An impactful global election is on its way amid mounting tensions between the United States and China, with the seat for Director-General of The World Trade Organization (WTO) up for reelection. The last day for its current head—Director-General Roberto Azevedo—was August 31, marking an early end to his term. Geopolitical shifts created by two competing superpowers have caught other countries in the crossfire of their trade war due to an increasingly globalized multilateral trading system. For most members of the system, it seems that at times they are drowning in the status quo until tensions decline. New leadership in the WTO could provide a revitalization of the organization as it attempts to navigate the growing trade challenges facing member states.
The WTO is not dependent on the global order. Rather, it is the centerpiece of global trade where rules and regulations are espoused. Yet, for many member states, there is a building sentiment that the WTO’s 20th century contract cannot keep up with the 21st century trade challenges facing these states as geopolitics shift—especially now that COVID-19 has exposed the shortcomings of multilateral rules against headwinds of nationalism, and as the rapid pace of technological development adds new complexities. The framework of the WTO is still as necessary as ever, playing a central role in bringing member states together to discuss disputes, negotiate, and collaborate. Moreover, the concerns that originally set in motion the creation of the WTO in the 1990s—including an increasing need to regulate and find a referee for a rapidly globalizing international arena—are perhaps even more urgent today.
Many analysts say the rivalry between the United States and China represents a new Cold War. However, during the Cold War, it remained relatively easy to make distinction between politics and trade due to the somewhat limited nature of globalization. The world we live in today is quite different, and it has even changed significantly since 1995, when the rulebook was written for the WTO. Today we are dealing with conflicting national interests and sentiments of nationalism that have infiltrated the multilateral trade system and threaten to lead to a lose-lose scenario for all.
The outgoing WTO Director-General Azevedo emphasized on July 23 that the WTO is facing tremendous pressure to navigate today’s globalized economy and called for new rules, reforms, and multilateralism in addressing these challenges. He added, “To assure the future of the WTO, it is fundamental that members truly believe in the need to update the system. Some may still believe that the pressures afflicting the WTO are localized, and therefore temporary. I want to assure you that they are not.”
Azevedo’s alarming commentary suggests that the incoming Director-General must be equipped to provide substantive reforms to the WTO at a technical level, being especially mindful of the unique challenges facing developing countries trapped between two trade giants. Vision without functionality is a losing game. The top WTO position is distinct from the International Monetary Fund or the World Bank insofar as WTO direction is based on member consensus and requires a chief who can lead from behind when navigating members’ conflicting interests. By design, all 164 members must unanimously agree to any changes to the WTO contract. These difficult contractual amendments are what Azevedo mentioned as necessary.
Eight candidates have been nominated for the Chief post, hailing from South America, Europe, Africa, and Asia. The selection process will start in consultations, taking place between September 7 and 16, followed by two additional rounds of selection, during which the field of candidates will be reduced from eight to five and then to two for the final round. All highly qualified, each candidate has a chiefly political background with the exception of one; a statesman whose career has been dedicated to the multilateral trade system.
This candidate is Abdelhamid Mamdouh, nominated by Egypt, who grew up in the global trading system and spent the majority of his years in Geneva devoted to multilateralism. Mamdouh’s background is as an international trade lawyer with 30 years experience that includes the participation in the drafting of the WTO Agreement, service as the lead Secretariat in the drafting of the General Agreement on Trade in Services (GATS), and participation in the transition from The General Agreement on Tariffs and Trade (GATT) to the WTO. Over the years, Mamdouh has been guiding multilateral negotiations and advising dispute proceedings. He has been a trusted advisor to many WTO Member Governments on organization-related matters.
In a time when nationalism and protectionism are global trends, navigating country-to-country engagements is becoming an increasingly sensitive undertaking. As such, it is more important than ever to have a mediator who is not necessarily affiliated with the political sphere, where tensions, paranoia, and bias run high. Mamdouh’s career marks him as a technically minded candidate who understands the ins and outs of the system, and who has authored and negotiated contracts since the organization’s inception. And though not politically affiliated, all candidates for the Director-General are nevertheless linked to their countries, and it is worth taking note of Egypt’s ability to navigate trade relationships with both United States and China without jeopardizing either institutional bilateral relationship. Egypt also distinguishes itself by straddling Africa and the Middle East, with deep connections to both spheres.
Mr. Mamdouh shared his own views of the issues facing the WTO with the authors: “The WTO is currently facing unprecedented challenges and its vital functions—including negotiation, dispute settlement, and monitoring—are suffering from diminishing effectiveness and relevance. This harms all WTO members, but has an especially negative impact on smaller, developing economies that depend on the security of global trade rules.” The WTO should identify a career expert for their technical know-how and because of the value of an internal trusted advisor to help shape consensus among members.
Mamdouh is self-made in the multilateral trade system. He started out as a struggling young negotiator assigned to represent Egypt, a developing country, facing the challenge of speaking, negotiating, and meeting eye-to-eye with representatives from developed countries. Mamdouh is now viewed as a trusted advisor because of his transformation of the WTO in the Uruguay Round and his sound advice to negotiators in pursuit of the common purpose of members and legal solutions. Mamdouh’s ability to navigate the ranks in the multilateralism trade space—in both the WTO and in trade law—demonstrates his ability to serve as a lifeline to WTO members who are increasingly feeling drowned in the system.
Generally speaking, member states stand to benefit from strong commercial ties with both the United States and China. However, the collective body should work to disentangle the trade issue from greater national tensions so that both superpowers can benefit along with smaller trading nations. Having navigated these issues for years, Mamdouh has a high chance of building consensus due to his apolitical career and ability to see both United States and China in a level manner, also reflected in Egypt’s successful trade relationships with both countries. Egypt’s Suez Canal has served as a key entry point for Chinese goods to the region, and China as Egypt’s top import partner. All the while, Egypt has simultaneously maintained strong trade and military ties with the United States.
In a time when economic tensions are high, it is crucial to have a representative who has the ability and resources to balance these great powers through contractual amendments that will send positive rippling effects across the organization. Moreover, the country’s ability to navigate two global economies with markedly different structures—the open economy of the United States and the mainly state-controlled economy of China, suggest that the same balance can exist on a broader scale in the multilateral trading system.
Against the headwinds of geopolitics and the currents of nationalism, the WTO faces a great—but not insurmountable—challenge. Recognizing the clear administrative and technical changes the WTO must undergo, it is increasingly more apparent that Mamdouh, a statesman within the multilateral and intergovernmental systems, is well equipped with both the traits to create consensus and the tools to make repairs to the WTO’s contract.