It has been almost 20 years since the WTO launched the now moribund Doha round of trade talks in which the needs of developing countries were supposed to be central. A properly functioning global trading system would make the most vulnerable nations more resilient and reduce the gap between rich and poor countries. A test of Okonjo-Iweala’s leadership will be whether she can deliver on this unfinished business.
Like a soccer coach taking over a team stuck in a relegation battle at the bottom of the league table, Okonjo-Iweala is in the enviable position of taking over at the WTO when the only way is up. Of all the big multilateral economic organizations, the WTO is the toughest gig: trade is a hugely contentious issue and yet decisions in Geneva are made by consensus. The “good” old days when trade deals were struck between the United States and the Europeans are long gone.
There has not been a successful completed round of trade liberalization talks since 1993. The WTO’s ability to police global trade rules has been called to question because a key part of the organization for settling trade disputes, called the appellate body, remains crippled after Trump blocked appointments of new judges to the panel that hears trade litigations. Trump claimed the appellate body had exceeded its mandate, ultimately engaging in judicial activism that undercut US trade law, harming American workers and infringing on American sovereignty.
No question, Okonjo-Iweala has her work cut out. Despite her impeachable credentials and strong pedigree as a reformer, she has no real background in trade, although that may prove to be less of a handicap than some of her detractors imagine. The last two WTO director-generals – Roberto Azevêdo and Pascal Lamy – despite knowing trade inside out still struggled to make much progress with trade liberalization. Trade negotiations, including an effort to restrain harmful subsidies given to the farming and fishing industry in developed countries, have dragged on without resolution.
Okonjo-Iweala believes a politician rather than another technocrat has a better chance of sorting out the WTO’s problems – and she is right because each of the three big challenges she faces has a political dimension. “Dr. Ngozi” as she is fondly known brings stature, experience, hard-nose negotiating skills, an international network and a stubborn persistent temperament of always trying to get things done! The first is to accept that the Americans (backed privately by some other countries) have a point when they say judges on the appeals body are there to interpret trade law, not make it. The US will not fully engage with the WTO under any president, until the appellate judges stop legislating from the bench. The second is to repair the strained relationship between the three main players in global trade: the US, China and EU.
That is no easy task given the breakdown in trust over trade wars between the US and China; but ought to be helped by a fading of protectionist pressures as the global economy recovers from the pandemic. There is also growing consensus that the WTO has failed to police some of China’s worst economic offenses, which many in the US consider the world’s biggest trade challenge today. The US and other developed WTO members argue that developing countries, notably China, cannot cling on to exceptions and that rules need to change to reflect China’s economic growth. There is deep uncertainty about whether the WTO can be overhauled to address these shortcomings. And there are also deep divisions over whether rich and poor countries should receive different treatment under global trade rules.
The Trump administration spent the last four years mostly criticizing or ignoring the WTO, ultimately weakening the institution by carrying out its most prominent trade policies outside of its boundaries. Rather than working with the WTO, Trump took on trading partners like China and the EU one-on-one; imposing hefty tariffs that those governments argued contravened the WTO rules. President Biden is likely to take a very different approach. He has criticized Mr. Trump for alienating allies and weakening the multilateral system, and is expected to make the United States a more active player in international groups including the WTO. That included the Feb. 5 announcement by the Biden administration that it would support Okonjo-Iweala, reversing efforts by the Trump administration to block her candidacy.
Dr. Okonjo-Iweala, 66, is a development economist; a 25-year veteran of the World Bank, where she oversaw an $81 billion portfolio, Okonjo-Iweala ran against seven other candidates by espousing a belief in trade’s ability to lift people out of poverty. She served two terms as Nigeria’s finance minister, as well as the country’s foreign affairs minister.
In her first stint as finance minister, she led negotiations that resulted in most of Nigeria’s external debt being canceled. Later, as coordinating minister of the economy in Nigeria; a powerful position created for her that has never been held before or since, many ministers took directives from her, making her the de facto president. In her 2018 book, “Fighting Corruption Is Dangerous,” Okonjo-Iweala wrote about how her reforms to tackle corruption and shore up the Nigerian economy made her many enemies.
Little surprise when her mother was briefly kidnapped, the kidnappers demanded her resignation. Her years of navigating Nigerian politics, with its many internal factions and vested interests, have made her “a pro” at fighting the big battles. If she could handle Nigeria, she should be able to do a good job at the WTO.
Dr. Okonjo-Iweala has said her earliest priorities will be ensuring the free flow of vaccines, medicines and medical supplies to help deal with the pandemic and aid the global economic recovery. The WTO currently faces deadlock over the issue of waiving intellectual property rights for Covid-19 drugs, with many rich countries opposed. She has vowed to push for new trade agreements on fisheries and the e-commerce industry, and she also said she would prioritize updating trade rules, encouraging members to be transparent and notify one another of changes to their policies, and strengthening the organization’s bureaucracy.
The focus on Okonjo-Iweala in the media, especially social media has been that she is the first woman and the first African to head the WTO. As such she is a symbol, and symbols are important: many Africans see her as validating the competency and leadership skills of African women. With the popular focus on Okonjo-Iweala’s gender, race, and country of origin, overlooked is her competency and expertise, demonstrated during her career at the World Bank and twice as Nigeria’s finance minister. Okonjo-Iweala’s breadth of education, cognate experience, specific hands-on professional competence across a swathe of the real world; coupled with being a tested public finance reformer and budget innovator in one of the world’s most difficult economies, matched against the challenges for the incoming President of the WTO in an objective assessment, her gender notwithstanding.
Okonjo-Iweala self-identifies as foremost a Nigerian, and in public always wears Igbo dress. Her bid for the WTO top job was an immense challenge in our time for African women; a clarion call to duty and responsibility to the most desperate part of humanity. Her candidature was credible and an event where she made the critical point to stand in her own skin and skills.
Her competencies attest to this: Ivy League alumna, Ph.D. in Regional Economics, Bank lender and policy work in all the core sectors of the World Bank – South Asia, Africa, Europe, Central Asia; debts negotiator, development economist, Finance Minister of the Year 2005; her aptitudes as finance expert, foreign minister, not excluding the hard work of wife, mother and African princess. Comfortable in Washington and in the Tropics, her span bestrides the sophisticated and the mundane: she worked as a cook for Biafra soldiers on the frontlines in the Nigerian civil war; she studied at Harvard and earned a doctorate from Massachusetts Institute of Technology (MIT). She worked in Washington, DC for twenty-five years and became an American citizen in 2019. Her husband is a physician practicing in Washington, DC. She serves on the boards of Twitter and Standard Chartered Bank and is an adviser to the Asian Infrastructure Investment Bank. Until recently she served on the board of GAVI, an international organization that distributes vaccines to poor countries. Dr. Ngozi is exceptionally prepared for this assignment.
