Ngozi Okonjo – Iweala and the World Trade Organisation

OUTSIDE THE BOX BY ALEX OTTI

“The single most exciting thing you encounter in government is competence, because it’s so rare” – Sen. Daniel Patrick Moynihan (1927-2003)

“Knowledge is great, Competence is great. But the combination of both encourages people to trust you and increases your powers of enchantment. And in this world, the combination is a breath of fresh air” – Guy Kawasaki

It is always refreshing to have Nigeria in the news for the right reasons. For several months now, our country has been the focus of intense media mention following the efforts of one of our very best to head the world’s highest body on trade, the World Trade Organisation (WTO). This eminent Nigerian is none other than Dr. Mrs. Ngozi Okonjo-Iweala (NOI). She was Nigeria’s Minister of Finance in the Obasanjo government and during the Jonathan administration, she was reappointed Minister Of Finance and Coordinating Minister of the Economy. Before then, she spent most of her working life at the World Bank, where she rose to become Managing Director. She earned her first degree from Harvard University and both her MSC and PhD from Massachusetts Institute Of Technology, both in the USA. She is from Abia State like Yours Truly and I can say, without any equivocation, that she is one of the Abia citizens genuinely worried about the contradiction and confusion that the state has become lately. Abia is, without doubt, a state that has produced some of the best minds and hands in the country. Painfully, the same state is this time, dealing with a leadership deficit to the point that it is almost a failed state. Today, Abia is reeling in rot and decay. It is practically a broken system with a parlous state of infrastructure. I recall a story NOI once told about when she brought the former World Bank President Robert Zoellick to Aba. As they were riding in the car together, she was embarrassed when the man thundered, I can understand that people are poor here, but must the place be this dirty?” Sadly, the story, rather than getting better, has got worse, but that is a story for another day.

The year 2020 can actually be compartmentalised into specific events like Coronavirus, crude oil market meltdown, EndSARS and lately, the WTO. In each of these, things rose to such frenzy that most other things were drowned out. In the case of the WTO, this week is when it finally makes landfall.

For context setting, the whole issue about trade assumed importance as the outcome of the economic theory of specialisation and division of labour. To maximise global productivity, the concept of global trade gave rise to the General Agreement of Tariff and Trade (GATT) in 1946 after the Second World War. It was the GATT that gave rise to the WTO founded on January 1, 1995. The main objective of WTO was to ensure that rules of trade between member countries are respected and that trade was not only promoted amongst member countries, but is smooth, predictable and free of hiccups and bottlenecks. With its headquarters in Geneva, the WTO is made up of 164 member nations who account for about 98% of world trade. With a staff strength of over 600, the organisation spends about $215m annually. The WTO had operated without a Director General (DG) since September 1, 2020 following the resignation of the 6th DG Roberto Azevedo effective August 31, 2020, a year before the expiration of his tenure.

His exit necessitated the search for his replacement and by the close of nomination on July 8, 2020, eight candidates from eight countries were nominated. The elimination process started based on the procedure already established by the council for picking a new DG. By October 28, 2020, Dr. Ngozi Okonjo Iweala was selected as the the better of the candidates who would secure consensus from the member countries. This followed a voting process by member countries where she polled 104 out of the 164 votes. Her candidacy was backed by China, Europe, Africa, and many other members. She was to proceed to the General Council for endorsement by November 9, 2020. A formal announcement to that effect had been made by the Chair of the General Council, Ambassador David Walker. Celebration had started in Nigeria and elsewhere as ordinarily, the meeting of November 9, would have just been a formal endorsement and announcement of the appointment, but that was not going to be. The US was to drop a bombshell later that day, objecting to the candidacy of Okonjo Iweala in preference for her closest rival Ms. Yoo Myung-hee of South Korea. The US gave two reasons for it’s action. The first is that NOI didn’t have the required trade experience while the second was that the selection process didn’t follow laid down procedure. Were these the real reasons or were they a smokescreen?

Before going further, we would like to recall that this is not the first time that the USA is standing against the candidacy of NOI. In 2012, when she presented herself for the position of the Presidency of the World Bank, the Obama administration blocked her and instead supported the South Korean-born Dr. Jim Yong Kim, who eventually secured the position and served as the 12th World Bank President between 2012 and 2019.
Turning to the the US allegation that the organisation didn’t follow procedure in the selection process, this has been found to hold no water as the procedure for the selection of DG is established in a WTO document reference WT/L/509 dated January 20, 2003 and was on the contrary, followed, except for a clause which requires that the search of a new DG should commence 9 months before the expiration of the tenure of the incumbent. Given that the incumbent resigned before his tenure expired, this nomination couldn’t have started at the prescribed time. One also considers this, inconsequential when viewed alongside important issues central to choosing a credible candidate for the role. The other point raised by the US for not supporting Dr. Okonjo-Iweala’s candidacy is that she is not experienced for the role. We consider this very preposterous and certainly deserves no response. Those not familiar with her are encouraged to access and read her resume to assure themselves that no other candidate bidding for the WTO job came to the table with better credentials. So what could be the real reasons for the US action? Different reasons have been adduced by different analysts. We shall explore these in turn.

With President Trump’s rhetoric and actions, some people have advanced the racist theory. It is not difficult to buy into this theory given the antecedents of Washington but then NOI acquired US citizenship last year, even though acquiring US citizenship does not remove anything from the fact that she is a black Nigerian and she is also being sponsored by Nigeria. Added to this is the gender issue which many people even though may not admit, are still sensitive to. Some people may not stomach the fact that she is not only black but was going to emerge as the first female to occupy that position. However, this theory falls flat on its face when once realises that the candidate the USA is backing is also female.

The US – China trade war has also been adduced as the unspoken reason why the US decided to withhold accent to her candidacy. The argument is that since Donald Trump became President, he has been in a running battle with China over what he refers to unfair trade practices by China. He argues that China deliberately holds its currency value down in order to dump cheap goods on America, thereby weakening productivity in America. He had also accused the WTO of being ineffective and would ordinarily not support any candidate supported by China. His fears are that NOI would push policies favourable to China at the detriment of US interest. Also, being that she is being sponsored by Nigeria which has increased its trade and business relations with China, she came out on the bad side of the US. Again, it is argued in some quarters that Nigeria is an insignificant member of the WTO and therefore has very little stake in the organisation and would not exert so much influence on what happens at the WTO.

Out of all the theories, the one that looks more plausible has to do with the battle between globalisation and protectionism. When people hear Trump scream, ‘America First’ or ‘Make America Great Again’, what he really means is that globalization has hurt America and the time has come for Protectionism. In the past, there had been increasing push towards globalisation and that is the whole reason behind the formation of the body in the first place. The world economy, however, seems to be headed towards more domestication and protectionism. So, rather than pushing globalisation, Trump has been pushing more of protectionism. Matters have not been helped by the Coronavirus Pandemic which disrupted global supply chain and exposed America and the the rest of the world to supply vulnerabilities. In fact, it was only China that managed to keep its factories open. So some parts of the world is rethinking the globalisation strategy. Based on her antecedents, NOI is seen to be a candidate that would push more globalisation than protectionism. The US cannot afford to take the risk. In fact, the WTO seems to have been a toothless bulldog in the recent times because the interests of member nations do not seem to align on the issue of globalisation. Instead of common trade agreements that will harmonise tariffs, what is seen are regional and bilateral agreements that seem to stand in contradiction with the WTO. The US seems to trust the South Korean candidate more as she had done things in the past that seem to push protectionism. The US seems to also be safer with her because of the position of her country which is in complete alignment with its interest. Supporting her against a popular candidate like Okonjo Iweala would give the US some advantage in that she would be expected to be very loyal to the US without which, she wouldn’t have emerged.

Given the scenario above, what are the options open to Dr. Ngozi Okonjo-Iweala?. The first is for Nigeria, leading Africa, to get Ms. Yoo Myung-hee to withdraw from the race. This cause of action is what is recommended in the procedures manual cited above. It specifically requires that contending candidates withdraw at each stage they realise that they cannot attract consensus. However, expecting her to withdraw is looking far fetched as the day draws near. Besides, the fact that a member like the powerful USA is behind her is enough moral booster for her and it would be a tough order for her to just withdraw. Nevertheless, there is enough South Korean interest to guarantee by the African lobby team to get a concession from them and their candidate.

The next option is for the US to withdraw her support for Ms. Myung-hee and move same to NOI. This can happen if sufficient pressure is brought to bear on the US or in the event that Trump loses the November 3 election to Joe Biden. Some pundits have argued that even if Trump loses, there is no guarantee that Biden would not continue with the present position of the US as his silence may mean that he does not disagree with Trump on this matter.

The sure direction is that November 9 would come. On that day NOI would be presented as the candidate that is more likely to have a consensus built around her. If any of the above considered scenarios do not play out, the US will definitely make an attempt to block it. When all else fails, the General Council would be left with the only option of dividing the house and activating clause 20 of the Procedures document which calls for voting. It is important to note that in its 25 year history, this clause has never been activated and no one has been selected without consensus. The clause states that in the unlikely event that this clause is activated, it should not be seen as a precedent, but as a last resort. If this happens, Dr. Okonjo Iweala will win majority of the votes, all things being equal. However, there may be likely backlash amongst which may be that the US and some of its allies may pull out of the WTO. This is a scenario that Trump has no qualms about. After all, he had the boldness to pull out of the World Health Organisation (WHO), during the ongoing Covid-19 pandemic. Should this happen, it would leave a big dent on the organisation that may eventually sound the death knell on WTO, except if it is properly and delicately managed.

Anyhow it pans out, we salute the courage and tenacity of Dr. Ngozi Okonjo Iweala. She is a true Nigerian heroine. She has done very well. Even if at the end of the day, she does not succeed in getting the job, she has fought the good fight. She stood where others failed. She has made every African, Nigerian and woman very proud. We wish her success as we approach November 9. Well done Ada Ukwu. One final word though is that while you fight for the global office, spare a thought for your dear state, Abia. The proverbial grieving bird is still crying.