not done a good job of fulfilling its important role of resolving disputes.
William Reinsch, a trade expert at the Center for Strategic and International Studies (CSIS), a Washington think tank, recently told the media that Okonjo-Iweala, who took charge of the WTO, must reaffirm the organization’s three main functions: negotiations, dispute settlement and enforcement measures to serve. At present, the WTO “these three functions are largely failures”.
“Louw Nel, a senior political analyst at NKC Africa Economics, a division of Oxford Economics, also told the media that the Trump Administration has often disparaged and questioned the role of the WTO and accused the organization of favoring China. Nel said the U.S. also opposes the positioning of the Chinese Communist Party as a developing country. The positioning of the Communist Party as a “developing country” has given it special treatment in WTO agreements.
Tonelson, founder of the public policy blog RealityChek, told VOA that the arrival of a new WTO director general may have little impact on easing U.S.-China trade tensions. If Okonjo-Iweala’s tenure as director general has had any impact on U.S.-China trade tensions, it has been minimal at best.
“The big uncertainty at this point is whether Biden will broadly continue Trump’s unilateral approach of huge tariffs and huge sanctions, or whether he will continue the appeasement and enabling policies of the United States toward the Chinese Communist Party before Trump took office,” he said.
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