By Jeph Ajobaju, Chief Copy Editor
Ngozi Okonjo-Iweala is gearing up to mount the saddle at the World Trade Organisation (WTO) with support from the new United States administration under President Joe Biden who removed the road block created by Donald Trump.
South Korean Trade Minister, Yoo Myung-hee, in a televised briefing on February 5, announced her decision to withdraw from the contest for the director general’s job after which the US endorsed Okonjo-Iweala.
Yoo said her decision had been reached after “close consultation” with the US. The WTO had been without a leader for too long, she added.
Okonjo-Iweala, an economist, already enjoys broad support from WTO members, including the European Union, China, Japan, and Australia.
The WTO plans to hold a meeting in the coming days where its members will consider a final decision on her candidacy.
If none of the 164 members oppose her, she will be appointed for a four-year term, with a possible four-year extension in 2025.
The US Trade Representative’s office said in a statement that Okonjo-Iweala “brings a wealth of knowledge in economics and international diplomacy from her 25 years with the World Bank and two terms as Nigerian finance minister.
“It is particularly important to underscore that two highly qualified women made it to the final round of consideration for the position of WTO Director-General – the first time that any woman has made it to this stage in the history of the institution.”
Okonjo-Iweala, who has a dual Nigerian-American citizenship, reacted on Twitter, saying: “Grateful for the expression of support from the US today for DG. Congratulations to Madam Yoo of Rep. Korea for a hard-fought campaign. Thank You. President Muhammadu Buhari & all Nigerians for your unflinching support. Thank you, friends. Love to my family. Glory to God.”
A leader for these times
The WTO, based in Geneva, is tasked with promoting free trade but has been without a permanent director general since Roberto Azevêdo stepped down a year earlier than planned at the end of August after the WTO was caught in the middle of an escalating trade fight between the US and China.
CNN recalls that the Trump administration was highly critical of the WTO and undermined its standing by imposing tariffs on Canada, Mexico, China and the European Union.
Okonjo-Iweala will thus assume control of an organisation that has struggled to prevent trade spats between its members, the broadcaster added.
Biden has already taken steps to restore support for multilateral institutions, he is expected to proceed with caution when it comes to signing any new trade deals.
Okonjo-Iweala told CNN in August that trade would play an important role in the recovery from the coronavirus pandemic.
“The WTO needs a leader at this time. It needs a fresh look, a fresh face, an outsider, someone with the capability to implement reforms and to work with members to make sure the WTO comes out of the partial paralysis that it’s in,” she said in an interview.
She spent 25 years at the World Bank as a development economist, rising to the position of managing director. She also chaired the board of Gavi, which is helping to distribute coronavirus vaccines globally, stepping down at the end of her term last December.
Shaking things up
Bloomberg adds in the report below that the incoming head of the WTO is known for shaking things up and holding power to account, which will come in handy in her new role.
During her effort to root out corruption during her first stint as Nigeria’s finance minister, opponents of her plans nicknamed her “Okonjo Wahala” – “Okonjo the trouble maker.”
The 66-year-old development economist embraces the moniker and true to form, trouble was what she withstood campaigning for the WTO job.
Finding herself on the wrong side of the Trump administration, her lack of trade-negotiating experience made her the target of a unilateral US veto despite the endorsement of the organisation’s selection committee and almost all other member nations.
Now, with Biden’s administration’s blessing after the only other candidate withdrew, Okonjo-Iweala is poised to become the first woman and the first African to lead the WTO in its 25-year history.
She will also be the first American citizen to hold the WTO top job.
“She is this wonderful, soft, very gentle woman with an authentic approach to problems but, boy, under that soft glove there is a hard hand and a strong will behind it,” European Central Bank President Christine Lagarde said in an interview. “She is going to rock the place.”
Crisis credentials
The WTO badly needs to be shaken up. All three pillars of the trade body’s work are under threat. Its usefulness has been called into question as China’s brand of state capitalism increases its footprint on the global economy, fomenting criticism from Brussels to Brasilia.
The organisation has struggled to produce meaningful multilateral agreements, its trade-monitoring function consistently underperforms and Trump neutralised the WTO appellate body in late 2019.
With a budget last year totaling $220 million and a staff of more than 600, it has become a toothless bureaucracy during the most disruptive period for international commerce in generations.
Add the pandemic to the turmoil, and the WTO’s most substantive work was ground to a near standstill last year and spurred its previous director general to quit unexpectedly.
Lengthy agenda
Okonjo-Iweala has pledged to find common ground among the trade body’s disparate membership.
She hopes to score some early negotiating wins – such as a multilateral accord to curb harmful fishing subsidies – as a means to restore trust and build momentum for larger deals.
She’s also optimistic about prospects for an agreement to govern the $26 trillion global e-commerce marketplace, which could reduce cross-border hurdles for US technology companies like Facebook Inc., Apple Inc., Amazon.com Inc., Netflix Inc., Alphabet Inc. and Microsoft Corp.
During her campaign for the job, Okonjo-Iweala portrayed herself as both a trade outsider and a power broker in global finance, pointing to a 2005 agreement she helped secure to write off $18 billion of Nigeria’s debt to the Paris Club, a group of mostly Western government creditors.
She persuaded skeptics – like former US President George W. Bush – that despite the high price of crude at the time, Nigeria’s $25 billion in oil revenue only amounted to 50 cents a day for each Nigerian, and debt relief was necessary to put Nigeria on the right track.
“The way she brought about the debt deal was incredible,” said David de Ferranti, who worked with her at the World Bank. “Very few people could have done that.”
Okonjo-Iweala graduated magna cum laude from Harvard University in 1976 and earned her doctorate in economics from the Massachusetts Institute of Technology in 1981.
After moving to Washington, she quickly rose through the ranks at the World Bank and in 2013 was named managing director – the organisation’s highest unelected position.
Until recently, she served as the board chair at the Global Alliance for Vaccines and Immunisation, an experience that could help the WTO navigate the health and economic implications of the Covid-19 pandemic.
“She will bring a different kind of global perspective to the WTO than anyone before her,” former Australian Prime Minister Julia Gillard said in a phone interview. “She has a global view of challenges and problems and is insightful about solutions.”
Tough reforms
During her two terms as Nigeria’s top finance official, Okonjo-Iweala helped stabilise one of the world’s most volatile economies by leading significant reforms to the country’s energy-based economy.
The issues she confronted in that role were politically thorny, economically ponderous and personally dangerous.
Her efforts led to death threats from entrenched interests and in 2012 a group of kidnappers – frustrated by Okonjo-Iweala’s efforts to fight corruption in Nigeria’s oil industry – abducted her 83-year-old mother and demanded she resign immediately.
She immersed herself in work and recalled the advice of her father – a Nigerian king – who told her as a child to “never allow anyone to intimidate or blackmail you.” Ultimately, her mother survived the ordeal.
A fresh approach
As the WTO’s next director-general, Okonjo-Iweala is going to need fortitude and persistence.
Among the most significant challenges before any repair work begins: undoing the deep level of mistrust between rich economies and those of the developing world.
That bad blood has given rise to protectionism – the antithesis of the WTO’s mission of “open trade for the benefit of all.”
Okonjo-Iweala is aware that a big part of her job will be refereeing the trade battles between the China and the West.
“You have developed-country members who believe they have borne the burden of liberalisation – too much of it – and that maybe advanced developing countries have maybe not borne enough,” she told Bloomberg in a phone interview.
“I’ll be listening to the developed countries, listening to the advanced-developing countries and the least-developed countries and asking ‘Where is there common ground?’”