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TWN Info
Service on WTO and Trade Issues (Jul20/15) Geneva, 20 Jul (D. Ravi Kanth) – Members of the World Trade Organization will now move into the second stage of selecting the new Director-General of the organization, following the conclusion on 17 July of the public presentations by the eight candidates in the DG race. The eight candidates delivered somewhat mixed messages for aligning with the demands raised by the United States and other developed countries for WTO reforms and more plurilateral negotiations, participants told the SUNS. At the final day of the special General Council (GC) meeting on 17 July, held in a hybrid format of physical presence and a virtual platform, two more candidates – Mr Mohammad Maziad Al-Tuwaijri from Saudi Arabia and Dr Liam Fox from the United Kingdom – staked their respective but differing claims for rescuing the WTO from its multi-functional crises, said several participants, who preferred not to be quoted. The eight candidates in the DG race – Dr Jesus Seade Kuri from Mexico, Dr Ngozi Okonjo- Iweala from Nigeria, Mr Abdulhameed Mamdouh from Egypt, Mr Tudor Ulianovschi from Moldova, Ms Yoo Myung-hee from South Korea, Ms Amina C Mohamed from Kenya, Mr Mohammad Maziad Al-Tuwaijri from Saudi Arabia and Dr Liam Fox from the United Kingdom – are vying to replace the current DG Roberto Azevedo who will step down from office on 31 August. The second stage of the DG selection process will involve the candidates making themselves known to members that will last until 7 September. A series of gatherings will take place in different configurations between each candidate and the members. The second phase will conclude on 7 September and then members are expected to enter into the final phase of crucial one-on-one meetings with the “troika” of the selection committee – the General Council chair Ambassador David Walker of New Zealand, the chair of the Dispute Settlement Body Ambassador Dacio Castillo of Honduras, and the chair of the Trade Policy Review Body Ambassador Harald Aspelund from Iceland. During the third phase of “confessions”, members will indicate their preferences/picks among the eight candidates. But it is not clear yet how the final phase of the selection process will be conducted in terms of the evaluation of “confessions”/preferences of members, said one participant, who asked not to be quoted. In the past, particularly in the DG races in 2005 and 2013, there were sharp concerns expressed by some of the defeated candidates about the opaqueness of the process and lack of transparency. Therefore, it is important for the GC chair to announce the criterion for evaluating the preferences/picks that each candidate received after each stage so as to eliminate any doubts and strengthen the transparency process at a time when the issue of transparency and notifications has become a major plank of the WTO reforms, said a trade envoy, who asked not to be quoted. SAUDI ARABIA’S CANDIDATE During his presentation on 17 July, Mr Mohammad Maziad Al-Tuwaijri, the Saudi Arabian minister, said he would follow the practice of his grandfathers during their caravan trade who were guided by the “North Star.” “The only way for the WTO to succeed is for Members (of the WTO) to establish goals, then set a course, following their True North towards those goals,” Mr Al-Tuwaijri insisted, saying that the DG’s role is one of acting as a “compass” to help members stay on the path toward their goal with the support of the Secretariat. In his somewhat technocratic and performance-based approach, the Saudi minister emphasized that, if he is selected as the DG, he would adopt a performance-based review of the targets set by members and hold a ministerial meeting every year to evaluate the progress made on the goals, instead of the current practice of holding a biennial ministerial conference. Against the backdrop of the Covid-19 crisis, the Saudi minister raised three questions. They include: (1) what opportunities and solutions will emerge from the current challenges? (2) how can members work together to leverage new ideas, new rules, and new technologies to solve the emerging problems? (3) what kind of leadership is required to ensure that the multilateral trading system delivers on the vision and objectives set by Members? According to Mr Al-Tuwaijri, “the leader of a Member-driven Organization must ensure that steady progress is made on delivering the goals and objectives set by members.” He repeatedly emphasized the need for “continuous reforms” in the three pillars – the negotiating pillar, the Dispute Settlement Body pillar, and the monitoring pillar – , based on a “tricycle theory” approach. The Saudi minister argued that the broken parts of the tricycle must be immediately repaired so as to bring balance between the three pillars. According to his diagnosis of the crises plaguing the WTO, the “consequences for the WTO of over-performance in litigation, while neglecting the negotiating and monitoring functions” would suggest a system out of balance. Therefore, the Saudi minister said that he “would establish critical success factors” from members’ goals and objectives. Finally, “as DG, with the help of the Secretariat, we (members) would collect evidence and data and calculate metrics to help you all understand where goals are being reached, of where performance on WTO objectives is falling short,” he emphasized. The Saudi candidate said, if he is selected as the DG, he would “help members to guide the system forward by constantly assessing performance” to bring about gradual transitions. Touting that he is a “pragmatic optimist who believes that as long as Members trust they all remain committed to the True North of the WTO project, we will always find a way to work together,” he said that the multilateral agenda must be balanced and must include an incentive for members to participate in the negotiations. Mr Al-Tuwaijri endorsed the “plurilateral negotiations as long as they are open to all members.” As regards the differentiation among developing countries for availing special and differential treatment (S&DT), Mr Al-Tuwaijri argued that “the bottom line is, without negotiations that include incentives for everyone to participate actively, I do not think it will be possible for members to address the issue of S&DT.” Surprisingly, he did not offer any suggestions as to how the two-stage dispute settlement system can be restored with the Appellate Body having become dysfunctional. He concluded his speech with an Arabic parable which says that “in no way can you break a bundle of sticks bound together, but once they are separated, they are easy to break.” UNITED KINGDOM’S CANDIDATE In contrast to the seemingly performance-based and apolitical technocratic view of Saudi Arabia’s candidate, the United Kingdom’s former trade secretary Dr Liam Fox showcased his “political” strengths which would enable him to salvage the WTO out of its unprecedented crisis in all three pillars. Dr Fox repeatedly emphasized that the business-as-usual approach will not work any longer in the face of the Covid-19 pandemic. If anything, members must work on the basis of “business-as-unusual” approach. Unlike his Saudi counterpart, Dr Fox emphasized that the real problems plaguing the WTO are not “technical”. “Our problems (at the WTO),” said Dr Fox, “is lack of political momentum.” “There is too little political will to make compromises need(ed) for the multilateral trading system to evolve and too little vision to make those compromises easier”, Dr Fox emphasized. Therefore, members must “re-discover that political will and find the right language to express our vision about the opportunities that trade can bring to a new generation.” If elected as the DG, Dr Fox said that he will make the WTO have an indispensable seat at the top table of multilateral trade organizations. “His theological faith in the rules-based international trade system is now being challenged by the countries that created the WTO,” said a participant, who asked not to be quoted. Dr Fox expressed fear “for the rules-based system itself” due to lack of respect for the implementation of what has been agreed. The former British trade secretary said while the “strongest” would get what they want, the smallest and most vulnerable are at the greatest disadvantage due to non-implementation of rules. Significantly, he said there cannot be any free-riders in “free trade”, setting out the challenges for the new DG. The first task, according to Dr Fox, is to deliver a successful outcome at the WTO’s 12th ministerial conference (MC12) in which the new DG must play his role by producing “ideas and an agenda” that would excite members. He emphasized about outcomes on MSMEs (micro, small, and medium enterprises) and fisheries subsidies, as well as the plurilateral Joint Statement Initiatives (JSI) negotiations “on e-commerce, services (domestic regulation), MSMEs and investment.” Without mentioning the ongoing multilateral Doha Development Agenda (DDA) negotiations, Dr Fox said “issues such as trade-distorting domestic subsidies, public stockholding for food security, cotton, and other issues” will remain critical. He also highlighted trade and gender as a priority issue. He ended his intervention with a quote from one of his political heroes, Winston Churchill, that “at this hour … before the portals of supreme catastrophe and of measureless reward,” suggesting “this is such a moment for the WTO with the choices we face.” In a question to Dr Fox, the US trade envoy Ambassador Dennis Shea corrected the former UK trade secretary, saying it was wrong to attribute the quote to Winston Churchill instead of US President Theodore Roosevelt. Ambassador Shea told Dr Fox that it is not lack of political will that is affecting the dispute settlement system, saying it is lack of a common view among members that is stymieing the DSB reform. Ambassador Shea sought to know Dr Fox’s view on whether the Appellate Body (AB) crisis is due “to establish(ing) precedent, creat(ing) jurisprudence, and issu(ing) adhortative binding rulings,” or resolving disputes among members. In reply, Dr Fox suggested that the AB was created to overcome the void created by the GATT dispute settlement system. Therefore, members created a quasi-judicial system like the WTO.
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