How Okonjo-Iweala Became the First Female WTO Leader
(Bloomberg) -- Members of the World Trade Organization selected Ngozi Okonjo-Iweala as their director-general, making the 66-year-old Nigerian developmental economist the first woman and the first African to lead the WTO. The appointment came at a critical moment for the body, which has been confronting the most turbulent period of its 26-year existence. Backed by the U.S., EU, Japan and China, world leaders hope Okonjo-Iweala can help steer the WTO out of its negotiating morass and make it fit to govern the modern global trading system.
1. What’s at stake?
The Geneva-based WTO’s mission of economic integration is under threat from protectionist policies around the globe, and without reform it risks being sidelined during the biggest economic crisis in a century. The world’s largest economies agree that the organization must evolve to address the shifts in technology and the global trading system that have occurred since 1995. A new director-general could break bureaucratic logjams and help unleash a wave of global growth at a time when it is needed most.
2. What precipitated the crisis?
On Aug. 31, 2020, the WTO’s former director-general, Roberto Azevedo, stepped down a year before his term was scheduled to end. Azevedo said he was resigning early because there was “nothing happening” at the WTO and the best way to avoid more chaos was for him to step aside. His surprise departure, announced earlier in the year, kicked off a hasty process to replace him, resulting in the organization becoming leaderless from September and being collectively governed by a group of four unelected deputy directors-general. Before his departure, the WTO’s appellate body, the main forum for settling worldwide trade disagreements, had lost its ability in December 2019 to rule on new dispute cases. That resulted from the refusal of then U.S. President Donald Trump’s administration over the previous two years to consider any nominees to fill vacancies on the panel.
3. Who did WTO members select?
The chairman of the WTO general council launched a selection procedure in June 2020 to confirm the trade body’s next director-general, holding confidential consultations with each of the WTO’s 164 members and narrowing the field of candidates. In October the WTO’s selection committee said Okonjo-Iweala “clearly carried the largest support by members” and “enjoyed broad support from members from all levels of development and from all geographic regions,” but the Trump administration initially blocked her appointment.
4. Who is Ngozi Okonjo-Iweala?
She served two stints as Nigeria’s finance minister and one term as foreign affairs minister. She is also a U.S. citizen who graduated magna cum laude from Harvard University and earned her doctorate in economics from the Massachusetts Institute of Technology. She had a 25-year career working at the World Bank and in 2013 was named managing director -- the organization’s highest unelected position. She was chair at Gavi, the Vaccine Alliance, until December 2020 -- an experience which provides her with a unique perspective on how global trade can help facilitate the roll-out of vaccines and other critical tools needed to combat the Covid-19 pandemic.
5. Who backed her?
All major trading nations, including the European Union, China, and -- critically -- the United States. On Feb. 5 the new administration of U.S. President Joe Biden agreed to support Okonjo-Iweala’s candidacy, reversing the U.S. position three months after the previous Trump administration had vetoed her. Robert Lighthizer, who was U.S. Trade Representative under Trump, said he opposed Okonjo-Iweala’s candidacy because she had no experience in trade. While it’s true Okonjo-Iweala has never been a trade minister or a WTO delegate, she ran her campaign as outsider, arguing that she could bring a “clear set of eyes” to a deeply dysfunctional organization. The WTO’s members unanimously backed Okonjo-Iweala’s candidacy at a virtual meeting on Feb. 15, appointing her as director-general from March 1. She can seek to renew her term after it ends on Aug. 31, 2025.
6. What have nations been looking for?
Governments hope she can persuade members to complete a much-needed reform of the organization. Trade officials in Geneva broadly argue that the role requires sufficient leadership authority and capability to marshal broad support around the WTO’s reform agenda. Okonjo-Iweala has pledged to take an active role as director-general and to act as a sounding board to try to find common ground among the trade body’s disparate membership.
7. Were there any other considerations?
Okonjo-Iweala will need to seek to build a diplomatic bridge between the U.S. and China, whose bitter conflict over an array of issues including technology and the pandemic is testing their fragile economic truce. The former Trump administration actively sought to undermine the WTO’s ability to function, saying it infringed on American sovereignty and enabled China to become a big economic player globally at the expense of U.S. jobs and manufacturing. Meanwhile, China has engaged in a multi-year campaign to expand its diplomatic influence by installing key personnel at the top levels of international decision-making bodies. Few, if any, expect U.S.-China trade tensions to subside under Biden, but he has pledged to work with allies like the EU to address their common threats.
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