US Publicly Supports 'Underdog' Yoo Myung-hee... WTO Director-General Election Enters Final Uncertain Stage (Comprehensive)

USTR Issues Statement on 28th Supporting "True Trade Experts"... Bloomberg Reports "US Causes Confusion with Veto"
Trade Experts Say "US Message Is Not Light"... Conclusion Before US Presidential Election Seems Difficult

Yoo Myung-hee, Chief Trade Negotiator of the Ministry of Trade, Industry and Energy, and Ngozi Okonjo-Iweala from Nigeria, candidates in the World Trade Organization (WTO) Director-General election
[Image source=Yonhap News]

[Asia Economy reporters Jeong Hyunjin and Moon Chaeseok] A last-minute confusion has arisen in the final round of the World Trade Organization (WTO) next Director-General election as the United States officially endorsed Yoo Myung-hee, the head of the Trade Negotiations Division at the Ministry of Trade, Industry and Energy. Although the tide had turned in favor of Nigeria's Ngozi Okonjo-Iweala, who led in the member countries' preference survey, a major variable shaking the situation emerged due to U.S. opposition.

On the 28th (local time), the U.S. Trade Representative (USTR) issued a statement announcing, "We support the election of Korea's Director-General Yoo as the next WTO Director-General." USTR evaluated, "Director-General Yoo is a true expert in the field of trade, having built an outstanding career over 25 years in trade negotiations and policy formulation," adding, "She possesses all the skills necessary to effectively lead the WTO." It further stated, "The WTO and international trade are currently facing very difficult times," and argued, "At a time when the dispute settlement system is out of control and too few member countries fulfill their basic transparency obligations, a real expert with practical experience must lead."

Earlier that day, the WTO convened all member countries in a meeting and recommended Okonjo-Iweala, who advanced to the final round alongside Director-General Yoo, as Director-General, citing that she received more support in the member countries' preference survey. Keith Rockwell, WTO spokesperson, said, "One delegation said at the meeting that they could not support Okonjo-Iweala's candidacy and would continue to support Director-General Yoo. That delegation was the United States." Despite the preference survey results, the U.S. sent a message that "it wants a WTO system led by Director-General Yoo."

Trade Experts: "A Major Variable Shaking the Election"

Trade experts unanimously described it as "a major variable shaking the WTO election." Since the U.S. issued a strong message that it wants a WTO system led by Director-General Yoo right after the WTO effectively urged Yoo to voluntarily withdraw to conclude the Director-General election before the U.S. presidential election on November 3 (local time), it is analyzed that this will cause a significant impact on the election.

From a procedural perspective, experts explain that the existing plan of "unanimous endorsement of the candidate on November 7 (local time) ? recommendation at the WTO General Council on the 9th, with announcement possibly before the U.S. election on the 3rd" was broken by the USTR statement. Bloomberg News evaluated, "The U.S. caused confusion at the WTO through a veto," adding, "Efforts to elect a new Director-General have encountered obstacles." Japan's Nihon Keizai Shimbun suggested, "The election aimed for early November may face difficulties," and Yomiuri Shimbun predicted, "If U.S. opposition continues, the absence of a WTO head may be prolonged." Some foreign media reported that the U.S. decision greatly increased uncertainty regarding the WTO election.

Since the WTO Director-General election is conducted by consensus among all member countries, if influential countries such as the U.S., China, and the European Union (EU) oppose, the discussion process to narrow differences inevitably lengthens. Some foreign media reported that due to U.S. opposition, the confirmation of the Director-General election result has been postponed until after the U.S. presidential election on November 3, and Bloomberg News cited sources saying that if Joe Biden, the Democratic candidate, is elected as the next president, the meeting schedule itself is likely to be postponed until after the inauguration on January 20 next year.

"Low Possibility of Voting or Re-election... A Third Option of Dividing the Term May Emerge"

Procedures to consider going forward include ▲ re-election ▲ voting ▲ dividing the term. However, experts agree that the possibility of re-election is slim. This is because the WTO held a "four-month short-term election" to fill the vacancy after former WTO Director-General Roberto Azev?do resigned in May.

If consensus is not reached, a vote could be held to confirm the victory of candidate Okonjo-Iweala, who led in the preference survey, but foreign media assess that this is not a good option considering the WTO has maintained a consensus system for over 20 years since its founding in 1995 and values cooperation. China and the EU are reported to support candidate Okonjo-Iweala. In fact, there is precedent where former New Zealand Prime Minister Mike Moore and former Thai Deputy Prime Minister Supachai Panitchpakdi, who failed to pass consensus, each served as Director-General for three years.

Professor Jeong In-gyo of Inha University's Department of International Trade said, "Considering that candidate Okonjo-Iweala, who is practically an American due to her over 20 years of work at the World Bank, was not supported by the U.S., and that the U.S. issued an unusual statement opposing her after the WTO preference survey, the U.S. message is by no means light," adding, "This removes the reason for the Korean government to withdraw, and since it is unlikely to proceed to a vote as per convention, the possibility of a 'third option' similar to the 'Moore-Supachai' precedent has increased."

From the perspective of 'voter sentiment,' experts say the weight of the U.S. endorsement of Director-General Yoo is by no means light. Professor Kang Insu of Sookmyung Women's University Department of Economics said, "It appears that the U.S. wants to change the overall decision-making system of the WTO, including the composition of the appellate body after the next Director-General's term," adding, "They likely judged that it would be easier to enforce U.S. intentions if Director-General Yoo, rather than candidate Okonjo-Iweala supported by the EU and China, became Director-General."

Government Does Not Declare Withdrawal... "Participating in Consensus Process"

The government acknowledged that Director-General Yoo was behind candidate Okonjo-Iweala in the WTO preference survey but did not declare 'withdrawal.' On the 29th, the Ministry of Trade, Industry and Energy stated, "David Walker, Chair of the WTO General Council, plans to recommend the candidate agreed upon through a consensus-building process among all member countries at the special General Council meeting on November 9 as the next WTO Director-General." The previous day, President Moon Jae-in also said, "The government is neither optimistic nor pessimistic now and will do its best until the end."

A government official told Asia Economy in a phone interview, "Since the process of building consensus among member countries remains, we will participate in that process and proceed with reasonable decisions," adding, "Nothing has been decided yet regarding withdrawal or other matters."