• 22:58
  • Monday ,17 August 2020

High Expectations on the New WTO Leadership!

By-Ahram- Magda Shaheen



Monday ,17 August 2020

High Expectations on the New WTO Leadership!

The World Trade Organization (the WTO) was not long ago the ultimate command in the international trading system. However, what it is witnessing now is the dwindling of confidence in its role and posture, as well as increased doubts about its capabilities to regulate international trade relations, which only compound fears that chaos will become the alternative. The world cannot dispense with the WTO as a regulator and supervisor of international trade relations.

It is well known that the organization extracts its strength from its unique judicial system, as it has a dispute settlement mechanism unparalleled in the multilateral system, which issues valid recommendations, and member states must resort to it or commit to compensation. Furthermore, its mandate as a forum for negotiation and setting international rules and regulations has given the organisation competency and proficiency that no other international organisation can subsume. Member states were contented with and committed to the rule-based international trading system as enforced by the WTO. The failure of the organisation to perform either of its two major mandates negatively affects the other and reduces its presence on the international scene.
The WTO operates by consensus, which is a curse and a blessing at the same time. It is true that the consensus rule reflects absolute democracy, but it also means, in principle, granting the right of veto to 164 member states, which eventually has impeded the organization from performing its negotiating role. Seeing the deteriorating role in enacting trade rules and regulations, the US, the real architect behind the establishment of the WTO, slowly distanced itself from it. The US even refused to renew the members of the Appeal body thus weakening further the WTO and exacerbating the trade war between the two trading powers, US, and China. The WTO by and in itself does not have the ability to prevent the outbreak of trade wars, but it can curb them and keep them under control if countries abide by its rules and recommendations.
That the United States  retreat from leadership should be viewed by the world community as an incentive and motivation for other countries, such as China, Japan, the European Union, India, Brazil, and others to join hands to enable the organization to fulfil the role assigned to it. Recognising that the US is no longer the only commercial power to design the international rules, the WTO membership perceives its right to participate in setting new rules to serve the interests of all the members fairly and equitably. Hence, it is important to rearrange the new balance of power to create a new trading system that is more responsive to the needs of its members and not to submit to the rule of haves and have-nots.
It is worth questioning why the organization has faltered in discharging its functions after the great success of the Uruguay Round of trade negotiations (1986-1994). The reasons lie in the persistence of some to include many topics on the organization s agenda that others perceived as irrelevant and would burden the organization and impede its work. Such issues include the environment, labour, and human rights, all of which are very important topics and have their own international as well as regional organizations and agencies. Hence, the overwhelming majority of countries preferred to keep these topics outside the scope of the WTO. This, on the one hand. On the other hand, is the conviction of developing countries that trade is not limited to promoting exports, but rather contributes to creating job opportunities and achieving development, leading to a welfare state. How disappointed were these countries when the developed countries ignored their demand to link trade with development within the framework of the Doha Development Round. Since then the WTO began to become paralyzed and immobile.
The Corona pandemic came to aggravate the ineffectiveness of the organization when countries moved to adopt protection policies and restrictive measures again, believing that globalization is in its last breath. The WTO failed to deal with the dynamic changes and the fourth technological revolution in the multilateral trading system, Internet issues, digitalisation, and electronic commerce. The world trading system needs a second wave of reform and restructuring to be consistent with far-reaching changes in international trade relations and to adapt to the new circumstances and adjust to the post Corona pandemic.
This leads us to the expected role of the new management of the organization, which is about to choose a new executive director from among eight candidates. We should be proud of our Egyptian candidate, Abdel Hamid Mamdouh for his knowledge and experience having worked for over 25 years in the organization, during which he held leadership positions and became familiar with its rules as well as its strengths and weaknesses. On July 31, the WTO General Council approved the steps to be taken in the final stage of the process of selecting the new director general of the organization through conducting individual interviews with the representatives of the member states and getting to know their preferences. This last stage of the selection will end in the first half of November, after which the Director-General of the organization will be chosen according to the majority voicing of the member states.
It is worth noting that after more than 25 years of the work of the organization, the African continent has not yet had the opportunity to occupy the post of director general. Instead of standing firmly behind one candidate, the continent has three candidates who will share the votes. They are the Egyptian candidate in addition to two women candidates. One of whom is the Nigerian candidate, who is the former Minister of Finance in Nigeria, and the Kenyan candidate, the former Minister of Foreign Affairs and Trade. There is also the British Liam Fox, a former Minister of International Trade and a member of the British Parliament, the South Korean candidate who is the present Minister of Trade. Another Mexican candidate, who was the chief negotiator for his country in the negotiations of the replacement of NAFTA, a new trade agreement between the United States, Canada and Mexico orchestrated by President Trump. The list also includes a former Moldovan foreign minister and Mr. Mohammed bin Mazyad Al-Tuwaijri, the former Minister of Economy and Planning in the Kingdom of Saudi Arabia.
The new administration of the organization faces two basic dilemmas, the first of which is the revival of the WTO as a negotiating forum and the acceleration of reliance on digital trade at a time when the vast majority of countries have not established the necessary national rules within the framework of their legislation. It is also imperative to rethink the consensus rule and the responsibility to devise new means of decision-making. This may be in the form of weighted voting or other mechanisms that are more suitable for successive international changes. Having experienced the disinterest of the US and its worldwide implications, it is vital to agree on a new leadership to lead and support this new phase of reform. The WTO remains a consensual reflection of members  desire to envision their new trade system, as trade in services and e-commerce will become the pioneer of integration and new globalization in the future. This is a point of strength for the Egyptian candidate as he has been director of the trade in services department in the organization for more than twenty years.