The World Trade Organization (WTO) has announced that 58 of its 164 members support an early selection process for its next director general and that they back the current incumbent – former Nigerian finance official Dr Ngozi Okonjo-Iweala – to serve a second term.
In a statement released yesterday (22 July), the global trade body said that the 58 supporters “took the floor” to back the proposal, originally tabled by the African Group, made up of 44 African nations and nine observers.
The calls come ahead of the much-anticipated US election in November in which it is anticipated that the current multilateral framework for global trade could be debated.
Rationale
Bloomberg reporting suggests that the call for an early election could be part of a ploy to hedge against the impact of a potential second Trump presidency.
During his previous term, Trump’s administration supported a different candidate, which slowed Okonjo-Iweala’s selection process. It was only once current president Joe Biden took office in 2021 that she received the White House’s support.
Not the ‘best of times’
Speaking to the BBC earlier this month, Okonjo-Iweala, warned that global trade was under threat from “increasing protectionism, some undermining of the WTO rules”.
In recent months the EU and US have imposed substantial tariffs on Chinese Electric Vehicles (EVs) – up to 38% and 100%, respectively. In response, China has launched subsidy investigations into EU pork, of which it is the world’s largest importer.
As Okonjo-Iweala notes, protectionism is “leading to fragmentation”.
“We're also concerned about the emerging fragmentation that we see in the trade data. We're seeing that trade between like-minded blocks is growing faster than trade across such blocks.”
Institutional blocker
Less open attitudes towards free trade aren’t only a concern for the global economy but can also stymie the functioning of the WTO as a body.
Donald Trump’s presidency ushered in a protectionist era of US trade policy – notably by instigating a ‘trade war’ with China through a series of tariffs on steel, aluminium, green technology and semiconductors – but it also led to a period of disengagement with the WTO.
One of the organisation’s key roles is to ensure fair trading terms for all members and to mediate in any disputes between members.
The WTO’s dispute settlement system has been hindered by the US persistently blocking the appointment of new judges to the Appellate Body, “grinding the dispute settlement system to a halt and throwing into doubt the WTO's role in enforcing multilateral trade rules”, according to the organisation.
Once a member raises a dispute, it will be raised before a panel of judges. Once a verdict a returned, the losing party will have the opportunity to appeal the decision.