Biden should revive WTO dispute settlement mechanism before leaving

The general council of the World Trade Organization (WTO) unanimously agreed on November 29 to reappoint Ngozi Okonjo-Iweala as the director general for a second four-year term. Her present tenure is till August 31, 2025. Thus, the WTO members have made sure of her reappointment before Donald Trump takes over as the 47th President of the United States (US).  Her second term will commence on September 1, 2025 and end by September 30, 2029.

 

The US had and still has a grouse that some of the decisions of the WTO’s dispute settlement body had gone against it because of overreach of the panel members and adjudicators in the appellate body dealing with the disputes. So, when the term of the appellate body members expired in 2019, the Trump administration refused to endorse the appointment of new members to the appellate body making it dysfunctional.  Besides, when the term of Roberto Azevedo as the director general of WTO expired on August 31, 2020, the Trump administration refused to endorse the appointment of Ngozi Okonjo-Iweala as the new director general, although all the other countries approved her appointment. The Biden administration allowed her appointment effective from September 1, 2021 although it has still not allowed the appointment of new members to the appellate body.

 

The WTO followed due process for appointing the director general by calling for nominations on October 8, 2024. Since none except Ngozi Okonjo-Iweala came forward to serve a four-year term, the general council of the WTO agreed by consensus to let her continue as director general. There is little doubt that fear of the Trump administration again not allowing appointment of any one as director general hung over the WTO members and so, they took the opportunity to complete the process before his taking charge as the President of the US. This might enrage Trump and he may very well retaliate by pulling his country out of the WTO. In any case, he does not intend to respect any of the WTO disciplines. He has already threatened to raise import duties arbitrarily on imports from all countries and for imports from Mexico, China, and Canada specifically.

 

The decision to give a second term to Ngozi Okonjo-Iweala reflects broad recognition of her exceptional leadership and strategic vision for the future of the WTO. She has demonstrated not only an extraordinary grasp of the nuances of global trade but also tremendous patience and ability to reconcile divergent negotiating positions of WTO members through persuasion. Her nudge towards agreement on fisheries alone is expected to save subsidies of about $22 billion that can be used elsewhere. She is committed to working towards WTO objectives to help enhance living standards, create jobs, and support sustainable development. 

 

Meanwhile, the appeals against panel rulings are being filed into a void where they cannot be heard for want of stipulated quorum. The Biden administration has shown a rare sense of courage and expediency by clearing the way for the appointment of Ngozi Okonjo-Iweala as the director general before Trump comes in. Now, President Joe Biden should show a little more courage and expediency and allow appointment of members to the WTO appellate body and help revive its dispute settlement mechanism. 

 

Email : tncrajagopalan@gmail.com