What matters when choosing the next WTO Director General
With the World Trade Organization (WTO) now looking for a new Director-General, now is the time to think big about how to reinvigorate the global trade body, use trade policy to speed the response to COVID-19, and ultimately make the trading system work for people and planet. But what does the appointment have to do with the price of fish?
This week, the WTO begins the formal process to appoint a new Director General. Applicants, beware. Even in the rosiest of economic circumstances, this is not a job for the faint of heart. Heading what is arguably the most important institution in global economic governance demands — as a baseline — strong leadership, deft diplomacy and a real sense for the art of a deal. But with geopolitical tensions high, the specter of a deep recession looming and protectionist sentiment rearing its ugly head, the stakes have never been higher. Simply put: the COVID-19 pandemic has made an already tough job all the much harder.
And at the same time, all the more important. As the key global trade policymaking body, arbiter of disputes and protectionism watchdog, the WTO has played a critical role over the last quarter century in enabling global economic growth and, in the main, guarding against asinine tariff escalations. But, to borrow a popular disclaimer from the financial word, past performance is no guarantee of future results. How the organization ultimately responds to the COVID-19 pandemic will be a key determinant in the economic recovery ahead.
The selection of the next WTO Director General is thus not a decision the international community should take lightly. While political considerations will inevitably factor into the appointment, this may be a choice that future historians point to as pivotal in shaping how the world recovers from the largest economic shock since the 1930s. This ultimately requires that institutional politics be put aside — and, by extension, that candidates be assessed squarely on their vision for the organization and their capacity to deliver meaningful results.
To this end, governments should judge candidates according to three main criteria. First, and most immediately, the next Director General will need a cogent strategy for enhancing the WTO’s role in enabling an effective trade policy response to the COVID-19 crisis. New transparency mechanisms to pin-point emerging trade barriers and a plan to remove export restrictions on medical equipment and treatments should be essential criteria. Visionary candidates with a strategy for heading off future life-threatening trade barriers — such as export restrictions on any future COVID-19 vaccine — should score extra points.
Second, candidates must show a clear vision for a comprehensive renewal of the WTO. Despite some notable successes, the reality is that the WTO has not fully lived up to its founding mission and purpose. Over the last 25 years, the WTO has made relatively little progress opening markets or writing rules to keep pace with the development of the modern economy. In essence, it has acted more as a backstop against regression than a vector of modernization.
This must change. The incoming Director-General must reaffirm the original purpose of the WTO — to promote trade liberalization, open-up markets and enable fair competition — while recognizing the need for trade to play a bigger role in addressing today’s social and economic challenges. Bonus marks should be awarded to those able to drive purpose-led reform and deepen stakeholder engagement.
Third, candidates should have a clear short-term agenda to bolster confidence in the WTO and re-energize the organization as the central forum for global trade rulemaking. While the organization has made welcome progress in a number of important fields over the last two years, serious candidates should have a clear roadmap to expand negotiations to cover a whole swathe of 21st Century trade frictions — as well as accelerating the pace of ongoing negotiations.
Which brings us, perhaps unexpectedly, to the issue of fish. For almost two decades, member governments of the WTO have been seeking to reach a deal to eliminate subsidies that drive overfishing and vast damage to marine ecosystems. After numerous failed attempts and false dawns, both the United Nations and the WTO designated 2020 as a “hard deadline” to get this agreement over the line. That target was set some five years ago, but all available intelligence suggests that a deal is further away than ever.
Never-ending discussions on eliminating harmful fishing subsidies are not a consequence-free diplomatic game. At current rates of extraction, conservative estimates suggest there will be no fish left in the sea by 2050. An ecological disaster in the making, to be sure, but one with grave economic consequences for the 3 billion people who depend on the oceans for their livelihoods. Moreover, in institutional terms, these negotiations are arguably an acid test of the WTO’s capacity to forge agreements that address major global challenges.
It’s perhaps propitious that the process to select a new Director-General of the WTO was opened on World Oceans Day. Or, you might well say, ironic. Whatever your take, real leadership will be needed to reel in a deal of such strategic importance.
The totality of this agenda may seem rather intimidating. But candidates should take comfort in the fact that the support of the global private sector is a given if the incoming Director General commits wholesale to an ambitious agenda from the get-go. The WTO, despite its many shortcomings, is more important to business now that ever. Governments must choose a Director-General capable of ensuring that trade can enable efforts to contain the pandemic and, ultimately, drive a rapid economic recovery. And, of course, please don’t forget the fish.
John W.H. Denton AO, Secretary General, International Chamber of Commerce