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Leibowitz: "The Ted Lasso of Trade"- Ngozi Okonjo Iweala’s DC Visit

Written by Lewis Leibowitz

The World Trade Organization keeps on rolling along. Last week, the current director general (DG) of the World Trade Organization, Ngozi Okonjo Iweala, made a trip to the United States to attend the IMF annual meetings and to meet with international trade-oriented officials and business representatives. 

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Her itinerary included addressing the Washington international trade community, an event organized by the Washington International Trade Association (WITA). The DG addressed the current issues facing the global trading community, including WTO institutional issues such as the reform of dispute settlement procedures, and the impact of trade on addressing climate change. 

It is widely said that Madame Okonjo Iweala, a former World Bank official and then finance minister of her native Nigeria before being named (with strong US support) as DG in 2021, is an unabashed, and effective, cheerleader for the positive impact of international trade on the world’s people. 

The DG pointed out that global trade has resulted in a dramatic decline in global poverty in the last thirty years. The WTO is, she asserted, an indispensable part of the solution to climate change and reduction of poverty. 

The pandemic and protectionism, she pointed out, were retrograde steps in international development. Further, she said, climate change thus far has seen an increase in protectionism, including the US Buy American initiatives (and the Inflation Reduction Act, and the European Union’s carbon border adjustment mechanism. It’s known as CBAM for those in Washington who have an infinite capacity for acronyms. These incompatible steps by the US and Europe have inflamed tensions and threaten to injure all other countries. 

The WTO is working on several major initiatives to address climate change by using international trade to spur development. For example, the WTO has spearheaded work on an agreement to address fishery subsidies, limiting overfishing in international waters. The ability of all 164 WTO members to agree on forward progress shows the possibility of global action. The US recently announced its accession to this agreement on reduction of fishery subsidies. 

The WTO is also working on steel decarbonization measures to spread technology to more countries. Steel production accounts for about 7% of carbon emissions worldwide. More needs to be done to reduce the industry’s carbon footprint globally. This effort is part of a more general effort to address overproduction of steel. 

The WTO is the principal forum for an “environmental goods” trade agreement. Goods that are vital for reduction of greenhouse gases would be traded more liberally under the WTO approach. The WTO has implemented this ideal previously in agricultural trade, specifically allowing government subsidies that further the goal of sound policy and prohibiting those that frustrate these goals.  

The WTO currently suffers through a dispute about disputes. The WTO Appellate Body was disabled by the refusal of the United States to agree on appointment of new members of that body, which at full strength has seven members.  Now, it has zero members.

WTO members are convening this fall in an attempt to resolve the problems with dispute settlement. The US is the principal antagonist, going back to the Trump administration. Its opposition could result in a restructured dispute settlement system. Last year, members (including the United States) agreed that a fully functioning dispute settlement system would be in place by early 2024. No real signs of progress as yet, but often these deals take shape at the last minute. 

During her visit, the DG suggested that the dispute settlement system would have to change substantially. One proposal that has been mentioned (but not endorsed or opposed by the DG) is to remake the Appellate Body into a second-level dispute settlement panel arrangement, obviating the need for a seven-member body. The lack of a fully functioning dispute settlement system is a drag on the WTO’s credibility.

“I believe that as long as we don’t deliver a reform of the dispute settlement system, we’ll continue to hear about a hobbled and non-functional WTO, even while so many aspects of the organization are working well,” she said.

Many countries, both democracies and autocracies, have become infatuated with increasing barriers to trade. It is natural for countries, and companies, to desire protection of their own industries by making it more difficult for imports to compete with domestic firms. 

While that is an understandable motivation, in time these impulses will turn the world weaker and poorer. Because the issues are complex, progress will be slow. The DG believes that the WTO is a vital part of solving trade problems under a rules-based system. 

These issues are daunting and controversial, but the director general is fighting back, and she wants to make the system work for the world’s people. She rejects the idea that international trade rules are only for the rich countries.  Promoting trade and development is pro-people—and not just in the developing world, but the developed world too. She recognizes the persistent perception that the WTO, and rules-based trade, hurts ordinary people. She firmly rejects that notion and wants the world to know it. 

At the conclusion of the WITA conference, one of the participants, referring to her energy and optimism about the WTO, described her as “the Ted Lasso of trade.”  I think the description fits her well. 


Lewis Leibowitz 

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Lewis Leibowitz, SMU Contributor

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