On Wednesday, the Trump administration blocked Nigeria's Ngozi Okonjo-Iweala from clinching the top global trade post, sending the troubled World Trade Organization into unchartered waters and further eroding its tarnished reputation.
WTO ambassadors told The Geneva Observer that, as the organization works on the principle of consensus, the matter could drift well into 2021 unless the US does a u-turn and lifts its veto.
"One delegation could not support the candidacy of Dr. Ngozi and said they would support South Korean (Trade) Minister Yoo (Myung-hee). That delegation was the United States of America," WTO spokesman Keith Rockwell told reporters shortly after an "informal" closed-door meeting of the WTO’s ruling General Council.
The meeting had convened to hear David Walker, New Zealand's WTO ambassador and chairman of the three-member selection ‘Troika,’ report on the results of the last and decisive round of consultations on the two finalists. Dr. Ngozi, the Troika reported "had by a wide margin the most preference, that she had wide support across regions and across all levels of development, LDCs, developing countries, and developed countries, they said that she had these since the very beginning of the process," Mr. Rockwell said.
African envoys pointed the finger at the US as the spoiler in a race the Nigerian candidate had won. "She got the broadest support, but the US objected,” a clearly irritated ambassador from an African country told The Geneva Observer, but added he was hopeful she would eventually emerge the winner.
However, a number of WTO ambassadors took aim at South Korea. "The Koreans should withdraw their candidate if they have any dignity," a veteran trade envoy from a developed country told the Geneva Observer.
Similarly, an ambassador from a country with very close ties to Seoul told The Geneva Observer, "I don't know why Minister Yoo did not withdraw," and faulted the normally savvy South Koreans for participating in a major diplomatic blunder.
Top envoys from major trading powers were puzzled why the US “left it so late” in the race to signal that they intended to veto the emerging front-runner.
The US Trade Representative, Robert Lightizer, released a statement supporting the South Korean: “Minister Yoo is a bona fide trade expert who has distinguished herself during a 25-year career as a successful trade negotiator and trade policy maker. She has all the skills necessary to be an effective leader of the organization.”
According to sources close to Washington, it's not that the Trump administration is adamant about the South Korean candidate but that they are more against Nigeria's Okonjo-Iweala. Well-informed diplomatic sources told The Geneva Observer that Lighthizer has personally led the last-minute charge against the Nigerian frontrunner.
Okonjo-Iweala, a former managing director of the World Bank and a former Finance minister of Nigeria, is viewed as too much of a multilateral free trader which is anathema for the managed trade protectionist Trump administration.
A formal meeting of the WTO General Council has been set for November 9, but envoys say don't hold your breath a solution will emerge.
Given that consensus is required by all members to even opt for a vote, the US has, as one trade diplomat put it, "the WTO at gunpoint."
The Trump administration thinks the WTO has failed to ensure that China—which joined in late 2001—plays by the rules and also thinks the WTO Dispute Settlement Body, especially its now totally paralyzed Appellate Body, have delivered findings that went beyond what was politically agreed in the historic Uruguay Round (1986-1994) to the detriment of US trade interests.
It added in its statement, “This is a very difficult time for the WTO and international trade. There have been no multilateral tariff negotiations in 25 years, the dispute settlement system has gotten out of control, and too few members fulfill basic transparency obligations. The WTO is badly in need of major reform. It must be led by someone with real, hands-on experience in the field.”
But it's not the first-time political gridlock over a new WTO leader has damaged multilateral commercial diplomacy. In 1995, the US, after objecting to the EU candidate, the late Renato Ruggiero, an Italian national, in the end, came around and lifted its objections.
Similarly, in 1998-1999, WTO was engaged in a bitter feud over who should get the job, with many members supporting Supachai Panitchpakdi of Thailand, and the US and many others supporting the late Mike Moore of New Zealand.
The impasse was broken with a compromise with the two candidates each given a three-year term. The bitter infighting over the leadership was largely responsible for the failure to launch a new round of trade talks during the WTO trade summit in Seattle in late 1999, which ended-up in a diplomatic fiasco and running battles in the streets.
The new selection rules crafted by WTO members in 2002 were meant to prevent a return to such diplomatic brawls. It remains to be seen whether the rules will prevail or not.