Which WTO Chief Candidate Should Pakistan Support?

When the World Trade Organisation was established in 1995, its architects intended it to become a fundamental pillar of global peace and prosperity.

However, in the past few years, during an era of discord over globalisation,

its ability to achieve that important goal has been undermined by rivalry between the United States, China and the European Union.

Now, two intelligent, experienced and impressive women – South Korea’s Yoo Myung-hee and Nigeria’s Ngozi Okonjo-Iweala – claim that they set the WTO back on course.

The members of the WTO, made up of representatives of 164 different jurisdictions, must reach a consensus on which person should be its next Director General by October 27th, 2020. Lobbying is in the final stages and telephone calls are taking place between presidents and prime ministers.

Asia or Africa?            Pakistan has been a full member of the World Trade Organisation since its inception. Its permanent mission is led by Prime Minister Imran Khan, supported by ambassador Dr Muhammad Mujtaba Piracha. I expect that they may prefer a candidate from Asia. They are also likely to be impressed by the skilful way South Korea has handled its relations with both the United States and China, which are Pakistan’s two leading trading partners.

The nationalities of the candidates are influential, but I believe it is just as important to consider their professional track records of the women and the particular qualities they could bring to the role.

Yoo Myung-hee, South Korea’s trade minister, has a deep knowledge of the processes which guide the multilateral trading system, having specialised in that area since the mid-1990s. During that time, South Korea has risen up the economic ranks to become one of Asia’s richest nations, largely through trade, matched by patient diplomacy. 

Ngozi Okonjo-Iweala has less in-depth knowledge of trade policy but is an impressive communicator. She is also a highly educated economist and a former finance minister. During a webinar organised by Chatham House in July, she brushed off claims she lacks experience as a trade minister or negotiator. “I’ve been doing that all my life, working on trade policy issues,” she said “Most of all,” she said, “the choice for director general should go beyond technical skills – you need boldness, courage,” she said.

Pakistan’s Choice.      Pakistan’s choice of candidate is not straightforward. The reality is that trade with South Korea and Nigeria is of little significance to Pakistan’s economy. It enjoys cordial diplomatic relations with both countries, but it does not have a deep relationship or alliance with either.

In such circumstances, Pakistan is likely to consult with China – which Prime Minister Khan regards as an “iron brother” – before making its decision. Some China-watchers believe the African candidate is Beijing’s favourite, especially as she might be persuaded to appoint a Chinese person as her deputy director general if she wins.

However, it has emerged during the campaign that Ms Okonjo-Iweala holds a passport from the United States. This will not sit well with China, which encourages its friends to stand up against US pressure within the WTO. In his speech to the Republican party convention in August, President Trump said that China’s entry into the WTO was “one of the greatest economic disasters of all time.” He claimed that the WTO’s failure to hold China to account for breaches of trading rules has forced America into a highly disruptive trade war with its rival.

The US is the largest financial donor to the WTO, after China. Trump has threatened to block its budget, as well as prevent the appointments of senior staff.

Building Bridges.        South Korea is at something of a crossroads. It is a military ally of the United States. Yet China is by far and away South Korea’s most important trading partner. In recent years, the country’s leader President Moon Jae-In, has been careful not to join the chorus of anti-Chinese rhetoric, preferring to stick to a cautious middle ground. Minister Yoo strikes a similar moderate tone, presenting herself as a “bridge” candidate, aiming to overcome the divide between the US and China, and also between rich countries and developing nations.

This approach has impressed the WTO members so far, enabling her to reach the final two candidates. I am somewhat surprised that she has reached this stage, considering that she was initially dismissed as something of an outsider. Now I take the view that she might just win the race, provided she can revive enthusiasm for multilateral cooperation. 

As Minister Yoo seeks support from representatives of developing countries, she reminds them of South Korea’s economic progress since the 1950s, linked to increased trade. She told a webinar organised by Chatham House that “inclusiveness and sustainability” are important for the WTO because it should “address the concerns of people and countries which have not gained much benefited from trade.”

“Many countries believe that there is a positive role for the multilateral trading system and there are currently 23 aspiring members to the WTO. But the system needs to change, adapt and evolve, in step with changing realities and changing times,” Minister Yoo told Chatham House.

Remarkably, Minister Yoo also seems to have won the tacit support of Japan – despite intense rivalry between the governments in Tokyo and Seoul. I expect that her offer of rapprochement, based upon mutual trading interests, appealed to the pragmatic approach of the new Japanese prime minister, Yoshihide Suga.

Wealth of Experience.           In a recent editorial opinion piece on who should be the next leader of the WTO, the Financial Times noted that both candidates are eminently qualified and can cite a wealth of experience, which will build trust among the membership. The FT said that Ms Okonjo-Iweala “clearly possesses the skill of a dealmaker” and highlighted her experience in running a big international organisation, having chaired the board of Gavi, the vaccine alliance. She was also recently named the African Union’s special envoy to mobilise international support for the continent’s efforts to address the economic fallout of the coronavirus pandemic. 

From the Asian perspective, South Korea has proved to be one of the most successful countries in the world in controlling the spread of coronavirus. Despite facing multiple outbreaks of coronavirus, South Korea has recorded 24,805 cases and just 434 deaths, according to Johns Hopkins University, in figures published on October 13th 2020. South Korea is keen to share its sophisticated track and trace system with developing countries.

Corruption Record.        Another area in which South Korea scores well is the fight against corruption. South Korea ranked 39th on the global corruption index, published by Transparency International in 2019, an improvement of two places since the year before. Nigeria, on the other hand, languished in 146th position, 26 places on the table below Pakistan.

Critics of Ms Okonjo-Iweala claim that nearly a billion dollars a month went missing from Nigeria’s oil revenues when she was finance minister. “I think it’s a shame she is even being considered for the role of director of the  WTO ” Sarah Chayes, author of Thieves of State, a book about corruption, told AFP. 

I have tried to weigh things up as best I can in my capacity as the editor of a magazine about Asan politics called Asian Affairs. My conclusion runs contrary to that published in the Financial Times editorial, which said that Nigeria’s candidate “seems likely to have the edge”. I would say that

given her greater experience in the field of international trade, Minister Yoo has the edge. It also helps that South Korea’s status has risen, alongside its economic development, built on trade. I believe that support for Minister Yoo offers the members of the WTO the opportunity to learn from one of the architects of this impressive progress. She is an inspiration to Asia.

Of course, it will be down to Prime Minister Khan and Ambassador Piracha to decide which candidate Pakistan should support. I hope they will base their decision on the strategic best interests of the country, rather than choosing a pawn in the great geopolitical clash between China and the United States, which has knocked the WTO off course in recent years.