Okonjo-Iweala: It Cannot Be Business as Usual at WTO

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The new Director General of the World Trade Organisation, Dr. Ngozi Okonjo-Iweala, in her maiden interview with journalists on Monday spoke about her plans to transform the organisation. James Emejo, Nume Ekeghe, Oluchi Chibuzor and Hamid Ayodeji bring the excerpts:

Introductory comments

Good day to everyone wherever you are around the world. I want to thank you for being here. Let me say that a few minutes ago, the general council of the WTO, agreed on my selection as the seventh director general of this organisation. I am deeply honoured and humbled by the support I have received from WTO members. I will say it’s exciting and daunting at the same time because I take the reins of WTO at a time of great uncertainty and challenge.

We have the twin shocks of the pandemic- the health side and the economic side – which is challenging for many including challenging for livelihoods in many parts of the world and it has formed deep economic devastation in parts of the world. So, the WTO at this time is also facing some of the challenges and it’s clear to me that deep and wide-ranging reforms are needed – and as I said before, it cannot be business as usual at the WTO. We need to look at the priorities and I will speak to them in a moment. We need to modernise our rules, we need to look at what the WTO can contribute to solve the present situation of the pandemic, we need to look at procedures. So much needs to be done and that’s why I talked about wide-ranging reforms. But of course, it will not be easy because we also have the issue of lack of trust among our members which had built up over time among the US and China, US and EU and even between developing and developed countries members and we need to walk through that if we are to achieve the reforms that the WTO needs to achieve in order to be relevant in this modern age.

Trade is very important and trade makes up 60 per cent of GDP and it’s also very important if we are also to come out of this pandemic both in terms of how to make sure there’s a freer flow in supplies to deal with the public health emergency and also for economic revival and sustainability recovery of the globe. Without trade, it cannot happen. Of course, GDP growth contributes to trade and looking at some trade rules and liberalisation of trade can contributes to faster GDP growth. So, I think trade is very important from all sides. And when we look at the membership of the WTO, we must be mindful that whatever we do will benefit more members not just big members or middle-sized countries, but also small ones or small island economies and I think this is very important.

Let me speak very quickly to some of the priorities as I see them and as i shared with the General Council. I think first and foremost, we need to focus on the issue of COVID-19 and what can the WTO do to contribute to the solutions; how to accelerate all these organisations that are trying to accelerate supplies and vaccines to poor countries. The WTO can look at export restrictions and prohibitions from members. The international trade center says there’s almost still a 100 members which still have these restrictions and prohibitions. How can we lift them and be very transparent about them, making them temporary so that there’ll be a freer flow of goods? Secondly, how can we also encourage or find what I call a third way in which vaccines can be manufactured in many more countries while taking care that we do the storage, research and innovation which is linked to intellectual property. Then, we have the issue of the dispute settlement system, which people call the jewel in the crown of the WTO. There’s no point really agreeing on more rules, the only place in the world where trade disputes do not work is paralysed. So, it’s a priority to really reform that and take account of inputs of all members to make sure we come up with a dispute settlement system that works. And there’s need to modernise the rules of the WTO to attend to 21st century issues. What do I mean by that- we have to look at the digital economy which has become so prominent during this pandemic. E-commerce is key and it’s going to grow in leaps and bounds as we move on.

Now the WTO does not presently have rules that undertake e-commerce, so how to put those rules in place to complete the negotiations will be very important. I must mention fishery subsidy negotiations; it speaks to sustainability of our oceans, it helps fulfill one of the SDGs. I forgot, there’s one thing that is very important as a priority to me; it is also the fact that e-commerce will help us women and micro small and medium size enterprises.
Trade is about people and we have to constantly keep that in front of us. And then let me just mention quickly traditional issues like agriculture, issues of industrial subsidies, agricultural subsidies, and there are also procedural issues. I have said in my speech that we need to look at procedures for appointing the director general; issues of how to make sure consensus does not stand in the way of innovation in the organisation. So, there are a lot to do and these are some of the issues I pointed out as priorities. I should also perhaps end by talking about strengthening the secretariat. The secretariat of the WTO has very talented staff and among the best you can find in the world of trade. So, how can you have that to work better and support members. These are some of the things I think we should be looking at.

What can you say about the rejection of your selection last year by former United States President, Donald Trump?

I think I was surprised when that came at the decision making meeting because there had been no indication previously that there was any problem with the US. But, you know that’s the way life works so that when things happen you take them in your strength and move on. And so it was absolutely wonderful when the Biden-Harris administration came and broke that logjams, joined the consensus and gave such a strong endorsement to my candidacy. So that has set a very good stage and to joined other 163 members to endorse the candidacy I think it’s wonderful.

How do you feel about your appointment as DG of the WTO?

I feel an additional burden; I can’t lie about that. Being the first African and the first woman means that one really has to perform. I have always said these are wonderful things and groundbreaking. I am grateful to members for electing me, making that history but the bottom-line is that if I really want to make Africa proud, I have to produce results. That’s where my mind is at now- how do we work together with members to produce results?

So, with respect to dispute settlement, i will tell you that every member agrees that the dispute settlement system needs reform- from developing to developed countries – the United States to China to India to the EU, everyone agrees. But they have various opinions about what types of reforms are needed. So how we set about it is to first try to work with member-states to on the main issues with respect to the dispute settlement system. What are those reforms, what are the challenges they see and what are the reforms they’ll like to see? So I will flesh out the reforms and put them together, get members to agree on this and once they agree that these are the set of reforms, we put together one by one to implement these reforms.

And I hope we can take this to the ministerial meeting which is estimated to take place by the end of the year. So they have like eight months to try to work this out. I think it will take some time to really put it all out but at least we should get a good start.

What should Africa expect from your leadership at the WTO to advance AfCFTA which commenced this year?

Of course, as the DG for all members, I must work to advance the interest of every single member. But that being said, Africa is at unique juncture where it is implementing one of the largest free trade agreements in the world.

The WTO is working on facilitating the agreement. We are pushing that out and we are trying to see how we can get investment into the continent. It would be very important and we would do absolutely do everything to try and facilitate that. The continent must also do its part to make conditions more suitable for investments to come in. For example, if you look at the area of pharmaceutical products, we import more than 90 per cent of the pharmaceuticals we use on the continent. So, how can we help facilitate investments so that the continent can have the ability to manufacture more of their medical products and commodities? And the WTO is looking at what we can do on the investment side and it would be very important working with organisations in partnerships like the International Finance Corporation (IFC) and the World bank and so on.

What would be your first call to action as you assume duties as WTO DG and how do you plan to use the political momentum of your appointment in the near term?

As soon as I get to Geneva in a couple of weeks, my first action would absolute be to speak with all the ambassadors, start meeting with them because if we are going to move fishery subsidies, I need to talk to Ambassador Santiago Wells to find out what are the sticky point and which delegation needs to be talked too and where I can help to move that forward. So, I would meet with the ambassadors to flesh out what is blocking some of the issues.

In fact, there is also the possibility to get an agreement on accepting the world food program for instance from export restrictions. So, my main priority is to make those political visits and of course I want to speak to the staff and I would like to have a town hall at some stage to thank the deputy director generals who have been doing a great job in running the place. I would have a transition meeting with them so that whilst they are still there, they can help me with some of the important things at the secretariat. So that would be my first call to action.

You mentioned in your statement and I want you to elaborate on that, when you said the COVID-19 can also be an opportunity for WTO to prove its relevance to the current realities. You were the Chair of GAVI and I wonder if you have any plans on how the WTO would contribute to the fight against the pandemic in a proactive way especially on distribution of vaccines?

I actually think that the COVID-19 is an opportunity for the WTO to have a success and show what we can do both in the short and long-term. And in the short term, I want to look, with staff, at the monitoring functions and see how many countries still have export restrictions and prohibitions that impact on medical commodities and look at those and see how the rules at WTO that apply to opening restrictions and how they have to be transparent and the period you phase them out because it can only be temporary. This would be a top priority to see how we can encourage lifting of those by looking at what the monitoring functions is showing us and then encouraging countries to do that, and that would mean a freer flow of those commodities.

Secondly, with respect to vaccines, I have said that vaccine nationalism does not pay. I have been in politics in my country being a minister, so when this kind of thing happens, it is very natural for leaders and politicians to want to take care of their own population and there is nothing wrong with that. The problem we have is that the pandemic is a global problem; so taking care of your population and being nationalistic with respect to vaccines won’t work this time. Because even if you get all of your population vaccinated and there is a country down the road that hasn’t done that, it would come back in the way of variants. So, one of the things one would like to do is to work very hard to see what the WTO can use all the flexibilities possible to allow countries to manufacture available vaccines so that there can be more for poor countries quickly. And this would be a great support to the COVAX facility which Gavi and the WTO had put together. Actually, the World Health Organisation (WHO), Gavi and Critical Event Preparedness and Response (CEPAR) put together what is called the active accelerator which I mentioned in my speech which is designed to speed up the availability of vaccines to poor countries. So, how can the WTO support that by exercising its flexibilities and we have seen an example. AstraZeneca is already licenced to make its production of vaccines all around the world in many development countries and it has the biggest facility in India. The Serum institute of India can produce a billion cases of vaccines. So, more of these approaches which I call the third wave is what we need to focus on.

Some people think you don’t have experience in international trade, what would you say to them and secondly, many countries are now focusing on regional trade, so what would be the role of WTO?

With regard to the worry and issue of trade experience, I don’t think we should spend a long time on that. 162 countries prior to the blockage from the Trump administration felt I had enough experience to win a consensus and I think that is the key. My background speaks for itself. I have been working in the area of trade as a minister of finance, trade facilitations and customs reported to me. I was coordinating minister of the economy in Nigeria as well as minister of finance and I coordinated all the economic ministries including trade. So, I think somewhere perhaps, someone got the wrong impression and that is not an issue for me. If it is about trade negotiation, I am not a negotiator but I don’t think that is what the WTO needs right now. If it were just skills for trade negotiations only, all our problems would have been solved, because Geneva has no shortage of those skills either within the secretariat or among our ambassadors. They have been there and the problems have not been solved. So, I think those who are saying these need to look at the situation, the problem and what it needs. What it needs is someone who has the capability to drive reforms, who knows trade and does not want to see business as usual and that is me. On the issue of WTO not working so well and the regional trade agreements, you are right that the rule of the WTO is not keeping up to date, regional trade agreements and bilateral trade agreements have proliferated and actually some of them have more innovations than we have at WTO. But there is one important thing, the WTO is a moving multilateral vehicle where every member can come together and it is far more cost-effective because the economies of scale are there in having multilateral agreement than bilateral and regional agreement. I am not saying those are not important, they are. But I think the WTO and the monitory function is very important so you can monitor not just a group of countries but all countries. Multilateral negotiations are very important just that the WTO has not been able to have any and we are going to have the fishery subsidies as one that would hoping commence. And the WTO is the only place where members can bring their trade disputes.
So, it is the only place in the world and that is a very potent function and that is why we need to reform the dispute settlement mechanism. So, all in all, the WTO has been of upmost benefit to its members including the big and rich countries over time because it has ensured fair and transparent rules of the game and a level playing fields for the multilateral trading system. That is still needed today and that is why the WTO is extremely open to underpin that fair, balanced transparent trading system.

What do you see as the path for the Appellate Body?

The reforms at the appellate body is not going to be an easy one, but there have been specific criticism of the appellate body and it looks to me like the work done by Ambassador Walker shows that the majority of members would like to see the dispute and settlement mechanism and keep the appellate body. But we need to talk to all the members to make sure this is still the case. There were specific criticism of the appellate body overreaching the mandate that was agreed to by members and kind of going to jurisprudence. The entire timeline to reach agreements was supposed to be 90 days and now you have some cases that are ongoing for two years and so all. To be fair, cases today are much more complex than they were in the past so that may account for some of the reason it has been taking so much more time. But we would need to look at that and there is no reason why we cannot come to a situation where the we can go back to the 90-day period and render these cases, solutions and agreements solved faster. Finally, we need to have an appellate body that has the confidence of all.

What will be your priorities for the first 100 days?

The priorities will be one: working on solutions to the COVID-19 pandemic. The WTO has to work extensively about the way it can help solve that, not only on the outside but also the economic side. I mean looking at trade and how to get trade help the world economy to recover.

So it can play a role. I would also like to see a longer term framework set up for response to pandemics; so it is not just solving this immediate problem. If we are going to have more pandemic in the future, I think the WTO should get other international organisations like WHO even the World Bank, IMF and all those multilaterals to try to set the rules so that next time we would not spend time trying to figure out respond, it will just be to trigger a set of actions. So, that is really a top priority, following that I will like us to work on the fisheries subsidies negotiation. I think there is a strong chance to complete them which has been going on for 20 years and this is far too long. We need to be accountable to end these negotiations and end them well because they are very important for the poor and improve sustainability for our fisheries in our oceans, that is very

I think third will then be focusing on the dispute settlement mechanism and trying to set forward a world programme – a set of reforms that can be agreed and push forward. Then, let me add that the digital economy and the e-commerce negotiations are very dear to my heart. I just see the blossoming of SMEs using online platforms to trade and to improve their lives and so I want us to see if we can make progress in that area.

What are the low hanging fruits for you in the first 100 days?

I think the low hanging fruits are one: To prepare a very successful Ministerial Conference 12, that will come out with outcomes, within that completing the fisheries subsidies. The low hanging fruit I think is for us to agree on that and another low hanging fruit is the dealing with the pandemic. I think we can make some agreement on that and take that off. The third one is agreeing on the world programme for solving the dispute settlement mechanism. I think we need to get back to some of the areas in revamping negotiations and trading of environmental goods and services and trying to work with poor countries.

Then I think the issues of the logistics of trade, I come back to that; how can we encourage low carbon emissions, transportation of goods and services we need to take a look at that but also the issues of high carbon emitting goods themselves and how can we look at the issue of carbon taxes.

For instance, I have argued in the past, that for many countries, this is also a source of revenue.

I think you can make it more attractive to finance ministers by saying this will kill two birds with one stone particularly in developing countries.

It will help you discipline high carbon emissions but also bring in revenues into the purse. So, there are several actions that we need to look at that will be quite beneficial I believe are good. Do not forget fisheries subsidies, is also about sustainability and the environment. So, if we deliver that, that is another thing that adds to the whole environmental area.

But on climate change, am very keen. I just want to state that as we do this we must make sure we do not come up with disciplines that make developing countries feels that barriers are been put against trading of their products and I believe we can handle this in a way that does not do that

Under no circumstances should there be licensing agreements that lead to developing countries paying more than developed countries. The point of having this is to see to the increased volume of manufacturing in order to generate more affordable rates and accessibility. Thus, we need to ensure the manufacturers of those commodities do not allow such to occur. I see how Astrazeneca has been able to do this and it is also talking to many countries across Latin America and Asia about this licensing. Johnson and Johnson is doing some contract manufacturing in South Africa and are interested in this issue of licensing, whilst being aware that the objective is not to penalise developing countries by charging them more. Rather it is to ensure that they have access to them as there is a shortage of vaccines all over the world. There is a huge challenge with the production capacity of the firms to cater for the high demand of the commodities by the world. We feel agreements can be made which are favourable to developing countries.

Agriculture is a sector that is essentially focused on sustainable development of economy. However, the issues facing the sector are not easy, like the issue of access to market and domestic support which we hope the ministerial can look into as well as the export restrictions because this is very important to a lot of countries.

I think the advantage is that there is a fresh pair of hands and ears which seems to be what is needed in order to solve economic problems, rather than repeating the same methods that have been over used over the years. Border adjustment measures is also something that is essential towards the development of global trade and peace. Hence, it is something that we need to reflect upon effectively. Although, it is not easy as it is practical and poses issues as, accurate and justifiable measurements, how they are set, and how they are monitored. These are practical issues that need to be addressed and applied in ways that are not inconvenient to other neighboring countries and continents in respect to their trade.