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WTO DG: US, EU divided over Nigeria’s Okonjo-Iweala and South Korea’s Yoo

The United States and Europe are heading for a dispute over which of the candidates to support for the top position in World Trade Organization (WTO), as the selection of the first woman to head the global trade organization enters a pivotal phase.

According to a report from Bloomberg, the EU is inclined to support Nigeria’s Ngozi Okonjo-Iweala and may sign off on that position Wednesday, whereas the Trump administration is leaning towards South Korea’s Yoo Myung-hee. However, China’s preference and those of other major economies like Brazil and India remain unclear.

The new DG, WTO is expected to be announced in November to replace Brazilian Roberto Azevedo, who stepped down from the job at the end of August – a year before his term ended. He was the sixth consecutive man to lead the 25-year-old organization.

Rufus Yerxa, former deputy DG of the WTO from 2002 to 2013 and now heads the National Foreign Trade Council, a Washington-based business group representing US companies said, “We shouldn’t dismiss the possibility that this could end in a deadlock and that an outcome will have to wait for the U.S. election and what the next administration decides to do.’

While few countries are publicly saying which of the two women they support, the process requires a consensus of the WTO’s 164 members; meaning a single nation could block either Yoo or Okonjo-Iweala. Muddling the picture even further are trading alliances from Africa to Asia strained by three years of tariff wars and protectionist sentiment, only heightened by the COVID-19 pandemic.

For instance, South Korea’s Yoo has struggled to secure support from Japan, a trading partner and rival of South Korea. Deteriorating trade relations between the two export powerhouses has negatively impacted on Yoo’s campaign initially and remain an important consideration in the last phase of the race.

In an interview on Friday, Yoo acknowledged that she might have an uphill battle. She said, “Everybody loves an underdog story. I believe I have earned members’ trust through my hard work, sweat and perseverance, and sincerity. I will continue to do that.”

The EU played a critical role in the selection process for the previous round when the 27-nation bloc selected both Yoo and Okonjo-Iweala to be its preferred candidates for the final stage. That effectively sank the candidacy of Kenya’s Amina Mohamed, who had been viewed as an early front-runner in the race.

Since the shortlist was trimmed to two earlier this month, both Yoo and Okonjo-Iweala have been working behind the scenes to shore up support. Among the bargaining chip they can offer to nations that endorse them is a job for their citizens as one of the four WTO deputy DG.

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Nairametrics had earlier reported that Nigeria’s Ngozi Okonjp-Iweala had secured the support of the 55-member African Union to lead the global trade organization. This is in addition to the endorsement from the Economic Community of West African States (ECOWAS), Caribbean and the Pacific States, bringing the total to about 79 countries that are currently supporting her candidacy.

Nigeria’s former finance minister has positioned herself as an outsider – one who has never worked at the WTO or led a trade deal negotiation. Last week she called for a return to a multilateral system. In a virtual panel discussion on Thursday, she said, “Let’s strengthen that – that is what will serve the world, and let’s do less of the bilateral spats that we see.”

READ: COVID-19: IMF Chief predicts $345 billion financing gap in African countries 

But Okonjo-Iweala is viewed by people familiar with U.S. Trade Representative Robert Lighthizer’s thinking, as being too close to pro-trade internationalists in Washington like Robert Zoellick, the former USTR and World BankPresident. Okonjo-Iweala, who served as a Senior Executive under Zoellick at the World Bank from 2007 to 2011, was a candidate to replace him when he stepped down in 2012.

Lighthizer is a longtime WTO skeptic, and people close to him say he would prefer to see a more technocratic candidate like Yoo, South Korea’s Trade Minister and a 25-year veteran who has helped expand her country’s commercial network through bilateral accords with China, the EU, the U.K., and the U.S. He knows the Korean from having worked with her on the renegotiation of a trade agreement early in the Trump administration.

What this means

It appears that there might be a stalemate in the selection of the new head of the WTO as the 2 parties are very critical and important stakeholders in the global trade organization. The US has always played a key role in deciding who leads the WTO; although, in collaboration with most of its European allies.

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