No more business as usual at the WTO as Okonjo-Iweala takes the helm

A BREATH of fresh air is sweeping through the World Trade Organization (WTO), with the first woman and African to ascend to the position of director general at the only global body responsible for resolving trade disputes.

The new DG, Dr Ngozi Okonjo-Iweala, says that the definition of madness is continuing doing what you have done for years over and over again, but expecting different results. Okonjo-Iweala is determined to breathe new life into the WTO and be the fresh eyes and ears of the organisation, and above all to produce results.

The new DG’s vision is to build a stronger, more relevant and more inclusive trading system.

Okonjo-Iweala takes on the driving position at the WTO at a time of rising uncertainty in the world due to the Covid-19 pandemic and the rise in protectionism internationally.

As the primary arbiter on international trade, the WTO has struggled for the past six months without a head due to the concerted efforts of the Trump administration to block the appointment of Okonjo-Iweala. But the incoming Biden administration was quick to throw its strong support behind her as the consensus candidate, paving the way for a more consolidated multilateral approach to trade issues.

Critics of the WTO claim that the organisation’s failed to manage the increased tensions between China and the US on trade issues which has had a detrimental impact on the world economy, and even prior to the onset of the Covid-19 pandemic was threatening to throw the world into an economic recession. The trade war has negatively impacted both economies, leading to higher prices for US consumers and contributing to a slowdown in China’s economic growth.

China had brought the issue of tariffs imposed by the US on Chinese goods to the WTO’s dispute settlement unit, which then ruled that tariffs imposed by the US in 2018, which triggered the escalation in tensions between the two countries, were inconsistent with the international trade rules as the US failed to justify the alleged technology theft. The WTO panel claimed that the US did not provide evidence on how the Chinese goods and services affected by the tariffs received benefits from the so-called unfair practices, thus, they had not met the obligation of demonstrating that the tariffs were justified.

Despite the WTO’s effort at trade dispute resolution, tensions between the two superpowers had escalated to dangerous levels, a situation which cannot be allowed to happen again. The WTO under the stewardship of Okonjo-Iweala will need to take a more proactive approach to manage serious trade frictions for the sake of the global economy.

Okonjo-Iweala has made it clear that she is the DG for all the 164 members of the WTO, but also recognises that developing regions such as Africa are in need of support in a number of areas, and there is no doubt that she will lobby on issues that are important to Africa. The DG says she will work with international organisations to create lasting rules for responding to pandemics.

One of the most urgent challenges for Africa is Covid-19 drug and vaccine procurement, where African countries are at a distinct disadvantage. Just as was the case with HIV/Aids drugs and certain vaccines, African countries have stood in the queue for years while rich countries bought up the available vaccines, even though the less developed countries have been the worst affected.

As the former board chair of Gavi, the Vaccine Alliance, Okonjo-Iweala has championed the cause of equitable vaccine access for the developing world, and in April last year was named Special Envoy for the Access to Covid-19 Tools (ACT) Accelerator. Okonjo-Iweala says that she is a proponent of what she calls “A Third Way” - finding ways in which vaccines can be manufactured in many countries without discouraging research, innovation and intellectual property rights.

The DG supports the proposal which was made last year by India and South Africa at the WTO for an intellectual property waiver for all countries to neither grant nor enforce patents and IP related to Covid-19 drugs, vaccines, diagnostics and therapeutics for the duration of the pandemic. Okonjo-Iweala says the waiver will be a top priority in terms of breaking the deadlock on this issue within the WTO, and finding flexibility under the TRIPS agreement.

The goal is to ensure that developing countries can get affordable access to vaccines as quickly as possible and as Okonjo-Iweala has said, “We need to be proactive as people are losing their lives.”

The DG has also highlighted the fact that vaccine nationalism doesn’t pay as, if there are countries which are unable to vaccinate their populations, the virus will continue to mutate and come back to haunt countries which have already vaccinated their people.

Outlining her other urgent plans of action, Okonjo-Iweala has prioritised looking at the sticking points on the issue of fishery subsidies. This issue she believes, presents low-hanging fruit as the negotiations have gone on for 20 years and it is time to resolve the matter which is key to the sustainability of fisheries in the future.

The DG also intends looking at exempting the World Food Progamme from export restrictions in order to expedite the provision of food to regions that need it.

The DG has made reforming the WTO’s dispute settlement mechanism a top priority, which she repeatedly refers to as the ‘jewel in the crown of the WTO.’ The organisation has been roundly criticised for its paralysis in the past, and given that it is the only forum in the world for countries to resolve trade disputes, reform is all the more urgent.

Another issue which is to be tackled is to formulate rules for e-commerce given the prominence of the digital economy during the Covid-19 pandemic. Okonjo-Iweala hopes that e-commerce will be more inclusive of women, as well as the owners of small and medium enterprises.

The new DG is arguably up to the task and capable of accomplishing the critical list of issues she has prioritised given her impressive professional track record. Okonjo-Iweala twice served as Nigeria’s finance minister, a role that encompassed the expanded portfolio of the coordinating minister for the economy. She also served as foreign minister in 2006, and has held several key positions at the World Bank, including as managing director.

Just one of the international publications which have lauded her professional abilities is TIME magazine, which named her as one of the 100 most influential people in the world.