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TWN
Info Service on WTO and Trade Issues (Nov24/19) Geneva, 28 Nov (D. Ravi Kanth) — Members of the World Trade Organization will decide on 28 November on whether to extend a second term for the incumbent WTO Director-General, Ms Ngozi Okonjo-Iweala, amid an announcement by United States President-elect, Donald Trump, that he will impose in January next year unilateral tariffs on all goods coming from Canada and Mexico, as well as China, said people familiar with the development. In a post on his social media site Truth Social, Trump said, “as everyone is aware, thousands of people are pouring through Mexico and Canada, bringing Crime and Drugs at levels never seen before.” “On January 20th (2025),” he wrote, “as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States, and its ridiculous Open Borders.” Trump also announced that he will impose tariffs to the tune of 10% on all goods coming from China over and above the existing high tariffs imposed by outgoing President Joe Biden. Interestingly, the additional 25% tariffs to be imposed against Canada and Mexico, the two largest trading partners in the United States-Mexico-Canada Agreement (USMCA), could portend chaos in the global trading system. BIDEN’S SUPPORT OR SILENCE? Meanwhile, in a “selfie” with the outgoing US President Biden put out on X (formerly known as Twitter), the incumbent DG, Ms Okonjo-Iweala, a dual citizen of Nigeria and the US, claimed that it was a “lovely meet with H. E. President@Joe Biden on the sidelines of the G20 to thank him of his support@WTO”. She also mentioned in the “selfie” of her meeting with the Prime Minister of Norway@jonasgahrstore, whose trade envoy to the WTO is currently overseeing Ms Okonjo-Iweala’s selection process for a second term amid a seemingly flawed process. These two developments, though unrelated, suggest in their own way what is in the offing for the global trading system, particularly the WTO, which is facing an existential crisis on several fronts. During the first four years of Ms Okonjo-Iweala’s leadership, two ministerial conferences were held, one in Geneva in 2022, and the other in Abu Dhabi in 2024, with seemingly “half-baked” outcomes and continued stalemate in various other areas of the negotiations, including fisheries subsidies. The “selfie” with the outgoing US President Biden suggests that the US could support Ms Okonjo-Iweala for a second term on 28 November, by seemingly ignoring its earlier reservations that the DG selection process “was based on the Chair’s assumption of convergence, rather than consensus”. Later, the outgoing US trade envoy to the WTO, Ambassador Maria Pagan, at a small-group meeting of trade envoys, severely criticized the GC chair, Ambassador Petter Olberg of Norway, for not following the Procedures for the Appointment of Directors-General, as laid out in document WT/L/509, said people who took part in that small-group meeting. The GC chair appears to have “bulldozed” through the DG selection process, which seemed more like what happened on climate finance at COP29 that concluded in Baku, Azerbaijan, five days ago, said a person who asked not to be quoted. If there is a lesson for developing countries at the WTO, it is that the current DG, in her first term, seems inclined to advancing issues of priority to the industrialized countries, as she did with the TRIPS outcome on COVID-19 vaccines or even the first wave of the Fisheries Subsidies Agreement at the WTO’s 12th ministerial conference (MC12) in Geneva in June 2022, despite asymmetries in the outcome, the person said. Although she was elected with large support from developing countries in 2021, following approval from the Biden administration, in contrast to the fierce opposition from the first Trump administration, each of the DG’s pronouncements appeared to center on how to promote the interests of the developed countries, said another trade envoy, who asked not to be quoted. As reported in SUNS #9287 dated 17 February 2021, in her acceptance speech delivered at a special General Council meeting on 15 February 2021 immediately after being appointed as the new DG, Ms Okonjo-Iweala had said that the developing countries that currently avail of special and differential treatment (S&DT) should consider withdrawing voluntarily from their S&DT entitlements, as was done by some developing countries such as Singapore, Korea, and Brazil. (Brazil recently clarified that it is unlikely to give up its S&DT rights.) In her acceptance speech, the DG had suggested that the trade ministerial conference taking place biennially as set out in the Marrakesh Agreement, can be held annually, while arguing for reforms to strengthen the WTO Secretariat, including in the areas of transparency and notifications. Later, Brazil along with several members of the “Friends of the System” group made some efforts to switch to annual ministerial meetings, a proposal that was rejected by developing countries. In her acceptance speech, the DG praised the WTO Secretariat for its high-quality work, suggesting that they could play an important role in the regular monitoring work. Yet, Ms Okonjo-Iweala is understood to have spent around $1 million in commissioning the management consulting firm McKinsey & Company on reforming the WTO Secretariat. The results from the McKinsey report, though kept under wraps, are anything but helpful for the organization, said a former WTO staffer, who asked not to be quoted. In the same acceptance speech, the DG had expressed concern over the application of the consensus principle in arriving at decisions at the WTO, said another trade envoy, who asked not to be quoted. In her acceptance speech, Ms Okonjo-Iweala highlighted her other main priorities such as advancing the informal Joint Statement Initiative (JSI) work on electronic commerce to facilitate the inclusion of micro, small, and medium enterprises (MSMEs) and women in international trade, investment facilitation for development and the conclusion of the plurilateral agreement on domestic regulation on trade in services, among others. As regards WTO reforms, she suggested that the special and differential treatment for developing countries based on the self-designation basis, as set out in the Marrakesh Agreement, is a “divisive” issue. (In a related development, the facilitator overseeing the discussions on reform of the dispute settlement system, Ambassador Usha Dwarka-Canabady of Mauritius, has been recalled by the new Mauritius government with immediate effect, a Mauritius official told the SUNS on background basis.) During the first four years of her term, the DG stuck to these priorities with little or no success, said a former trade envoy, who asked not to be identified. It is against this backdrop that members, particularly the developing countries, have to make a careful assessment on whether another term of four years for the WTO DG will make matters better or worse for safeguarding their interests at the WTO, said people familiar with the development. More so, when Ms Okonjo-Iweala was vehemently opposed by the Trump administration before it lost the US elections in 2020, and with the latest spate of proposed unilateral actions by the incoming Trump administration against countries on political grounds, said people familiar with the development. According to a post on his social media site, President-elect Trump has picked Jamieson Greer, who served as chief of staff to Robert Lighthizer, the US Trade Representative (USTR) during Trump’s first term in office, as his USTR. Given the fact that the DG selection process was allegedly advanced by the European Union, China, and other industrialized countries in the “Friends of the System” group while using the African Group’s request to advance the DG selection process as “a ruse” to ensure her a second term and present a fait accompli to the new USTR, things could worsen further with a likely showdown between the US and the WTO, said people familiar with the development. Such a showdown, as and when it happens in the coming days and months, could further reinforce the Trump administration’s pronounced negative stance towards the WTO and the WTO DG, said people familiar with the development. +
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