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TWN
Info Service on WTO and Trade Issues (Sept24/09) Geneva, 18 Sep (D. Ravi Kanth) — The chair of the World Trade Organization’s General Council, Ambassador Petter Olberg of Norway, apparently moved rather quickly to consider the incumbent Director-General’s communication that he received on 16 September seeking “reappointment” for a further term of office, which has never been done by any previous General Council chair since 2002, said people familiar with the development. In a seemingly blatant violation of the rules in a rules-based organization, the General Council (GC) chair informed members that he will hold consultations starting on 17 September and continue till 19 September. He said that the consultations will be held “in person” during the three days. However, Ambassador Olberg did not indicate under which rule he is starting these consultations, said trade envoys who asked not to be quoted. The current DG Ms Ngozi Okonjo-Iweala’s term will end on 31 August 2025. Ms Okonjo-Iweala, who is a dual citizen of Nigeria and the United States, was put up as a candidate by Nigeria in 2020 after the former DG Mr Roberto Azevedo of Brazil cut short his second term to join PepsiCo, Inc. According to paragraph 7 of the Procedures for the Appointment of Directors-General (WT/L/509), the “appointment process shall start nine months prior to the expiry of the term of an incumbent Director-General with a notification from the Chair to the General Council. The process shall conclude with a meeting of the General Council convened not later than three months prior to the expiry of an incumbent’s term, at which a decision to appoint a new Director-General shall be taken.” According to paragraph 8, “Members shall have one month after the start of the appointment process to nominate candidates. Nominations shall be submitted by Members only, and in respect of their own nationals. The candidates nominated shall then have three months to make themselves known to Members and to engage in discussions on the pertinent issues facing the Organization. The remaining two months prior to the conclusion of this process shall be devoted to selecting and appointing one of the candidates.” The GC chair’s consultations would be tantamount to circumventing the rules, as the selection process ought to commence in the first week of December, said people familiar with the development. Privately, several trade envoys said that the process is being advanced to thwart any possibility of former US President Donald Trump blocking her selection, if he is elected again in November. The GC chair has seemingly shown his hand in favour of Ms Okonjo-Iweala’s continuation for a second term before the US Presidential elections in November, said a person who asked not to be quoted. DG’S COMMUNICATION In her communication, the DG wrote that the “Africa Group of 44 WTO members request that I consider putting my name forward for a second term as WTO Director-General.” She said that she was “further humbled when a large number of other members added their voice to this request”, maintaining that “all in all about 80% of WTO members made the request at that meeting.” While the actual number of countries that spoke in favour of her securing a second term were around 58, the DG’s claim that 80% of members supported her candidature seems somewhat hyperbolic, said a trade envoy, who asked not to be quoted. At the GC meeting on 22 July, the DG had said that while she is “favorably inclined, there were family considerations that I would need to sort out …” “I can now indicate that I am honored to be considered for a second term,” she said. The DG claimed that “two years ago, on 17th June 2022 in Geneva, we delivered a successful 12th Ministerial Conference adding a new multilateral agreement “the Harmful Fisheries Subsidies Agreement” to the WTO rule book after a decade of no new multilateral agreements.” Without two-thirds of WTO members ratifying the Fisheries Subsidies Agreement that was agreed on 17 June 2022, the agreement cannot become part of the WTO’s rule-book, said a legal analyst, suggesting that it is rather inaccurate to claim that the first phase of the agreement has been inserted in the subsidy rules. Ms Okonjo-Iweala touted that “members also delivered 8 more multilateral declarations and decisions, among them two to be highlighted: the decision to allow World Food Program food purchases from WTO members to be unhindered by export restrictions and the decision to exercise more flexibilities in the TRIPS Agreement [on] Covid-19 Vaccines (TRIPS Waiver).” She further said that “both decisions were designed to support vulnerable populations to deal with food insecurity and a life-threatening pandemic situation.” According to several trade envoys, while the decision concerning the World Food Programme remains only on paper, the decision on the extension of the MC12 Ministerial Decision on the TRIPS Agreement to COVID-19 diagnostics and therapeutics has failed to materialize as the US and some other major industrialized countries like Switzerland, the United Kingdom, and Japan blocked it at several GC meetings. “Internally,” the DG said, “we have delivered some important reforms to strengthen the way the Secretariat functions to serve members, including the crafting of the first ever WTO Secretariat 2030 Strategy, and the [creation] of an Artificial Intelligence and Frontier Technology Unit.” However, she did not indicate how costly was the project undertaken by the management consultancy firm McKinsey & Company for reforming the Secretariat and how it has been beneficial, said a staffer, suggesting that the independence and impartiality of the Secretariat appears to have been compromised during her three years in office. ABU DHABI MINISTERIAL Ms Okonjo-Iweala acknowledged that at the WTO’s 13th Ministerial Conference (MC13) that concluded in Abu Dhabi on 2 March, “we achieved a partial success, with a multilateral decision (after almost a decade of negotiations) on a suitable transition period for graduating LDCs to continue to access flexibilities open to LDCs.” Further, according to the DG, “we extended the moratorium on charging customs duties on electronic transmissions, confirmed the work undertaken on WTO reform and reaffirmed the imperative to deliver on the most important reform of our Dispute Settlement System by 2024.” The ongoing dispute settlement system reform process is unlikely to deliver on a binding two-tier dispute settlement system, as one major member seems determined to attenuate it, said people familiar with the discussions. In her communication, the DG mentioned that “some 125 Members continue to work on inserting the plurilateral Investment Facilitation for Development Agreement [IFDA] into the WTO rule book, and we definitely need breakthroughs on the very important Agreement on Agriculture after more than 25 years of negotiations”. “Ministers instructed that unfinished work be taken back to Geneva and completed.” While the DG seems to be openly supporting the IFDA even though it remains a non-mandated issue and is allegedly contrary to the WTO rules, the future of any breakthrough in agriculture at the WTO remains rather bleak, said some trade envoys, who asked not to be quoted. Lastly, Ms Okonjo-Iweala said that “the global outlook confronting multilateralism, and in particular, the Multilateral Trading System is challenging and uncertain.” “But in these challenges, I see opportunities for the WTO to contribute to the solutions of real-world problems even as it reforms to be fit for purpose for the 21st century. I would like to continue to be part of this chapter of the WTO story and stand ready to compete again for the position of WTO Director-General as I did when I was first appointed.” However, the “facts on the ground”, a term often used by the famous economist John Maynard Keynes, suggest that at a time when the largest trading nation is preparing to impose 100 percent tariffs on Chinese goods and when the WTO’s enforcement function is almost dysfunctional, the future of the WTO appears to be irreparable, said several people who asked not to be quoted. +
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