LAST week, the United States blocked the appointment of Ngozi Okonjo-Iweala, former Finance Minister of Nigeria and a former managing director at the World Bank as the next Director-General, World Trade Organisation- the international organisation responsible for setting and upholding the terms, conditions and legalities on which trade is being carried out by her member nations in the international market and economy, despite winning the overwhelming support of the organisation’s 164 members.
With no consensus reached, Okonjo-Iweala is just a step away from becoming the first woman and the first African to head the international trade watchdog after securing the support of key group of trade ambassadors in Geneva, against her rival, Yoo Myung-hee, the South Korean Trade Minister. According to sources, she is backed by countries in the Caribbean, Africa, the European Union, China, Japan and Australia .
Having failed to gain the support of the United States, who went in for the candidacy of Yoo Myung-hee, she is to wait for the meeting of the organisation’s general council on November 9, 2020, to ascertain her appointment for the high level profile job.
In a statement released to defend US objection of Okonjo-Iweala, the United States Trade Representative’s Office confirmed Washington’s support for Ms Yoo, describing her as a “bona fide trade expert”, and arguing that the World Trade Organisation was facing a “difficult time” and should be “led by someone with real, hands-on experience in the field”.
The United States actions raised much dust here at home as most public opinions cling the issue that the government of the United States was playing the card of racism in the selection process of the Director-general of WTO. To some, having recently earned the United States citizenship, it’s derogatory for the US to pick Ms. Yoo over her as the job she has done over the years speaks much volume in itself.
Again in some quarters, there was news flying that Ms Yoo possesses an inferior qualification to Okonjo-Iweala’s. This is false in its entirety as Ms Yoo has been a trade expert with 25 years experience with her leading the Korean delegates in negotiating the South Korean- US trade agreement in 2018.
With racking emotions, it is important to note that just like politics at home, interest determine policies and decisions state actors consider in international politics, economy and trade- as both concepts are intertwined. It is this interest that the government of United States is guiding and would go to any extent to protect.
On the international stage, every nation strives to protect her interest with the politics of who heads the World Trade Organisation, one of the many struggles where lobbying, alignment and realignment seem inevitable. With the knowledge of the doctrine of non-alignment no longer sacrosanct on the international political stage and her personal experience in the race for the World Bank’s Presidency in 2012, she opted for the US citizenship to ensure that such loophole she had in her last outing is not entertained.
The objection of Okonjo-Iweala’s candidature by the United States is one of the few effects of the trade war between the United States and Chinese governments in recent times on the international scene. Both nations are putting their wits and strengths to maneuver each other politically which would in turn reflect on their respective economic strength and potentials.
The Chinese Government had earlier vetoed US proposal for a US citizen, Alan Wolff, to step in as the interim DG of the WTO. These acts of power struggle have seen allegations and counter-allegations from both political blocs.
The World Trade Organisation was established in 1994 with much influence and backing from the United States and European Union to ensure the advancement of liberal trade ideology. At inception, the organisation promised to encourage healthy trade competition and to open up markets for member states, thereby endorsing globalisation. As at the time of the signing of the WTO treaty in Uruguay, it seemed to be a victory for economic liberalism. With the US and European Union dominating the global gross domestic product and the purchasing power parity as at that time due to their markets, it aided them to dictate the tune of the global trade.
To join, having not been an original member of the trade organisation, China agreed to the protocols set up by the WTO in 2001, which includes; to open its markets to eliminate State monopolies on imports and exports and to significantly changed its laws, regulations and practices ( George Shaffer & Henry Gao; 2018). The US and European Union had also hoped to use the opportunity presented by the admission of China into WTO to persuade her to convert to a market economy and liberal democracy.
The advent of the 2009 global financial crisis saw the emergence of China as a true economic power as not only did the crisis destabilise the European Union’s economy, it dealt grievously with the US economic power too. From then onwards, China asserted its rights as a rival to the United States. By 2010, China had become the global second largest economy displacing Japan and in 2013, it became the world’s largest trader in goods (George Shaffer & Henry Gao; 2018). With the current projections, China would become the world largest economy by the year 2028.
In what seems to be an unending trade war between the United States and China, the Donald Trump led administration, which tilts towards nationalism and protectionist policies have accused the Chinese government of manipulating their currency, thereby making it almost impossible for other nation’s companies to compete while also engaging in forceful transfer of technology.
Following various reports, Trump ordered the imposition of tariffs on Chinese products, the arrest of a top executive officer of Huawei, a leading technological firm in China, the filing of a WTO case against China and restrictions on Chinese investment in high-tech sectors of the US economy. In recent times, the Trump administration has accused China for deliberate manufacture of the coronavirus (COVID-19) as a tool for economic warfare to destabilise other nation’s economy.
The US had equally called on her allies to boycott any trade agreement with the Chinese. On the other hand, the Chinese has argued that the allegations of the US is to stifle and limit its economic growth on the global stage while arguing that the US government has made it difficult for consensus between the two nations to reached.
As United States government turns towards nationalistic and protectionist approach in her economic deals, it would be difficult for Okonjo-Iweala to gain US blessings for the job, although not impossible. In her previous job as the managing director of the World Bank, she was a proponent of globalisation, urging the developed world to aid the less developed countries through aid, technology transfer and loans. Unlike the United States, the Chinese are unperturbed by the system of government practiced by a country before lending loans as much as it doesn’t deter their economic interest.
This has led to massive increase in Chinese bilateral trade, especially in Africa over the past two decades. Also back home, the Buhari led government has in the last six years, turned towards China for loan grants and other bilateral trades. Of recent, the Nigerian government stood vehemently against the United States proponent of re-investigation of Akinwumi Adesina of the African Development Bank and even saw it through that he got re-elected for a second term in office.
To this effect, the United States stance against Okonjo-Iweala may be to exert power, influence and strength on a nation that went against her in the last outing and tend to engage in more trade deals with the Far East nation, China in recent times. The US having so much interest to protect wouldn’t key in except when certified that her interest would be protected.
On the other hand, South Korea is a great ally of the United States on the East Asian region. The USA has stood behind South Korea and invested in the country’s economic development and security since the 1950-1953 Korean War.
The USA currently has a 28,500-persons strong military presence in South Korea (Arbiterz.com). With their help and various bilateral agreements, the US has been able to checkmate China’s economic and political activities around the region. The emergence of South Korea’s Ms. Yoo as DG, World Trade Organisation will not only foster their political relations but will advance US dominance of the global trade against the Chinese.
Further, there has been a notion amongst political and economic analysts that the confirmation of Okonjo-Iweala as the Director-General of the WTO depends on the outcome of the United States presidential elections.
While this might be true, it doesn’t change that America’s sole interest is to be and remain at the top of the food chain in the global politics and economy – whatever the outcome of the election might be, America will always protect her interest. Moreover, if Trump loses his re-election bid, his Presidency still has up to January 20, 2020, to preside over the activities of the White House and with his personality traits, Trump hardly moves on his stance.
The World Trade Organisation is a very sensitive organisation where there is constant heat of power play as nations try to maneuver, outplay and override each other’s interests. To some extent, these activities of the WTO seem to be of great importance to state actors than the United Nations’.
With the hope that Dr. Ngozi Okonjo-Iweala emerges as the DG, WTO on November 9, 2020, when the general council meets, there is likely to be new sets of alignment, realignment and trade agreements but whatever the outcome may be, it is important to note that it is the various interest of state actors that determine who gets what, when and how on the global economic and political scene.