By Leah Crag-Chaderton & Nicholas Lazarus
On October 28th 2020, at a Heads of Delegations (HOD) meeting, Ambassador David Walker recommended that Ngozi Okonjo-Iweala be appointed as the new Director-General (DG) of the World Trade Organization (WTO) following the conclusion of the third and final individual consultations with Member State delegations on October 27th. The recommendation followed intense reviews by the troika (General Council (GC) Chair David Walker, Ambassador Dacio Castillo of Honduras, and Ambassador Harald Aspelund of Iceland) after which an assessment was made that Okonjo-Iweala was the candidate “most likely to attract a consensus” among the Member States since she “clearly carried the largest support…and enjoyed broad support from Members from all levels of development and geographic regions”.
Under normal circumstances – and indeed in the history of the organization – the DG selection process would then culminate in confirmation by all the WTO Member States approving the recommendation of the GC Chair at a GC meeting. However, the United States of America (US), in a move that continues a recent trend of breaking consensus, formally objected to Okonjo-Iweala’s appointment as DG, much to the angst of other Member States at the October 28th HOD meeting. In a succinct statement explaining the withholding of its support, the Office of the US Trade Representative (USTR) cemented its support for the other contender for the DG spot, Ms. Yoo Myung-hee of South Korea, citing her quarter-century trade experience as the holy grail the WTO needs at this critical juncture.
According to the Office of the United States Trade Representative (USTR), Myung-hee’s trade background equips her to heal the WTO’s wounds, including the stalemate of tariff negotiations at the WTO Ministerial Conference, and ironically the US-induced breakdown of the WTO’s two-tier dispute settlement system, hence making her best suited to champion much-needed WTO reform. On November 24th, South Korea announced its decision to withdraw Myung-hee from the race pursuant to Article18 of the Procedures for the Appointment of Directors-General (the DG Selection Procedures) which clearly outlines that the “candidate least likely to attract consensus shall withdraw” [emphasis added]. This announcement undoubtedly brings a sense of relief since just under a month ago in a 2020-worthy plot twist, the US revealed Myung-hee’s intention to remain in the race at a Heads of Delegation meeting on October 28th while South Korea remained silent. Notably, while the US can no longer tout its support of Myung-hee, it can still hold firm to its objection of Okonjo-Iweala.
The US’s objection to Okonjo-Iweala has delayed the appointment of the WTO’s next DG since the organization operates on a consensus principle meaning that decisions are not made by a majority vote but rather by a unanimous one. Rufus Yerxa (former WTO Deputy DG) suggested that the WTO’s DG selection process would be in the ‘hands of the American electorate’. With a new president set to be inaugurated on January 20th, 2021, WTO Members are hopeful that the US position will be more favourable. According to Yerxa and others in a video discussion hosted by the Washington International Trade Association (WITA) a Biden Administration would see the removal of Robert Lighthizer (US Trade Representative) who, with the backing of the Trump Administration, is extremely antagonistic towards the WTO and unyielding on the issue of the US’ support for Myung-hee. This leads to a best-case scenario of the confirmation decision being pushed back to January 2021 to coincide with the inauguration of the new US President.
Of the WTO’s 164-country membership, Nairametrics reports that only the US is opposed to Okonjo-Iweala’s appointment. In light of this, there is another option open to the GC. Article 20 of the DG Selection Procedures provides that if the GC is unable to “take a decision by consensus” then Member States “should consider the possibility of recourse to a vote as a last resort…” [emphasis added]. Wendy Cutler (former Senior Negotiator, USTR) in a WITA video discussion expressed reservations on employing a forced vote since it departs from the WTO’s consensus principle and she fears it would have implications on the future use of consensus in WTO decision making. Likewise, a recent Bloomberg article by Bryce Baschuk referred to a vote as “unprecedented and harmful”.
However, Article 20 of the DG Selection Procedures recognizes such a departure as “exceptional” and not usable as a precedent for future WTO decisions, which would dispel Cutler’s and Baschuk’s concerns regarding any detrimental effect. Regrettably, Article 20 is discretionary at best and omits any definitive response to what obtains when there is no consensus on the appointment of a DG. Consequently, the system that was created specifically to avoid this very seems ill-equipped to manage it, highlighting yet another example of much-needed reform in the 25-year old organization.
Despite the US’ untimely intervention, and the knee-jerk reaction to ignore it, is it warranted? Should its substantive concerns be ignored in favour of procedural complicity? Ambassador Walker reiterated that the “ultimate objective of this […] selection process has been to secure a consensus decision by members”. At all three stages, consultations were held with delegations from each member state privately, giving them the perfect opportunity to raise any issues. Which begs the question, why would the US wait until the eleventh hour to voice this strong position of support for Myung-hee even though Okonjo-Iweala was the clear choice for consensus?
Okonjo-Iweala’s confidence throughout the process has been unwavering and despite the current circumstances her tweets suggest that she is hopeful of a positive outcome, although her road to victory has indeed been a complicated one. The most recent hurdle came at the beginning of November – just one week shy of a possible confirmation – Bloomberg announced that due to newly implemented lockdown measures prohibiting public and private gatherings of over five people, the November 9th GC meeting would be postponed, nevertheless December 17th has since been confirmed as the new meeting date.
While it certainly seems as though the WTO is on the path to being on the right side of history by confirming its first female and African DG, the US has turned what should have been the path of least resistance into that long walk to calvary. And ironically the US may have created a mess that ostensibly only the US can clean up. Hopefully, Biden’s recent victory at the US Presidential elections will secure the consensus needed to confirm Okonjo-Iweala’s appointment so she can get to work making her-story.
Leah Crag-Chaderton is a practicing attorney based in St. Kitts-Nevis. Nicholas Lazarus is an International Relations graduate from Grenada with an employment history in Microfinance and Public Sector Consulting. Both authors were post-graduate students in the Masters in International Trade Policy program at the Shridath Ramphal Centre of the University of the West Indies, Cave Hill, Barbados.