Biden relents on WTO, greenlights new Director-General, Dr Ngozi Okonjo-Iweala

February 10, 2021: Former US President Trump made life at the top of the World Trade Organisation hard for its former head, Roberto Azevado, who left early to take a job with PepsiCo. Then Trump blocked the appointment of his replacement, who had clear majority support. Now US President Biden has cleared the way for her appointment,

Dr Ngozi Okonjo-Iweala from Nigeria, is likely be the first woman and first African to head the WTO when the post is filled later this year.

The Biden administration decision is part of its re-engagement with the international community.

Under Trump, the US insisted on pressuring another candidate, South Korea’s Trade Minister Yoo Myung-hee not to withdraw in the face of majority support for Dr Okonjo Iweala, leading to an impasse last year which delayed any appointment.

The office of the US Trade Representative issued a statement of endorsement of Dr Okonjo Iweala which said that the Biden-Harris Administration looks forward to working with a new WTO Director General to find paths forward to achieve necessary substantive and procedural reform of the WTO.

Dr Okonjo-Iweala worked for 25 years with the World Bank and had two terms as Nigerian Finance Minister. She faces a tough task, with the COVID-19 crisis adding to divisions and tensions in the international trading system that were already present before the pandemic hit the global economy.

An immediate challenge is the intense clash between the majority of members states and a few rich countries over a fair global distribution of vaccines. South Africa and India, supported by 100 other countries, have been sponsoring since October 2020 a proposed waiver of intellectual property rules for the duration of the pandemic. 

And the WTO has deeper problems along the same lines. Rich country demands for more trade liberalisation have paralysed the Doha Development Round since the Cancun Ministerial in 2003. Under Azevado, the advanced economies refused to listen to the concerns of the developing countries and instead initiated plurilateral talks on digital trade and services, and received inappropriate support in this from the WTO secretariat.

All this against a backdrop of a slowdown in global trade, the weaponisation of tariffs by the Trump administration and a dangerous technology war with China. Trump openly considered withdrawing from the WTO altogether, and crippled its Appeals Board.

While the US can be expected to push Dr Okonjo-Iweala to advance US demands for more trade liberalisation and a more favourable Appeals Board, the developing countries will also be struggling to advance their “inclusive and developmental” agenda of reforms, such as the waiver or intellectual property rights during the COVID-19 pandemic, securing a permanent solution for public stockholding programs for food security, and policy space for national economic development pathways.