Making the Trading System Work for the SDGs: 10 questions for the next WTO Director-General

Trade, if well managed, can be a powerful tool for development. But it must not stand in the way of tackling climate change, safeguarding labour rights, protecting the environment, and achieving the 17 Sustainable Development Goals (SDGs) that world leaders agreed upon at the United Nations in 2015. International agencies, such as the World Trade Organization (WTO), should not operate in a bubble and must mobilize the collective action and political will needed to make difficult decisions.

Introduction

The trade community is abuzz in Geneva after delegations from around the world met with the eight individuals running for the WTO’s top post and heard how they envision the future of the institution and the multilateral trading system.

The timing of this discussion comes at an unusual moment in the trade calendar. Normally, the selection of the next WTO chief would have taken place in 2021, but this process was moved forward by a year after Director-General Roberto Azevêdo announced his plans to depart the post prematurely. Meanwhile, the dates for the WTO’s Twelfth Ministerial Conference are not yet known, after plans to hold the organization’s highest-level meeting in June 2020 were scrapped due to the COVID-19 crisis.

Heading into the discussions, one of the most important issues for delegations to consider is how the next WTO Director-General will work to shore up the organization’s sustainability credentials, especially given the long-standing difficulties in fulfilling the development mandate of its multilateral negotiating agenda. The tenuous state of its dispute settlement mechanism and the heightened trade tensions among WTO members these past few years have also placed in sharp relief the institution’s ability to weather crises and ensure that the voices of all actors are well taken into account, especially those that have traditionally received less attention.

Eight candidates are in the running, with nominations submitted by Egypt, Kenya, Mexico, Moldova, Nigeria, Saudi Arabia, South Korea, and the United Kingdom. Over the coming weeks, they will be working to make their case to WTO members, arguing why they are best suited to take the helm of the global trade club for at least the next four years.

Below, we outline the questions that these candidates should be able to answer in the selection process ahead.

1. How would you seek to generate political commitment to multilateralism in major economies and rebuild trust and confidence among WTO Members?

The WTO has found itself caught in the middle of rising trade tensions between major economies, not least the United States and China. The new Director-General must be able to spell out why working together on trade will deliver benefits to countries both big and small—especially in the face of entrenched skepticism or outright hostility from key players—and forge new ways of overcoming political deadlocks.

2. How would you help overcome the Appellate Body crisis and ensure that the WTO has a properly functioning system for the peaceful settlement of disputes?

The dispute settlement system of the WTO is one of its core pillars, serving as one of the few international forums where countries, regardless of size, can file legal claims and obtain binding, enforceable rulings. However, its highest court, known as the Appellate Body, has been paralyzed since December, without a quorum to operate after the United States repeatedly blocked the start of the selection processes for any new appointments or reappointments. The new Director-General will need to figure out how to bring WTO members together to resolve this crisis, while also working with them to develop novel ways to resolve trade-related disputes.

The WTO's dispute settlement system is one of its core pillars, but its highest court has been paralyzed since December. The new Director-General must resolve this crisis.

3. How would you seek to ensure the WTO contributes to the realization of human rights, in particular labour rights and the opportunity for decent work (SDG 8)?

Workers and policy-makers in many countries fear trade can undermine sustainable development if companies fail to respect labour rights in attempts to be more competitive. While many regional trade agreements now include chapters on labour rights, the discussion at the WTO in this area has been lacking—despite a commitment at the 1996 Singapore Ministerial Conference for the WTO and ILO secretariats to “continue their existing collaboration.” The new Director-General will need to respond meaningfully to these concerns and revitalize the WTO’s relationship with UN agencies responsible for business and human rights, and employment.

4. How would you ensure the WTO supports environmental sustainability, including the potential of fossil fuel subsidy reform to support progress tackling climate change (SDG 12, SDG 13)?

Given the ambitions of the UN’s Paris Agreement and the reference to sustainable development in the preamble to the WTO’s rulebook, the new Director-General will need to foster a more open discussion on how the organization can tackle the challenges posed by climate change and other environmental risks such as biodiversity loss. This will involve making sure trade rules do not undermine environmental protection as well as exploring how trade rules can support environmental objectives.

5. How would you seek to ensure the WTO contributes to “building back better” post-COVID?

The new Director-General will take office during a historic economic downturn and a major slump in global trade. Governments have responded with much-needed economic recovery packages, often introduced with little consultation or coordination: many now fear these will inadvertently entrench support for unsustainable firms and sectors and create new market distortions which unfairly harm producers in low-income countries. Positioning the agency as a positive force in the transition to a more sustainable and more equitable trading system will be a key challenge for whoever takes over the role.

6. How would you seek to advance the commitments on trade and sustainable development set out under SDG 17, including those related to the specific challenges faced by Least Developed Countries  (LDCs)?

LDCs make up a minuscule portion of goods and services trade, with their percentage share in the single digits. While WTO members have made commitments to provide duty-free, quota-free access for nearly all LDC goods exports and provide preferential access for LDC services and services suppliers, the implementation of these and other measures has been far from sufficient. The new Director-General will need to foster a renewed commitment from members to fulfil these existing decisions and generate new ideas to ensure that trade benefits developing and LDC members.

7. How would you seek to ensure the WTO respects the SDG 14 commitment on fisheries subsidies?

SDG 14 on life below water has a dedicated target for WTO members to fulfil: to conclude by 2020 their decades-long negotiations on setting binding disciplines on harmful fisheries subsidies, along with eliminating those subsidies that support illegal, unreported, and unregulated fishing.

Before 2020 draws to a close, the new Director-General will need to help members make tough political choices to bring fisheries negotiations across the finish line.

With just months to go before 2020 draws to a close, the new Director-General will need to help members make the tough political choices to bring this negotiation across the finish line—including, for example, on the question of what kind of special and differential treatment for developing countries would be appropriate and effective.

8. How would you ensure the WTO helps to overcome poverty and inequality (SDG 1, SDG 10)?

Although the growth in trade has coincided with a historic reduction in poverty levels, income inequality remains acute, both within and among countries. With commitments in these areas central to progress on Agenda 2030, the new Director-General will need to be able to articulate how policies affecting trade and markets can contribute to more inclusive economies—and galvanize WTO members to take action in support of them.

9. How would you seek to advance gender equity, both within the WTO as an institution and through the impact of the WTO in the global economy (SDG 5)?

While academics, civil society groups, and some international agencies have long worked on understanding the gender-differentiated impacts of trade, at the WTO the topic has only recently grown in profile with the launch of the Buenos Aires Declaration on Trade and Women’s Economic Empowerment in 2017. The new Director-General must guarantee that the momentum around these discussions is not lost, along with ensuring that women are fully represented in senior leadership positions in the secretariat.

10. How would you ensure the WTO contributes to ending hunger and malnutrition, and promotes sustainable agriculture (SDG 2)?

With climate change among challenges facing the global food system, the WTO’s farm trade rulebook has been widely criticized as overdue for an update. The new Director-General could help ensure the trade body contributes positively to efforts to tackle hunger and malnutrition, support farmer livelihoods in developing countries, and promote sustainable agriculture by helping to revitalize talks in this critical area.