Amina Mohamed: ‘The WTO needs to be reformed, it’s credibility is at stake’

Having mastered the technical details of the WTO after chairing many of its top committees, Mohamed advocates a thorough-going reform of the organization.

She sees the role of the next director-general job at the WTO as energising the organization, encouraging the uptick in trade facilitation and rejection of the trade restrictions introduced in the early days of the pandemic this year.

After months of discreet campaigning by contenders for the director-general job at the WTO, Mohamed is one of three front runners in elections for the post next month. All are women, the other two are Nigeria’s ex-finance minister Ngozi Okonjo-Iweala and South Korea’s Trade Minister Yoo Myung-hee.

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Mohamed’s big political challenge is to win support from both the United States and China, now locking horns in a trade war, as well as the majority of Africa’s 54 states. To do that she has to convince members that she has a plan to unlock the WTO’s paralysis, caused by the US’s refusal to nominate representatives to its Appellate Body, its main dispute-resolution mechanism, which Washington says has over-reached its mandate.

Chairing the WTO’s ministerial meeting in Nairobi in 2015, gave Mohamed direct experience of the high-stakes negotiation over matters such as agricultural subsidies, e-commerce, and intellectual property rights.

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Diplomats reported that Mohamed had mastered the technical components of the director-general role during interviews around the WTO’s in Geneva. The outstanding question was one that they are asking of all the contenders: who has the political weight to help resolve trade disputes between some of the world’s biggest economies?

In a virtual interview with Kenya’s Amina Mohamed, The Africa Report had a chance to discuss her vision of the WTO.

The Africa Report: Is the World Trade Organization still relevant in an era of economic nationalism and a trade war between the world’s biggest economies?

Amina Mohamed: The WTO must regain its centrality in global economic governance. For that to happen, the WTO must be reformed, so that its rule-making function is revived, extending the rule book to new areas, such as e-commerce and strengthening existing rules. The fisheries negotiations should be concluded as soon as possible and there should be movement in agriculture.

If the agreements that are being negotiated on e-commerce, investment facilitation and domestic regulations in services could then be extended to the membership on a Most Favoured Nation basis, countries can accede to them when they’re ready.

It’s also important to fix the Appellate Body crisis and enhance the deliberative function of the WTO bodies.

The United States is refusing to nominate representatives to the Appellate Body and has blocked its working. How will you resolve this?

US has raised systemic concerns. I believe very, very strongly that the systemic concerns raised by some members must be addressed and particularly as they relate to judicial overreach. This means that the Appellate Body should respect the mandate. Because the mandate was negotiated very carefully to ensure that we had a balance of rights and obligations that cannot be moved away by the Appellate Body.

Can there be a quick resolution to this dispute?

If a member of the WTO raises issues I think it’s fair that those are addressed, especially if they touch on the credibility of the organization and the legitimacy of decisions taken by the dispute settlement system. There are proposals, significantly by the Ambassador David Walker [of New Zealand] that would provide a firm foundation on which we can move on reforming the appellate body.

Is it possible that the disputes within the WTO could result in a major member state quitting?

One needs to remember the reasons why the multilateral trading system was created, after the Second World War. It serves a very useful role and I do not think it’s likely that members of the WTO would want to change their status.

The US is an original member of the WTO, a steadfast supporter of the rules-based multilateraltrading system. Working through the WTO, the US and any other country for that matter are able to protect and advance interests of their businesses and workers, while opening markets across the world.

It’s true that the WTO needs to be reformed; it’s credibility is at stake. Every effort should be made to revive it. Its rulemaking function needs to be restored. There are areas where no rules exist and we need to negotiate new rules. We need to do a lot of work to ensure that the WTO again commands the confidence of all its members.

Many countries are negotiating bilateral trade agreements, it seems out of frustration with the WTO and regional trade pacts. Your own country Kenya is negotiating bilateral trade agreements with the US and the United Kingdom. Does this contradict your support for multilateral trade accords in the WTO and Africa’s Free Trade Area?

No, no, there’s absolutely no contradiction. We’ve had regional trade agreements going back many years even as we negotiated multilateral trade agreements. Regional agreements with their more located focus can never be a substitute for the WTO.

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They can go further in some cases and they can take care of local issues. Regional trade agreements can be building blocks for the multilateral trading system, as long as they comply with WTO rules, they are likely to strengthen the multilateral trading system. It becomes a violation if it distorts trades, if it in any way closes the market completely to other members of the WTO.

The global pandemic has spurred countries to boost local production and some market protections, and more governments show scepticism towards global supply chains. Does that threaten the ethos of the WTO?

The WTO does not constrain the local production capacity of countries. If you’ve undertaken a commitment to keep your market open, you should. If in accordance with legal provision you restrict your market or prohibit entry of some products into your market, it has to be notified to all the members. And that measure can’t last for too long, because then it will distort trade.

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By countries respecting their commitments, they cannot exceed their tariffs, or they cannot provide illegal subsidies to their industries. The WTO expects trade to rebound next year. I wouldn’t worry about local production interfering with global supply chains. I would worry if commitments were being ignored, or measures were put in place to restrict and prohibit trade for long periods of time, and if trade was distorted, affecting the balance of rights and obligation of countries. But right now we are seeing many more trade facilitating measures being put in place, rather than trade restrictive measures put in place at the beginning of the pandemic. And most countries have retreated from that and they’ve opened up their market again.

Globalisation has been under fire, especially in the decade since the western financial crisis in 2008. Do you see a radical restructuring of globalisation, or even widespread rejection of its tenets?

What we need to do is to ensure that the benefits from globalisation are spread out, both within countries and among countries. There’s a backlash because there’s a perception that there are inequities caused by globalisation. If we put in place targeted measures to ensure that the gains from globalization are evenly distributed, we would see less of the criticism. There is no region that should retreat from globalisation. A multilateral trade liberalisation, opening of markets, creating of jobs, the increasing GDP of countries has been good for all of us.

How do you think developing countries see the WTO as economic nationalism grows in popularity?

There are 164 members of the WTO and 20 that are waiting to come on board. The realisation, not a perception, that multilateral trade has been a force for good and has transformed economies in many parts of the world  makes the WTO an attractive destination for many countries.

There are common interests, and of course individual interests, but the WTO agreements take care of all of that. They even have flexibilities and special and differential treatment provisions that target the poorest of our countries. There are capacity building opportunities and technical assistance.

WTO members are yet to agree on the Doha round of trade negotiations started almost two decades ago. Given the radical global changes since then, should those negotiations be abandoned and a new framework established?

That’s for members to decide. The Doha Round was launched in 2001; it was scheduled for completion in 2005. It remains unfinished. What matters most is not so much the form, but that we engage in the substance of work to reach our members and look for ways of reaching agreement.

Maybe there’s a perception that WTO agreements have not struck a proper balance between rights and obligations of members and that they have not taken into account the developments in the global economy. So it would be very important for us to address this fundamental concern. And we can address it by all the members of the WTO adopting trade facilitating measures.  So that these agreements that we are discussing can be fair and they can be equitable.

Running the WTO is said to be one of the toughest international leadership posts. What would you bring to the organization?

I’ve delivered for the WTO and I would do so again if elected as the new director-general. I have chaired almost all the top decision-making bodies of the WTO, including the ministerial conference, the general council, the dispute settlement body and the trade policy review body.

I’m aware of the workings of the WTO, that decisions have to be bottom-up and the process must be inclusive. I have the required political skills, having been a minister in Kenya, interacting with global leaders. I will utilise all the knowledge and skills that I’ve acquired over the years to ensure that the WTO is revived to address the challenges of the 21st century.

I chaired a ministerial meeting (of the WTO) that was very successful, that prohibited export subsidies, and that adopted the information technology agreement. I would want to be judged as an experienced leader, that can offer a fresh perspective, that is broad and inclusive set against a legal background.

In this climate of increasing global competition, how would you balance the sometimes conflicting interests of the WTO members?

The director-general serves the entire membership without fear or favour. All WTO Members agree that the organization needs reform. They may have different ideas as to how this should be carried out but there is agreement that the rule-making function needs to be revived.

The global economy is increasingly being digitalized and the WTO will need to have comprehensive and coherent rules on E-Commerce while also coordinating efforts to address the challenges linked to the digital divide.

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Some of the existing rules also need to be upgraded to make them fit for purpose. There is also broad agreement on the need to restore the two-stage dispute settlement system. There is also broad agreement to enhance transparency and the deliberative function of WTO bodies. The role of the DG is to enable resolution by supporting and facilitating discussions among Members in an honest, transparent and inclusive manner.

As a representative from Africa, regarded as independent from the principals in the current trade war, do you have a built-in advantage in the director-general’s election?

In selecting the next director-general, members would be interested in selecting the most competent candidate. If the person happens to be an African and a woman so much the better as diversity in WTO leadership would strengthen the rules-based multilateral trading system.

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Africa is determined to use trade as an engine of economic growth and development. A priority for Africa would be to have a fully functioning multilateral trading system. An African is more likely to be an honest broker to reach balanced agreements which would serve the interests of all Members. A director-general has the soft power to convene, persuade and seek convergence among Members. It is important to have someone that understands the system from the inside but has also worked outside the system. I was Assistant Secretary General of the United Nations, Deputy Executive Director of UN Environmental Programme, and I was also Minister of Foreign Affairs and International Trade for five years.

Will the economic damage wrought by the pandemic make it easier to reach new trade agreements.

We hope the economic challenges brought by the COVID-19 pandemic will concentrate minds. In the immediate aftermath of COVID, several WTO members adopted trade restrictive measures. These impacted negatively on trade flows leading the WTO Secretariat to predict initially that world trade will contract between 13 to 32%.

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It now expects trade to contract by 18%, as a result of the measures implemented by Members. The good news is that several Members have started to roll back restrictive measures. The WTO recently reported that overall, more Members have adopted trade facilitating measures than trade restrictive measures.

We should all learn from this crisis. There is also a clear need to extend the WTO rule book to new areas such as E-Commerce and climate change, as well as upgrade existing rules governing agricultural and industrial subsidies.

How would you see your role as director-general of the WTO – short-term crisis management to end the paralysis or a longer term plan to restructure the organization?

My role, if selected, would be to facilitate and build bridges in support of re-energising the work of the WTO. The Members will of course need to quickly focus their minds to carrying out the urgent reforms needed and prepare for MC12. If I’m selected, they would have an assertive but sensitive and reasonable director-general to support their efforts

In the short term, WTO Members will need to adopt trade facilitating measures to increase trade flows which [to] assist in recovery from the pandemic. WTO members will have to prepare by concluding negotiations on fisheries subsidies, make movement on agriculture and in the ongoing plurilaterals on micro, small and medium enterprises and on Gender, whose benefits cam be distributed to all Members on a Most Favoured Nation basis.

Do you think that Africa is risking its chances of winning the WTO’s top job by failing to agree on a single backed by its 54 states?

Africa has put up three highly qualified candidates.

The African Union recently announced that despite concerted efforts to agree on a single candidate, it could not do so.

I am confident however, that the Membership will consider each candidate and make a decision on who would best serve the interests of the organization at this crucial time of reform, recovery and renewal.