The New World Trade Boss

4 mins read

By Viktor Hellblom

“YOU ARE TALKING about a finance minister, but more than that someone who’s got something to say about the future of the world and the future of Africa”. Ngozi Okonjo-Iweala is a widely praised development economist with a background as finance minister and foreign minister of Nigeria, managing director of operations at the World Bank and now serving as the current head of the World Trade Organisation (WTO). This article sets out to understand Ngozi’s role in international politics, through her time as an anti-corruption reformist and dealmaker in Nigeria, fairtrade promoter at the World Bank to global trade defender at WTO. Receiving unanimous support from the WTO member states, is she a reformist who can reform WTO and help global trade weather the storms of protectionism, or is she a bland middleground candidate, a careful technocrat and traditional economist? 

First female finance minister in Nigeria, first female and African to head WTO, Forbes most powerful African woman of 2023. In the patriarchal society of Nigeria and in the white and euro-american centric institutions of the World Bank and the World Trade Organisation Ngozi has still been able to make a name for herself. As finance minister of Nigeria she got known for steering Nigeria away from soaring public debts and fighting corruption, negotiating a 31 billion USD debt-relief package, working towards more transparency in Nigeria’s infamously shady fuel and oil industries and reforming its financial system to have away with ghost government pensions schemes. Through her many years at the World Bank she focused on strengthening the position of smaller and vulnerable economies in the world economy through better market access and stronger productive outputs and exports. Before joining WTO she was the head of GAVI vaccine alliance, an organisation that aims to bring better access to vaccines in the global south and the co-chair of the climate change combat organisation Global Commission on the Economy and Climate. 

“In the patriarchal society of Nigeria and in the white and euro-american centric institutions of the World Bank and the World Trade Organisation, Ngozi has still been able to make a name for herself.”

Ngozi has since her appointment at WTO talked at length about the need for a fairer global economy and trade system. In a podcast episode with Foreign Affairs she developed on the idea of reglobalisation that she is spearheading at WTO: “we call it reglobalisation […] it’s imagining globalisation to be more inclusive and resilient”. The idea is that while countries, as the global pandemic and trade wars between US and China have shown, must diversify their supply chains and see to their own security needs the world economy has grown rich on trade and must not back away from it – “interdependence but not overdependence”.

She exemplifies this with how the US, EU, Korea and Japan in 2020 negotiated caps on industry subsidies that would complement the rules of WTO, which only bans certain types of strategic governmental subsidies. Implementing tariffs and countries doubling down on industrial subsidies continue to distort the world trade system in favour of certain countries. Talks of decoupling economies also contribute to creating trade blocks that risks costing the world economy immensely (according to IMF calculations as much as 7% of global GDP). So moving forward, as phrased in Ngozi’s WTO candidacy bid, reforms of the global trade system must focus on establishing trade deals and trade rules that do not disenfranchise small and vulnerable economies and enables more market access for these economies. She maintains that the world economy would benefit from more multilateral agreements on trade, rather than bilateral agreements that has been the trend in recent years, and which mostly favours a limited set of countries. 

Clearly international trade has its own set of challenges. The WTO boss however, also wants to emphasize the link between trade and other global challenges such as climate change and global health inequality. With her involvement in both vaccine distribution efforts, advocacy on combating climate change and international trade institutions, Ngozi wants to draw attention to the importance of fairer international trade as a means to facilitate other types of international cooperation. She has a strong case as for instance national agricultural subsidies are often a major barrier in establishing international trade agreements, while also disincentivizing attempts at introducing global carbon taxes. Global health inequality often comes down to unequal distribution and access to traded goods such as vaccines, Covid 19 a case in point. In an article with The Economist she argues that open and fair trade is one of the most underappreciated tools in achieving emission reductions, by improving conditions for the development of green technology through scale-economy and specialisation.

“She might be both the reformist and middleway candidate that the WTO and world trade needs. She is certainly not the lowest common denominator.”

At the backdrop of protectionist trends and tensions on international trade the World Trade Organisation is equally experiencing internal political disalignments, as countries are accusing each other of finding loopholes in the WTO rules, rounding WTO rulings and imposing tariffs, as well as the decreasing legitimacy and stalling of WTO’s negotiation and dispute system (the Appellate body). The US, for example, effectively froze the Appellate body by blocking new judges in 2019. It is in this environment that Ngozi Okonjo-Iweala has been chosen, recognised for her technocratic skills and economic know-how but also criticised for lacking a finesse in navigating politics. She has herself acknowledged that she is not much of a politician.

As such, one could wonder whether she is the right fit for heading the WTO, and indeed the front figure of reglobalisation. Apart from possibly lacking the political skills, her credentials as an “orthodox economist” does not exactly point to a reformist candidate. The US government initially blocked her WTO appointment, arguing that she was not radical enough to be up for the task of reforming WTO. At the same time, she went ahead with painful and unpopular, but well needed, economic reforms in Nigeria and has throughout her career brought a more holistic perspective to international trade. Her stance on economics, along with her extensive working experience in both global south and global north, might mean that she will not ruffle as many feathers and will be better poised to deal with conflicts within the WTO, and therefore creating room for taking steps to reform WTO. She might be both the reformist and middleway candidate that the WTO and world trade needs. She is certainly not the lowest common denominator.

By: Viktor Hellblom

Cover: World Trade Organization

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