Luncheon with Ms. Ngozi Okonjo-Iweala, Director General of the World Trade Organisation: 4 takeaways

Analysis

We were honoured to host Ms. Ngozi Okonjo-Iweala, Director General of the World Trade Organisation, for an exclusive lunch in Paris on Friday 28 January 2022, co-organised with Jeune Afrique Media Group. Gathered at the Cercle de l'Interalliée, our guests had the opportunity to exchange with the former Nigerian minister of Finance, who was appointed to head the WTO in early 2021. This lunch resulted in fascinating exchanges on a diverse trade-related topics.

The merits of international trade

While the very foundations of international trade can be questionned in a post-Davos world, the Director General (DG) recalled the merits of trade, that has to be seen as a key part of the solution to the 21st century’s challenges. Trade remains key to end poverty. Between 1980 and 2020, international trade has led to a reduction in the poverty rate by 30 percentage points accross the world. The WTO aims to step up this momentum by implementing more trade agreements to revive supply chains and transform their patterns; “that is what I call reglobalisation. The supply chain crisis is an opportunity to diversify manufacturing countries who were marginalised.” The DG concluded by stressing that the WTO was still assessing if the crunch in global supply chains was more transitory or structural. In both cases, this phenomenon is likely to undermine poorer countries’ maritime transport.

AfCFTA is on the right track

As AfCFTA members agreed on last 29 January on rules of origin, the implementation of the free trade area was a key topic of our luncheon. The DG shared her enthusiam for such a new opportunity for the African continent, that will gain a lot from it. She also recalled that the AfCFTA will not be sufficient to promote intra-continental trade; there is an urgent need to build more cross-borders infrastructures on the continent. She reminded us that “sometimes it costs more to bring some goods from an African country to another African country, than to bring it from China”.

A fine balance between public subsidies and economic liberalism regulation

The thorny issue of state subsidies was also discussed. In times of crisis, governments tend to subsidise domestic companies, even though this runs against today's widely promoted economic liberalism. The DG explained that state subsidies could be beneficial, as long as they respected the WTO reglementations; “more and more countries are becoming more interventionist. It looks like industrial policies are back. But we would be very very careful that it doesn't violate WTO’s rules”. She recalled her personal experience as a former Minister of Finance in Nigeria, where she had to subsidise several companies during periods of crisis.

The WTO's mediation role

The DG also addressed in detail the trade war between the US, China and Europe and the role of the WTO as a mediator on a daily-basis. Strategic international competition has been gaining momentum in recent years. The fisheries industry more particularly reflects the increased trade tensions of recent years. To counter this dynamic, the WTO is a strong advocate of international strategic cooperation. “We need confidence for building measures. No agreement should take 20 years, it is too much time. Either an agreement is taken for the people, either it is not”. The DG then stressed the importance of trust in order to promote trade and agreements; “I will tell you the one thing that will solve the main obstacles; it is trust. There is a lot of mistrust between the members of the WTO, between developed and developing countries. Getting agreement negotiated is so difficult. As long as you have got that mistrust, getting agreement is difficult”.