Creon Butler
Welcome everyone. My name is Creon Butler and I’m the Director of the Global Economy and Finance Programme at Chatham House, and it’s my great pleasure today to host a discussion with Dr Ngozi Okonjo-Iweala, who is a candidate for the position of Director General of the WTO. This is the first in a series of such discussions Chatham House is hosting with the WTO candidates, and I’m very pleased that this forms part of Chatham House’s centenary celebrations. In its first 100 years, the Institute has been a strong and committed supporter of the rules-based international system and we hope that these discussions, on the future leadership of the WTO, can contribute in a small way to strengthening an absolutely critical part of that system.
Dr Ngozi has been, generally, with an enormously distinguished career in both economic policy and international affairs. She has twice served as Finance Minister of Nigeria and she has also served as Managing Director for Operations at the World Bank. She has a very wide range of current goals and roles, but I would particularly highlight her position as Chair of the Board of Gavi, the Vaccine Alliance, and also, she is the African Union Special Envoy to mobilise international financial support for the fight against COVID-19.
Before we begin, I’d just like to make a few quick housekeeping points. This webinar is on the record and will be recorded and if you wish to tweet, please use the hashtag #CHEvents. After an initial discussion of 20 minutes or so, we will move to a Q&A segment and if you would like to ask your question, please submit it through the ‘Q&A’ function, not the ‘raised hand’ function or the ‘chat’ function, and if time allows, we will also ask some of the participants to pose their questions directly to Dr Ngozi. So, please clearly indicate your affiliation and, also, if you are happy to be asked, to put your question directly. Please also keep your questions as brief and to the point as possible, as we have a very limited time and we’ll have a hard stop at 6 o’clock, 18:00 hours.
Dr Ngozi, thank you so much for sparing the time to be with us today. And perhaps I could start our discussion by asking you about your overarching philosophy on global trade. It’s clear from the statements that you’ve made to the WTO Council in your press conference that you are a strong supporter, but what does this mean in practice and how does it influence your vision for the future of the WTO?
Dr Ngozi Okonjo-Iweala
Well, first of all, Creon, thank you so much and good day to everybody, wherever you are in the world. Congratulations on the centenary of Chatham House. Well, my overarching philosophy on this, to have a truly dynamic trading system, a multilateral trading system, which is responsive to the challenges of the 21st Century, you know, a trading – multilateral trading system that is proactive, looks ahead. You know, devices rules that take care of current and future issues, instead of being reactive, it shouldn’t follow, it should lead the way and create conditions, which foster trade for the benefits of all countries.
My philosophy is a trading system, a dynamic trading system that is inclusive, because you know that traders lifted up the lives of hundreds and – of millions of people, but there are those who have been left behind and not included. We need a new trading system that encompasses the vulnerable and those marginalised women and trade issues that I am very interested in, micro, small and medium enterprise and trade, so, an inclusive trading system. So, let me leave it there.
Creon Butler
Thank you very much. One of your very clear strengths in your CV is your experience operating at the highest political level. But at the same time, when you look at the political environment facing the WTD – WTO today, it’s arguably, the most difficult environment that it’s ever faced. I mean, we have growing tensions between the two largest economies, there are the immediate impact of the COVID-19 pandemic, but also, you have, both in advanced countries and in developing countries, many of the – many people are, kind of, questioning the balance between the benefits of free trade, but also, the costs. So, the key question is, you know, there’s a need for political leadership and how would you go about creating the political consensus necessary to deliver on your vision, as you’ve described with up ‘til now?
Dr Ngozi Okonjo-Iweala
Thank you, Creon. I think this is a, you know, a really important issue, but I always hasten to say that when we look at the political issues of today between the big powers, or between developed and developing countries, we should separate out some political issues that are not really in the arena of trade, but may be confounded with it. So, if you focus on those issues of trade and WTO and what needs to be done, I do think that, you know, my approach would be to focus on areas of agreement. Very often we focus on areas of disagreement and spend so much time on that that we do not notice that there’s some intersecting circles where countries actually do agree. For instance, you know, the – both the United States and China involved in the fisheries negotiations now, which is multilateral negotiations, they’re both in it and, you know, it’s proceeding relatively well. So, it’s not that they’re always falling out or always in disagreement. There are areas where they agree, and my approach to dealing with that would be to find those areas, even when it seems they are disagreeing. I’ve noticed in talking to members, there are some common elements that come in.
So, that’s my approach to life, focus on the positives, build up from – obviously, trust is a huge issue. How do you now have the wings that will enable you to build trust between the two? And I think that both the US and China have benefitted immensely from an open, stable, predictable, fair, multilateral trading system and they are developing countries and least developed who would like to benefit, also, and I think there is a win-win for us in that.
Creon Butler
Yeah, and clearly, I mean, I think the way you describe it in terms of, sort of, selecting a key area where there’s a potential for agreement, pushing forward with that and then developing trusts on that basis and expanding, if you like, the area of negotiations, I mean, it makes a lot of sense. And I guess, to some extent, the current Director General, you know, approached, in terms of the Trade Facilitation Agreement. It was an example of picking out an area where there was an agreement that was achieved. But at the same time, you know, supposedly, one of the great benefits of big multinational negotiations is that you enable trade offs to take place between different areas. And, also, if you don’t have a sufficiently broad range of issues, you know, one group of countries or a country may hold hostage, you know, agreement on one thing, which they actually might agree to, but until they get something in somewhere else. And so, while I can see your strategy and it makes a lot of sense, I mean, how are you going to deal with that, sort of, broader context, which can frustrate that approach?
Dr Ngozi Okonjo-Iweala
Well, you know, lets take one specific area where this is a very big difficulty, in agricultural negotiations, the issue of domestic support, where you have, you know, some developing countries who feel that they don’t really want to discuss anything, until you get rid of the aggregate measurement of support beyond de minimis. And that’s their position, they’re sticking to that, and then, the developed countries who feel that Article 6.2 does give developing countries the ability to, you know, subsidise inputs or resource for farmers and that this also gives them room. And that the de minimis of several countries, they have – the agricultural systems are so large now, that when you calculate that, it’s huge sums of money, and each side is saying, “Unless this happens, I won’t do this.” You know, “We want market access, but unless you do this, you know, we won’t discuss mar – you want market taxes, but unless you do this, we won’t discuss it with you.” So, my approach there, really, is to step back, to step back and say let us all put all issues of domestic support on the table. Let us not have red lines. Let’s not have linkages, you know, that say we wouldn’t do this, and we wouldn’t do that, and step back afresh, because that issue has really been holding up a lot of negotiations. So, I would – on that one, I would stand from Ground Zero, in a way, on domestic support and see how we craft something that is acceptable and balances the rights and obligations of each member, according to their development. So, that’s the way I would approach it.
Creon Butler
Yeah, thank you very much. I mean, you, as a Former Finance Minister of Nigeria and so on, have experience of the G20 and, if you like, the role that the G20 has played, since 2010, in overseeing, if you like, the global economic system. And when one’s looking at that, sort of, challenge of how do you achieve political will, I guess, in many people’s minds, the idea that somehow the G20, whether through leaders or Finance Ministers, Trade Ministers, can play an important role in creating a context in which the WTO can move forwards, I mean, do you think that it is helpful, can be helpful, and if so, how can you make it helpful? Or, you know, as some Trade Ministers have said in the past, “Actually, we don’t want the W – the G20 anywhere near what we’re doing, because they don’t really understand trade discussions and so on, so better for them to keep away.” I mean, what’s your view of the role of the G20, in this respect?
Dr Ngozi Okonjo-Iweala
Well, you know, I don’t blame – I mean, you know, Trade Ministers will always look on Finance Ministers in a certain way and maybe Finance Ministers on trade, but really, there’s that division. For me, as a Development Economist, my entire career is really an artificial one, because, you know, when you’re in development economics, trade is part and parcel of what you learn, do, live with. And I always tell people, you know, “They say you’re in finance,” and I’ll just use this opportunity to say a word on that, before I talk on the G20, “When you’re a Development Economist, you have to deal with trade.” This is one of the tools, a means to an end of improving people’s lives. So, I’ve been doing that all my life, you know, do – working on trade policy issues. Even as Finance Minister, I had Customs reporting to me and, therefore, that was all about trade facilitation. So, that familiarity with those issues, I don’t think we should make this division. I think the two professions, or two sets of Ministers should work together, and I did that with my Trade Minister, and it went very well, when we were negotiating the ECOWAS common external tariffs.
But coming to your issue, you know, so, for that reason, I don’t think it’s out of place for the G20. They actually have a trade group, a Working Group on Trade, and they recently released something about reforms for the WTO. And my thought to that was, well, the WTO had better, you know, step in and start doing its own reforms quickly, before it has it done to it. But that doesn’t mean that the trade group and the G20 cannot provide a context. Why is that important? Because many of the same players who are having issues of trust and so – are also members of the G20 and there could be – that could be a forum to try and leverage to solve some of those issues. So, I’m not necessarily against it. I do think the Trade Ministers should be in charge of, you know, seeing that those reforms are carried out and the members, and not necessarily the G20.
Creon Butler
Thank you very much. Well, I’d like to put one further question before we move to Q&A from the audience and it’s, essentially, around your case for being the Leader of the WTO. I mean, I think in many of the interactions you’ve had with the media, but also with the WTO Council, you’ve emphasised the importance of selecting a candidate, who is the best candidate, on the basis of merit. And I mean, one can see from your CV an enormous amount of experience. I mean, my question really is, what do you think are the most important elements from your career to date? But also, if you are successful, you will be the first person from the African Continent to lead this important organisation. You’ll also be the first woman to lead the organisation, and although, you know, merit is the right criterion, how do you think these two attributes will be able to help you in making a success of leadership of the WTO?
Dr Ngozi Okonjo-Iweala
Thank you, I think that’s a very important question. I think the WTO is at a very difficult juncture right now, where there’s so many challenges and there’s paralysis in the system and therefore, it needs a certain kind of leadership. That’s why I say it should be on merit, and I mean it most sincerely. Of course, in saying that, I think I should be the one that I can do it. But the reason it’s important to me to focus first on who can lead is because it is clear to many people that if the WTO gets wrong – gets it wrong, in terms of leadership this time, it will continue more into irrelevance, and to me, it’s too important an institution to have that label that it’s on the side lines, and I do think that they have to try something different. You need – you know, it’s no longer just – you need the trade qual – skills and qualifications, but you also need the ability to break through some of the things that are paralysing the system. You need the strong political credentials. You need reform credentials. I’m not talking about I know how to do reform. You need people who’ve actually delivered reform and I’ve done that, not only at the World Bank, but in my country. I wrote a book about it, called Reforming the Unreformable, I’ve done it and it’s tough. It’s not easy. It’s not something you talk about. So, that is why the leadership of the WTO matters now.
Now, if you add to that that, look, an African is there, why not? We have talented people on the continent, we have three candidates now. Some people are questioning why. I have respect for my competitors, you know, I think my continent, bringing three people forward, it’s not so bad. You know, it means we have riches of people who are capable. If you’re a woman, so much the better. But, for me, I don’t think we want to turn the criteria up, you know, the other way. Have merit first and if that person happens to be a woman, great. If they happens to be an African, great, and for me, I fit the bill on all fronts.
I think if the WTO continues doing what it’s been doing, talking only about technical expertise, I respect technically, you need it and I have what it – is needed. But you need something beyond that. You need long experience managing in multilaterals, you need the political clout, you need the ability to reach where decisions are made. But most of all, you need boldness, courage, reforms need to be done.
Creon Butler
Thank you very much. I’m go – now going to ask some of the many questioners who’ve put questions in the question box to ask their questions, and let’s hope that this works properly, but I’d like to go to Peter Ungphakorn, initially, who has a question about the Appellate Body. So, I hope we can unmute him and allow him to ask his question. Let’s see if that works. Peter, are you able to speak?
Peter Ungphakorn
Okay.
Creon Butler
Peter? Yes, please.
Peter Ungphakorn
You’ve got me.
Creon Butler
Please go ahead. Yes, I’ve got you.
Peter Ungphakorn
Dr Ngozi, the Appellate Body crisis is one of the most serious problems facing the WTO. Do you think Ambassador David Walker’s proposals are a realistic solution and how would you persuade the US to move from simply criticising the appeals process, to making proposals and actually joining in the search for a solution. I’m a former WTO Secretariat staff.
Dr Ngozi Okonjo-Iweala
Yes, that’s a very – that’s the key question and I totally share what I say about the Appellate Body and the whole dispute settlement system is that, look, it’s the – one – the most critical, or one of the most critical things, because you cannot have a rules-based system where there is no forum to resolve disputes and issues. That makes the system, over time, lose credibility. So, the need to deal with this issue of the dispute settlement system and the Appellant Body is critical. Now, I think the Walker process has merit. If you look at some of the things that Ambassador Walker has proposed, or is proposing, they respond to a lot of the issues raised by the Americans, which have legitimacy. I think if you look at some of them, I hasten to say that some of them have a foot in and I think we need to listen and understand the frustrations from the American side.
Now, the issue of the Appellant Body not going beyond the covered agreements that members have entered into beyond its mandate is one that should be looked at, and in the Walker process, I think there is a look at that. The issue of the num – amount of time it takes, the 90 days, and the – going beyond that in order to come to a resolution of issues or disputes, that’s also a legitimate issue. I mean, issues are now complex that come before the Appellant Body and it may take some time, but I think there is room to discuss how do we adjust for that?
So, I think the Walker process has good elements. I think we – they – that there’s room to marry what there – is being done there, with what the Americans are saying. Actually, if you talk to the Americans, we say, “Look, the system, as was put together, is not broke. We don’t need a new system, let’s just implement what we have now. That the problem is it’s not being implemented.” So, since much of that philosophy, also fixed with what Ambassador Walker’s process is trying to put together, I think we can come to a meeting on – of minds on how this dispute settlement system should be amended.
And mark you, one of the things I’d like to see in rejigging it or reforming it, or, you know, strengthening it to do what it’s supposed to do, is also to take account of the structural issues that prevent many developing countries, and the least developed countries in particular, for having access. If you look at the settlement of disputes, you see many of these countries, yes, they’re a small part of the multilateral trading system, but they hardly ever use this dispute settlement system, because they are barriers, they don’t have the capacity, the wherewithal, to do it. So, we need to also fix that.
Creon Butler
Thank you very much. I’d like to go now for a – to a question by Katherine McKenzie. Can we unmute Katherine McKenzie, please?
Katherine McKenzie
Hello.
Creon Butler
Hello, yeah, we can hear you. Please go ahead.
Katherine McKenzie
Hello, yes, I wanted to ask about the role of labour, labour standards and labour organisations, how do you see that, particularly because you were talking about those left behind by the global trading system, and also about, you know, the costs and benefits and achieving a recognised balance between costs and benefits? So, I wondered how you see labour being involved in trade discussions going forward?
Dr Ngozi Okonjo-Iweala
I think that the issue of labour standards is very important and that we need integrating that, because that could also be one of the measures that perhaps can lead to distortion, to anti – can damage competition between countries and between companies and lead to trade distorting, if you will, things that – trade distorting environment. So, you would – I think working with the ILO would be very important, WTO trying to work with the ILO to make sure that labour standards are respected, and that the trading system is not an end in itself, but it’s meant to work for people. So, it should work for labour, it should work for those marginalised and that’s the way I see it.
So, that notwithstanding, I think we really need to look at labour situations in our countries, which are different. As long as there is no attempt to be anti-competitive in the way that labour is utilised or labour is – does its role, then I think it’s – that’s okay, you know. But we need to avoid everything that damages competition and damages the multilateral trading system, so I totally agree on standards.
Creon Butler
Perhaps I could use that as an opportunity to ask a broader question, which is, very often, to get the best outcome from a trade negotiation, countries not only need to participate in that negotiation and perhaps to their own key interests, but they also need to undertake domestic policies and domestic actions, which complement, if you like, the freer trade that may follow from the negotiation. And certainly, when you look at some of the critiques of trade liberalisation in the past, quite often, you can attribute it for some countries to the fact they just haven’t done domestic actions that were – would’ve actually enabled them to benefit. So, in a way, you – the WTO doesn’t control those domestic actions and yet, they’re so important. From your experience as a Finance Minister, I mean, how do you think the WTO can influence the overall package, if you like, not just the trade negotiation, but the domestic action, as well?
Dr Ngozi Okonjo-Iweala
I think that’s a very important question and issue, Creon, because if you look at the African Continent, for example, we have a very small share of world trade, which has actually fallen from 5% to 3% and stagnating around there and intra-African trade itself is 15%, you know. So, all around, we are not benefitting as much, or the continent is not benefitting as much from the multilateral trading system, or even intra-Africa trade and so, this new African Continental Free Trade Agreement is the beginning. But to benefit, you need to have goods to sell and taking my continent as an example, we have to add value to products, in order to have what to export and to sell to each other. So, we need to start interrogating ourselves about how do we add value? And these are behind the borders, you said, domestic issues. How do we process the primary commodities that we keep exporting and we’ve been doing over time? And what does the – you know, what does it – what is the world trading system saying about that? Are we facing, for instance, escalation, tariff escalation, you know, where you add value, you meet increasingly higher tariffs? How do we deal with that? The WTO can contribute to tariff preferences, which exist in any case, for least developed countries, that can enable countries to add value and to trade more. So, I certainly agree with that.
And that adding value behind the borders needs investment, you know, policies that are friendly to investment, both domestic investment, as well as external. And once you do that, then you look at the trading system and say if you are least – at least developed country, do you have preferences, like a Goa, everything but arms of the EU, and so on? There are some systems that we can benefit from. So, I think – and those are compatible with the WTO. So, I think, in that way, we can find systems where the WTO can buttress what countries are trying to do, so they can take better advantage.
Creon Butler
Thank you very much. We have a number of questions, from an African perspective, and I’d like to bring in one of those now and maybe some others, as well, and I would like to ask if we could unmute for Vivian Ekwesu, and I apologise if I’ve not pronounced your name correctly. Perhaps we could do that now, Vivian. Vivian, can you speak? If not, maybe what I’ll do is read the question.
Vivian Ekwesu
It’s Viv…
Creon Butler
The quest – jolly good, no, please go ahead.
Vivian Ekwesu
Sorry, I was saying it’s Vivienne Ekwesu from Nigeria.
Creon Butler
Yeah, please go ahead.
Vivian Ekwesu
I was going to ask Dr Okonjo-Iweala, as you just mentioned, the African Continental Free Trade Area was finally signed in March 2018 by our Heads of State, with Nigeria finally coming onboard in July 2019. So, as the prospective Director-General of the WHO, what quick wins…
Dr Ngozi Okonjo-Iweala
WTO.
Vivian Ekwesu
…would you put place to strengthen our regional economic communities in Africa, especially in the wake of the COVID-19 pandemic, where there is a clamour to look inwards?
Dr Ngozi Okonjo-Iweala
Okay, well, thank you so much, Miss Ekwesu, and nice to hear from you. I think there are a couple of parts to that question. First of all, as Director-General, I think the way that the AFCTFA has been negotiated is quite compatible with WTO rules. And so, what I would be doing is looking for what instruments are – that at the disposal at the WTO could we use to help buttress, you know, what we are trying – what this continent is trying to achieve. Do you have aid for trade, for instance, which could be used and not only to do analysis for countries, to find out what do they really need to do, in order to benefit more from both trading system within the continent, as well as outside? And then acting upon that, you know, resources to help strengthen and build capacity for trade. The WTO has many programmes that it’s had over time that I think we can take advantage of even more.
I would also look to the other multilateral development institutions, because some of what we have to take care of needs resources and the WTO, even though it has Aid for Trade, is not really a funding institution. So, how do you collaborate with the World Bank, with the African Development Bank, to try to deal with some of the behind the border issues we need to solve? Let’s take the digital divide, for instance, the idea that we have, you know, electronic commerce coming up. One of the areas the WTO, some negotiations are going on and WTO has to come up with new rules, how do we benefit if we don’t have the connectivity? Those are the things we would be looking at, you know, to see how can WTO help work with other institutions to solve some of those problems? So, that is, I think, essentially, some of the things that we’d be looking at. And I just want to repeat that we can have a free trade agreement or a free trade area, but if we do not solve some of the problems that stop us from participating in trade, i.e. adding value to our products, that’s an issue.
On the issue of COVID, and that was the second thing you mentioned, this is an area in which, actually, I’m right in the middle, because I’m also WHO in – and the Envoy to the Tools Accelerator, which is a programme to accelerate the vaccines, production of vaccines, therapeutics and diagnostics and allocate in a way that developing countries can benefit. In the short-term, we want the multilateral trading system to make – allow this to happen, to make sure there are no restrictions that prevent acc – countries on the continent from accessing supplies. You know, this has been the case, there have been restrictions for our countries that have not been able to get access, so lifting that.
In the longer-term, I think all over the world we’re inevitably going to see a shift in attitude, perhaps, from just in time to just in case or just at home, and Africa is going to be some part of that, but I don’t think it’s going to be overwhelming. So, we will be able to do some of our own products, since we import 94% of our pharmaceuticals. But that does not remove from the need to have free liberalised trade in these areas, so that those who cannot manufacture or who cannot do so at scale, can have access to a multilateral trading system that allows them to get their medical supplies, their vaccines, the equipment that they need in a fair and equitable manner.
Creon Butler
Perhaps I could follow on that question, which is, I mean, many of the things you’ve covered are what people are talking about, in terms of the ‘new normal’ that will follow the COVID-19 pandemic, and I think you’ve given some good examples, in relation to Africa. But in terms of the broader range of issues that were – and in terms of the way the global economy is going to evolve, do you think it’s helpful for the WTO, in a way, to have a new normal package of some kind and, you know, group all these things together and say, “Look, obviously we have a role in terms of the immediate response to the COVID pandemic crisis, but also, this is a package of things that we could do”? And would that be a way of, perhaps, building political momentum, or do you think, in a way, people will say, “Well, hang about, hang on a second, what about the things that really matter now?”
Dr Ngozi Okonjo-Iweala
Well, I think it’s both. I think, you know, I’m totally convinced that the issue of COVID and trade will be very topical, let’s say at the next ministerial, which is the middle of next year. And the WTO should prepare, members should prepare to have the conversations that move the issue along, because new rules need to be agreed on how to deal with this and, then, not just for now, but for the next pandemic, so that will be very topical. But in addition to that, when I say that the rules of the WTO need updating to the 21st Century, I’m thinking precisely of those bundles of new economic areas, if you want to call them that, you know, the circular economy, the green economy, and the digital economy. Yes, those should be bundled, and in a way, you know, I’d like to – I wish we could do the multilateral negotiations on this. Some are moving along under plurilateral negotiations, joint statement initiatives. Of course, multilateral is the best, because it saves transactions costs, you know, it allows everybody in. But we are moving some of these issues and I think those bundle of issues should be looked at. Actually, if we don’t do that, the WTO will continue to lag further and further behind. If you look at some of the regional agreements, free trade areas, that have been negotiated and regional agreements negotiations have resulted in some good agreements that do, they touch on some of these cutting edge issues, and I think the WTO also ought to be going in that direction.
Now, let me also say that there’s some what I call 20th Century issues left over from the Doha Development Agenda and you know, there is a lot of sore feelings about those issues. There are some members who feel we are past that. We should move only to the new issues. But there are also many members who feel like, look, there were specific mandates to negotiate some of these on the agricultural side, the public stockholding, the special safeguard mechanism, the cotton, you know. And there’s merit in also looking at those and seeing how the WTO can deal with these issues, as – even as it looks at the 21st Century.
Creon Butler
So, you’re going to need a much bigger WTO Secretariat, I think, to cope with all of this. Well…
Dr Ngozi Okonjo-Iweala
By the way, I think the WTO should be looking, also, at issues of women and trade, micro, medium and small enterprises, these are all the 21st Century issues, too. Maybe they are 20th, but they’re certainly 21st.
Creon Butler
Indeed. I’d like to bring in another question, please. If we could unmute Pierre Sauvé and I think he has a question on the issue of fiscal support and its link to new sustainable forms of production. So, Pierre, could you ask your question, please?
Pierre Sauvé
Can you…
Creon Butler
Pierre, go ahead.
Pierre Sauvé
…hear me?
Creon Butler
Yes, we can, please go ahead.
Pierre Sauvé
My question to Dr Ngozi concerns the unprecedent, sort of, fiscal response to the COVID situation, which – for us to accelerate the pace of recovery. And for many people, this opens up genuine opportunities to actually engage in the kinds of reforms that you just mentioned, particularly regarding to the green economy, to promote more sustainable patterns of production and trade and consumption. And, of course, there’s a role for trade in this, but where do you see the WTO and trade rulemaking and trade negotiations, fitting in to a greening of the world economy?
Dr Ngozi Okonjo-Iweala
Well, thank you very much, and again, in two parts. I think that the WTO and the multilateral trading system should be looking at issues of sustainability, of which environmental issues and greening issues are very much a part of that, and looking at what rules would be supportive, at least not impeding. For instance, I want to take the fisheries negotiations. This is one that is not only – that will lead to more sustainable fisheries, that will lead to a better attention to biodiversity in our seas. So, it’s that kind of a thing, negotiating a way of ample subsidies and, you know, looking to see that those only subsidies that do no harm are in place. So, the same with the green, or climate change, you have to look at the issue of, you know, do we have, within our trading system, or sec – areas where there are actually subsidies that are harmful to the environment, that do not contribute to sustainability, and then, how do you deal with those harmful subsidies? So, that is one approach.
But coming back to your issue of the fiscal stimulus, you know, I said in my speech, “The fiscal stimulus is needed. There have been massive amounts of it, trillions of dollars in the developed economies, and that’s a profit.” In order to speed up the recovery, to provide safety nets for those who need it, of course, the developing countries and the poor countries have not been able to issue that kind of stimulus. So, the question is, how is this stimulus being used? And I believe strongly what you said that it can be used in a way that will lead to a more – to more sustainable patterns of production, of living, that you – so that these resources are used to, as they say, ‘build back better’. You don’t want to use them to go back to the old way of doing things. So, I totally believe in the fact that we should focus all the resources we are do – right, that are being put in the system now, to more sustainable approaches to production, greening production, backing away in our industrial system from damaging use of, you know, of, in some cases, fossil fuels, coals and so – coal, things that damage the environment. So, how do we build back better using this? I think that’s a very good and topical issue and that the trading system can work in a way, WTO rules can work in a way that sustains that without impeding the national treatment principle or the MFN principle. I think we can do that.
The other – the last thing, sorry, the last thing I want to say about that is that the – this massive amounts of money should not restore – re – should not end up indirectly into subsidies or other forms of use that also distort – damage competition or distort the trading system. So, how we implement this fiscal stimulus is, indeed, very important.
Creon Butler
Thank you very much. We have six minutes or so, so I’ll try and fit in as many questions as we can, as I know you have to leave at 6 o’clock. Perhaps I could ask if we could open up, unmute Alan Beattie from the Financial Times, who has a question, please? Alan, go ahead.
Alan Beattie
Alan Beattie here. It was Pascal Lamy, I think, who described the WTO’s consensus form of decision-making as ‘medieval’. And apart from plurilaterals, which don’t seem to have produced a huge amount, I haven’t seen many suggestions about how the decision-making process for negotiations could be updated. Do you think we can still stick with a consensus model, or do you think there’s something more, sort of, more modern and swifter and more effective that we can move to?
Dr Ngozi Okonjo-Iweala
Thank you, Alan. I mean, that is one of the critical questions that comes up and, of course, the consensus model is more difficult, in a way. To do it would be quite easy to have a system, in which a small group, or some Executive Board or something, made decisions. But I think we have to think back to the reasons for the consensus system and to remind ourselves that this worked in the past and to ask ourselves why is it not working? The reason why I’m not rushing to alternatives, but trying to see how can we make it work in the way it did before? Is because the consensus system means that they – it – they – whatever agreements are arrived at will be implemented by all the members who participated, the 164 members. If you have another system, in which a group takes decisions, not everybody shares in it, then you run the risk of members not implementing that and that would cause even more problems than you can imagine.
So, I come back to the point, what is it that has happened that has made this consensus system? People are describing it, maybe Pascal, as medieval, now, because it’s been tied up in knots, it’s not working. So, what – why is that? And I think there’s a fundamental reason, because there is a breakdown in trust between members. If you don’t trust each other, then it’s very hard to build consensus and that is a fundamental missing, whether it’s between the large members, large economies, whether it’s between the least developed and developing countries and the more developed countries, there is a lack of trust. And I think that for the WTO and the consensus system to function, we need to get at, fundamentally, what is wrong. It’s not going to be easy. Building back trust is not something you talk about. You have to do it. You have to find those actions that will knit people together and I do believe they exist. I’m a bit of an optimist about this and I think we should try and repair the consensus system and make it work the way it used to.
Creon Butler
Thank you very much. Well, unfortunately, we’ve got time for only one final question and I’d like to ask Pauline Otti if you’d like to put your question, please? Pauline, can you speak?
Pauline Otti
Can you hear me?
Creon Butler
Yes, please go ahead.
Pauline Otti
Okay, where is the question I saw on the screen? Can I have the question back on…
Creon Butler
Yeah, you can,
Pauline Otti
…the screen, please?
Creon Butler
Well, yes, or I can read it for you, if you like.
Pauline Otti
Right, well – or if you can read it for me, that would be wonderful.
Creon Butler
Yeah, okay.
Pauline Otti
Anyway, hi…
Creon Butler
If you could…
Pauline Otti
…Ngozi, good luck.
Creon Butler
Okay.
Dr Ngozi Okonjo-Iweala
Thank you.
Creon Butler
Thank you. So, Pauline’s question, “If you are elected, are you likely to promote the issue of debt service reduction and fair-trading system, to facilitate SDG7 in the African region?” So, I think it’s about the question about debt service reaction, but it’s also how you see the role of WTO Director-General more broadly, is it just about trade, or do you see it – do you see the role as being about the broader multilateral economic system?
Dr Ngozi Okonjo-Iweala
Thank you. You know the role of the WTO DG is not one of direct, it’s through influence. But I – it’s what I call soft power and sometimes soft power can work very powerfully. So, I – but, you know, it – I intend, if I’m elected, to use it very proactively and what you are getting at, for me, in your question, Pauline, is what is the purpose – for me, it goes towards the purpose of the WTO. And in my speech, I said I wanted “WTO with purpose” and that purpose is to improve the lives of people, improve living standards, deliver on the SDGs. So, yes, very much so, I see that trade is not a mean – it’s not an end in itself, it’s a means to an end, so it should enable us to contribute. And, in fact, if you look at the fisheries negotiations and what is happening, there is also contributing to part of the SDGs and dealing with biodiversity. So, I would be that kind of DG that is proactive, that tries to work with other institutions to deliver on some of the developmental issues. So, yes, Creon, I would not just – I would try to see the intersection of trade and the WTO with what other institutions can deliver on investment facilitation, for instance. That is one clear area where there can be an intersection on digital. I think working with other institutions would also be important.
Creon Butler
Well, thank you very much for that and unfortunately, I’m afraid we’ve run out of time. But I would like to thank all our questioners. I didn’t do a terribly good job, there are many questions still to be answered, but I’m sure that there will be other opportunities. And Dr Ngozi, thank you so much for spending the time with us today and for giving your very frank and clear answers, and I’m sure all of us would like to wish you well in the future process. So, thank you very much for being with Chatham House today.
Dr Ngozi Okonjo-Iweala
Well, thank you very much, Creon. Thanks to Chatham House and a shoutout to everybody who is listening, thank you for coming, I appreciate it. Bye, bye.
Creon Butler
Bye, bye. Thank you very much.
