Monday, February 15, 2021 / 3:00PM /
Teslim Shitta-Bey, Chief Economist / Managing Editor, Proshare / Header Image
Global trade has been in a slow-motion freefall over the last decade as increased nationalism has clobbered trade in goods and services amongst countries over the last half-decade as the idealism of narrow national interest took root and dipped the world in a river of bilateral trade rhetoric. The reduction of global traded volumes worsened with the beginning of the administration of former United State of America (USA) President, Mr. Donald Trump, who preferred bilateral rather than multilateral trade arrangements, which partly explained his objections to the emergence of Dr. Ngozi Okonjo-Iweala, a known multilateralist, as the possible head of the world trade organization (WTO). Trump's objections stalled the appointment of Okonjo-Iweala in 2020. However, with the recent 2020 US polls showing Mr. Trump the White House door, the narrative appears to have changed.
Uncle Sam and The New Trade Mindset
It is guardedly expected, that with a more multilateral trade-friendly US administration headed by President Joe Biden, the election of Nigerian economist and former President of the World Bank, Dr. Ngozi Okonjo-Iweala, as the new WTO Director-General (DG), the world would hit a trade reset button. The joy of her appointment is more in the resolution of a global leadership logjam than in the tackling of the difficult work at hand. Okongo-Iweala will find herself leading an institution that has been nudged to the sidelines of trade relevance as countries and regions hitherto steamrolled nationalist agendas over global multilateral trade agreements. The new global trade czar would have to soothe frayed nerves and repair fractured friendships within the organisation and set a brave, refreshing, and farsighted course for the body.
Okojo-Iweala will, unfortunately, have to deal with a few darkened global trade spots:
Giving A Thought to Co-Opetition
These problems will cast either a short or long shadow over her tenure as WTO DG and would require her to hit the ground running, starting with low-hanging trade fruits. The new WTO boss will have to begin a massive campaign of convincing the nations of the world why broader trade agreements still make economic sense and suggest that rather than the recent narrow default option of 'neo-competition' nations may do better considering what Dr. Adam Brandenburger (Harvard Business School) and Dr. Barry Nalebuff (Yale University) call 'Co-opetition', a mildly radical view of game theory where competitive outcomes need not be 'zero-sum' games.
Okonjo-Iweala will have to be quick to the draw to convince nations that competition can be conducted in a collaborative environment which would be beneficial to many frontier economies, particularly in Africa, and other more mature economies competing within a cooperative rather than adversarial framework. The new WTO head will have to convince major economies that a tit-for-tat global economic bust-up would leave all economies blind or at least half-blind, depending on the degree of competitive advantage they currently possess. According to the United Nations Center for Trade and Development (UNCTAD), global merchandise trade was projected to have declined by -5.6% in 2020 compared to its 2019 figures. This would be the largest drop in global merchandise trade since 2015 when global merchandise trade fell by -14.8%. The largest fall in contemporary times was the -22% drop in merchandise trade in 2009 towards the end of the global financial crisis (GFC).
The former World Bank President will have to draw on all her diplomatic skills and intellectual ability to make countries see the benefit of open multilateral trade beyond textbook offer curves and production possibility frontiers. Trade theory has its place but at a time of global trauma, the economist's sweet academic trade diagrammes and clever economic numbers give way to the grittier and more pragmatic considerations of the art of the trade deal that guarantees national growth, employment, and stability. Presidents and their teams are not elected for friendliness, they are elected for socio-economic performance.
Hard Choices for A Tough Era
The new WTO boss will receive a deluge of best wishes and Proshare Nigeria will be among the teeming number of wellwishers, but with this said, Proshare is not unmindful of the fact that the world's trade boss will have a grueling time at the helm of the global trade ship. She will need to draw on every ounce of her prodigious brainpower to think beyond the pedestrian and the convenient; platitudes once seen as part of the negotiation template will no longer suffice as countries insist on seeing the forest regardless of the trees. She will have to work with her global contacts to negotiate delicate trade deals and smart compromises that create a framework for a resurgent global economy.
Okonjo-Iweala is an eminently qualified professional drafted to deal with an undeniably tough global trade situation. Her success, or lack of it, will depend on her ability to think clearly, strategise carefully and execute ruthlessly. If the World Bank Presidency tried her knowledge of economics, the WTO leadership will try her capacity to manage complex personalities, difficult nations, and off-the-chart corporate and national egos. To wish Okojo-Iweala well is good, but to pray that she navigates crushingly fierce trade interests successfully would equally be in order. The head of an elephant can be quite a load for even the most muscular of hunters.
Okonjo-Iweala; A Woman and Her Talent
Dr. Ngozi Okonjo Iweala is the 10th Director-General of the World Trade Organization (WTO) and the first African and first woman to emerge to this top position.
Born on June 13th, 1954 Okonjo-Iweala is a Nigerian-American economist, international development expert, former Finance Minister, former Foreign Affairs Minister, and later Minister of Finance and Coordinating Minister for the Nigerian Economy.
She worked with the World Bank for 25 years and rose to the position of Managing Director, Operations(2007 to 2011). Okonjo-Iweala has been a trailblazer and was named Euromoney's global finance minister of the year in 2005.
She is a graduate of the prestigious Harvard University and earned her Ph.D. in regional economics and development from the Massachusetts Institute of Technology (MIT).
The Former Finance Minister is the founder of Nigeria's first indigenous opinion-research organization, NOI-Polls, and is a Distinguished Visiting Fellow at the Center for Global Development and the Brookings Institution.
In 2020, she was appointed by the African Union (AU) as a special envoy to solicit international support to help the continent deal with the economic impact of the COVID-19 Pandemic.
Until her announcement as DG of WTO, She served on the Board of corporations and organizations like Standard Chartered Bank, Twitter, Global Alliance for Vaccine Immunization, and the Africa Risk Capacity (ARC).
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