Background

Ngozi Okonjo-Iweala, recently elected to serve as the next director-general of the World Trade Organization beginning March 1, laid out her priorities for the organization in a Feb. 13 address to the WTO General Council. With renewed support for the WTO from the U.S. and a ministerial meeting scheduled for later this year, Okonjo-Iweala called on the organization’s members to “restore and rebrand the WTO as a key pillar of global economic governance, a force for a strong, transparent, and fair multilateral trading system, and an instrument for inclusive economic growth and sustainable development.”

Okonjo-Iweala said the WTO’s first priority will be to help the global economy return to sustained growth in the aftermath of the COVID-19 pandemic. Specifically, she said, the WTO must do more to encourage its members to minimize or remove export restrictions and prohibitions that hinder supply chains for medical goods and equipment, noting that up to 100 countries still maintain such measures. WTO members should also reject vaccine nationalism and protectionism and instead intensify cooperation on promising new vaccines, therapeutics, and diagnostics.

Okonjo-Iweala also emphasized the need to reform the WTO but said “a lack of trust among members means that there is less agreement on the nature of these reforms or their sequencing.” To aid that process the WTO first needs to restore its credibility, and Okonjo-Iweala said one way to “deliver early success and results” would be to conclude at this year’s ministerial meeting an agreement prohibiting subsidies that contribute to illegal, unreported, and unregulated fishing and that facilitate overfishing and overcapacity.

Reform of the WTO’s dispute settlement system has been a priority for the U.S. and others for some time, and Okonjo-Iweala agreed that “every effort should be made to improve it.” However, she offered few details on how this might be accomplished, saying only that it is important that WTO members agree on the nature of the reforms to be made, “flesh them out, and develop a work program for implementation” that can be advanced at this year’s ministerial.

Okonjo-Iweala also acknowledged the need to reform the way the WTO operates. Given “today’s fast-changing, fast-paced, but uncertain world,” she said, members may want to consider holding annual instead of biannual ministerial meetings to more quickly and effectively identify and address problems with the multilateral trading system. However, she downplayed the prospect of allowing members to take decisions based on a majority rather than consensus even as she alluded to the challenges that consensus poses for achieving “welfare-enhancing innovations or approaches of benefit to the membership.”

Regarding the WTO’s negotiating function, which has not seen much progress in recent years, Okonjo-Iweala said WTO members should update the organization’s rules to reflect “21st century realities such as e-commerce and the digital economy” and “the nexus between trade and climate change.” She also called for renewed attention to traditional issues such as improved market access and disciplines on agricultural and industrial subsidies.

Copyright © 2021 Sandler, Travis & Rosenberg, P.A.; WorldTrade Interactive, Inc. All rights reserved.

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