It’s now down to two women in the race to become the next head of the World Trade Organization. Nigeria’s Ngozi Okonjo-Iweala and South Korea’s Yoo Myung-hee are the final two which means a woman will lead the organization for the first time in its 25 year history.
While this is an historic achievement in and of itself, it won’t make the task that lies ahead any easier. Indeed, the challenges the WTO faces are numerous. Here are three immediate issues that need to be tackled if the WTO is going to once again be relevant in global trade.
1. Improve the WTO’s effectiveness
There’s no question that global trade needs an effective set of rules, mechanisms to enforce those rules and that its members need to understand what the rules are. While this may seem like a no-brainer, these basics are currently lacking at the WTO.
The U.S. blocking of new appointments to the Appellate Body has all but crippled this vital function. But the problems existed long before this. Members are constantly trying to track what policies others are pursuing that may impact the flow of trade.
Without rules, players and a referee, there is no game at all. This is troubling for the global trading system, especially since the COVID-19 crisis has demonstrated so clearly that goods such as food, PPE and other essentials are most abundant and best priced when trade isn’t restricted.
An effective WTO at the forefront of these issues when the hard work of global economic recovery gets underway would be a good way for it to once again play an important role in global trade.
2. Enhance transparency and accountability
Members of the WTO often complain about the same things. They find the governance structures outdated and they don’t know what other members are doing until it’s too late and trade has been obstructed.
Others decry the length of time it takes simply to hear cases and make rulings. It’s not uncommon for trade disputes to take years to resolve which hurts the parties involved and contributes to a general sense of uncertainty which businesses loathe.
Bringing this organization into the 21st century is long-overdue; we’re 20 years into it after all. But many will agree that it’s better late than never and that’s why improving transparency and accountability will be one of the top priorities for the new DG.
3. Revitalize a global free trade agenda
In addition to the WTO being an effective referee and modernizing its governance structures, it can also reclaim its relevance by actually advancing trade liberalization among its members.
The long-stalled Doha Round – the last major imitative to try and lower trade barriers around the world—has been stalled for nearly twenty years. While pessimists may believe that the current pandemic crisis will make countries turn inward and pursue protectionist policies, optimists believe that free and open trade may be the shot in the arm the global economy needs.
The WTO successfully quarterbacking global free won’t be easy but that doesn’t mean it’s not worth giving it a try.
The WTO has said the next phases of the DG selection process will begin later this month with a winner announced in early November.
The timing is ripe for the next DG to get ambitious, seize opportunity and restore the role the WTO should be playing in the global trading system. Failure to do so may inevitably lead to its demise.