August 31, 2020//-With three African candidates running for the post of director-general of the WTO and the continent’s exports held back by an unequal system of trade, Africa faces some tough decisions.
JP Singh outlines the issues
The year 2020 is a remarkable moment for African commercial diplomacy. Three of the eight candidates nominated to be the next director-general of the World Trade Organisation are from Africa: former Egyptian ambassador and later senior WTO staff member Hamid Mamdouh, former Kenyan trade minister Amina Mohamed and former Nigerian finance minister Ngozi Okonjo-Iweala. The leading candidates are the two women.
These candidacies are symbolic and substantive. They underscore Africa’s growing importance in global economic governance, and provide an opportunity to debate the continent’s future in international trade.
The position opened when the current director-general Roberto Azevêdo decided to step down a year early, ostensibly to provide the next DG with an opportunity to shape the WTO’s next ministerial conference in Kazakhstan in 2021.
The ongoing US-China trade conflict has stalled the WTO’s major functions: the Doha Round of multilateral trade talks launched in November 2001 fell apart over Chinese and US agriculture subsidies, and the highest dispute settlement body of the organisation effectively closed in December 2019 after the US refused to allow the appointment of new judges.
An African director-general may be perfectly positioned to mediate the conflict between the US and China, and produce some needed reforms that are important for Africa’s future in the global economy.
Three talented candidates
First some context: highly qualified Africans have regularly headed UN bodies and its affiliate agencies. Five of the 31 executive heads of the United Nations system at present are from Africa including the WHO and UNCTAD.
Two secretaries general of the UN in the past were from Egypt and Nigeria. Okonjo-Iweala has been quick to point out in interviews that she is one among many highly qualified African women.
However, the elite triumvirate of UN-affiliated economic agencies – the IMF, World Bank, and the WTO – has been beyond Africa and the developing world’s reach. Ngozi Okonjo-Iweala, a distinguished development economist, was managing director of the World Bank and in 2012 she ran for its presidency. She lost because the Bank’s executive board was unwilling to upset the tacit agreement by which the president has always been a US citizen..
In seeking WTO leadership, African diplomats have come a long way since the 2003 WTO ministerial conference in Cancún when the trade ministers of the so-called Cotton-4 countries – Benin, Burkina Faso, Chad, and Mali – gave an emotional press conference asking the US to cut its cotton subsidies, estimated to be in the range of $4bn and affecting 10m farmers adversely in West Africa. Underlying this advocacy was smart diplomacy calibrated with technical details and data.
Fast forward to the 2015 WTO ministerial conference in Nairobi where its chair, Kenya’s Amina Mohamed, brokered a deal on cutting export subsidies in agriculture, including cotton.
Africa went from importuning in 2003 to being in the driver’s seat in 2015. Amina Mohamed chaired the 11th ministerial conference and she was the first female to head the WTO’s important General Council.
Hamid Mamdouh helped craft the General Agreement on Trade in Services during the Uruguay Round of trade (1986-94) and headed the services and investment division at the WTO from 2001-17.
The developing world, which stood opposed to high-tech services trade in the 1980s, graduated to provide leadership on these issues through officials such as Mamdouh.
Looking at the candidate records, three things stand out. First, they represent the best of commercial diplomacy anywhere. Second, their record speaks to upholding markets and a rules-based multilateral trading system.
Third, they can broker compromises and consensus. The latter feature will be especially important for mediating the trade conflict between the US and China that threatens to bring down the multilateral trade system altogether.
Reforming Africa
Africa also has some painful choices to make both in terms of its own unity and, in the long run, for its future in international trade. Should an African DG be selected, they would be symbolic of African unity and, subsequently, well-positioned to cajole Africa on internal issues.
The three candidates have until September 7 to persuade other member states to support them, after which the WTO will take another two months to select a consensus candidate through several rounds of elimination.
In 2013, Kenya’s Amina Mohamed lost in the first round when she could not garner Africa-wide support. This year Hamid Mamdouh claimed African Union support but so did Ngozi Okonjo-Iweala after she was nominated. To move forward, it is important that Africa present a consensus candidate soon.
Africa also has to undertake another internal reckoning toward a reform agenda in the long-run. The old system of trade, which can be traced to the colonial era, provided preferential access for a limited amount of exports from the developing world. This system produced inefficiencies and clientalism.
It also allowed the developed world to manipulate the developing world with its patronage and paternalism. For example, instead of providing access for cotton, the United States gave foreign aid of $110m to the C4 states.
To grow, Africa needs to graduate toward non-preferential trade access, and compete on the strength of its exports. African exports have remained depressed and stuck in preferential access.
There is a new Africa of entrepreneurship and talent that provides a different vision. In the first decade of the 21st century, FDI flows to Africa grew almost five times.
While FDI has not increased substantially since the global financial crisis, there are many African economies that continue to outpace others and attract investment.
Botswana, Mauritius, and South Africa are high middle-income economies in the World Bank’s definition. African economies such as Ghana, Kenya, Nigeria, and Egypt have graduated from low to low middle-income status.
Even through the pandemic Ethiopia and Ghana are expected to register positive GDP growth rates for 2020. There are IT growth centres that run from Accra to Addis Ababa, and up and down the continent.
The new director-general at the WTO will not speak for Africa alone, but having an African at the helm will be symbolically important for the continent: offering smart economic diplomacy, and demonstrating the advantage in its products from cotton to the creative industries.
JP Singh is professor of international commerce and policy at the Schar School of Policy and Government at George Mason University and Richard von Weizsäcker fellow with the Robert Bosch Academy in Berlin.
https://africanbusinessmagazine.com/opinion/time-to-unite-behind-an-african-candidate-to-lead-wto/
