The Next WTO Chief Treads a Fine Line Between the U.S. and China
(Bloomberg) -- The race for the top post of the World Trade Organization is often characterized as another key battleground in a U.S. versus China struggle for hegemonic supremacy.
That may be a bit overblown, but there’s certainly a ring of truth to it just a few weeks into the contest.
The Trump administration’s core gripe with multilateral bodies like the Geneva-based WTO is that they are beholden to unfair foreign influence -- particularly from China -- which results in policies that harm America’s interests.
The argument is not dissimilar to the rationale President Donald Trump offered this month when he announced America’s withdrawal from the World Health Organization.
China, meanwhile, has engaged in a multi-year campaign to expand its diplomatic influence and install key personnel at the top levels of international decision-making bodies like the International Telecommunication Union, the United Nations’ Food and Agriculture Organization, and the International Civil Aviation Organization.
U.S., China Battle
The U.S. has sought to blunt this effort, most recently by displacing a Chinese candidate who was vying to become the director-general of the World Intellectual Property Organization with a more Western-friendly candidate from Singapore, Daren Tang.
“That was a huge priority for me and my mission leading up to that election,” said U.S. Permanent Representative to the UN Andrew Bremberg, “Tang soundly defeated the PRC-backed candidate,” Bremberg said in an interview.
If the WIPO race is any indicator of how the WTO race will proceed, it’s important to look at which qualities the U.S. and China are said to be seeking in the next director-general.
In June, U.S. Trade Representative Robert Lighthizer established a three-part test for the best candidate to lead the WTO.
Specifically, they must:
- Understand the need for “fundamental” reform of the WTO;
- Recognize that China cannot currently be dealt with in the WTO;
- Not have a “whiff” of anti-Americanism in their background.
Insider Vs. Outsider
At this early stage in the race, there are two candidates that have attracted the most attention from trade delegates in Geneva: Kenya’s Amina Mohamed and Nigeria’s Ngozi Okonjo-Iweala.
Both are accomplished African women with political stature -- but their similarities end there.
Mohamed is a genuine WTO insider, having served as a trade delegate in the 2000s; as chair of the WTO general council, dispute settlement body and trade policy review body; and as the chair of the WTO ministerial conference.
Her lengthy WTO experience could be negative for the Trump administration because it symbolizes a perpetuation of system that the U.S. argues is broken and needs fundamental reform.
Furthermore, Mohamed has equivocated on the issue of China’s development status and the U.S.-China trade conflict in general. That could also be a problem for the U.S., which sees both issues as critical factors in its approach to WTO reform.
In contrast, Okonjo-Iweala has never served at the WTO in any capacity. She argues that her outsider status is a strength because she can bring a ”clear set of eyes” to deeply dysfunctional organization.
In addition, Okonjo-Iweala possesses an array of other qualities that may endear her to the U.S. She has a strong record as a reformer during her two stints as Nigeria’s finance minister, she’s called on nations to move off their negotiating red lines, and she supports new WTO rules on industrial subsidies -- something the U.S. is also keen to see.
As for China, it’s not exactly clear which candidate Beijing prefers.
This month, China’s ambassador to the WTO, Xiangchen Zhang, said that a key criterion for the next director-general will be his or her “firm belief in the multilateral trading system with strong determination and adequate ability to bring WTO members together.”
“We need someone who can shoulder pressure from the non-believers and march on,” Zhang said during a webcast discussion hosted by the Washington-based Peterson Institute for International Economics.
If Zhang’s response sounds vague, it is not an accident.
China is intentionally holding its cards close to its chest in order to avoid American opposition to its preferred candidate.
That’s because if Beijing were to become suddenly vocal about any candidate, it’s likely the U.S. would dedicate itself to sinking China’s preferred choice, just as the Trump administration did during the WIPO race.
Zhang acknowledged as much in his interview: “I have to be very careful at this moment because I want to be fair to each of the eight candidates.”
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