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Korea’s DG candidate on retooling the WTO: ‘Success breeds success’

August 5, 2020

Korean Trade Minister Yoo Myung-hee, a candidate to lead the World Trade Organization, says she knows how to close a trade deal. With the biggest trade deal of them all -- the World Trade Organization -- on the brink, Yoo believes the only way forward is to prove the beleaguered institution can build on successes on its way to reform.

Each success, even if modest, helps secure political support and momentum, according to Yoo; each is also critical in rebuilding trust among members to take on the structural reforms nearly everyone agrees are needed, if not what they entail.

“Everyone talks about reform and everyone talks about rebuilding trust. But what matters is how to actually realize it and how to actually implement it. I think the [director-general] qualifications matter in that,” Yoo told Inside U.S. Trade in an interview on Wednesday. She cited her work with numerous countries “at various levels of development” and agreements she has secured, including during the challenging trade environment of the past few years.

“And during the process I have earned the trust and confidence of my counterparts,” she added. “But how can I actually show that in a specific manner? I think that really depends on our specific negotiations and specific situations and countries.... For example, some outcomes at [the upcoming ministerial conference] -- if we can achieve a successful outcome at MC12, success breeds success and we can build on that outcome to further generate momentum and political will to address other issues, more comprehensive WTO reform issues.”

Yoo is one of three women -- along with Amina Mohamed of Kenya and Ngozi Okonjo-Iweala of Nigeria -- among the eight candidates competing to succeed Director-General Roberto Azevêdo, who steps down at the end of the month. She would be the first woman to head the organization or its precursor, the General Agreement on Tariffs and Trade.

The remaining candidates are Jesús Seade of Mexico, Hamid Mamdouh of Egypt, Tudor Ulianovschi of Moldova, Mohammed Moziad Al-Tuwaijri of Saudi Arabia and Liam Fox of the United Kingdom.

Yoo sees her background as ideally suited for a WTO leader today -- a network of political contacts, strong working relationships with all the major powers, and a history of closing deals. She offers both the expertise of a 25-year career in international trade with the “fresh perspective” of someone not enmeshed in Geneva, she said. A lifetime of watching Korea evolve into a major trading nation -- due in part to the opportunities presented by the WTO -- will help her relate to other members, no matter their development status, she added.

In a time of increasing U.S.-China tensions, Yoo said she could “bridge the gap” among members.

“Based on my experience and expertise, I would serve as an informed and effective, trusted facilitator who can bridge the gap between major countries or between developed and developing countries and would try to build on success,” she said.

She pointed to her experience in helping to facilitate Korea’s opening up, arguing that at times the most challenging part was addressing domestic concerns from specific sectors worried about the consequences. Navigating that domestic consultation process and working collaboratively with industries gave her a window into the domestic realities countries must deal with, she said, and experience to draw upon in helping them address those concerns.

Free negotiations and the rest will follow

In talking reform, Yoo said a revitalized -- and fully functioning -- rulemaking arm would be a significant step toward needed changes in other areas including the dispute settlement system and U.S.-China discord.

Meetings with a variety of members over the past month have shown they all “share the same disappointment and even frustrations that the WTO has fallen behind,” she said. She argued that this was at least a start in addressing reform: “I believe there is a collective will to move forward.”

The upcoming ministerial will loom large for the WTO as members try to achieve some of this momentum, she said. The meeting will be a “litmus test” for the relevance of the WTO, she added, and a “watershed moment” for restoring trust among members. An outcome at the ministerial would be that first success that members, along with the next director-general, could begin to build on. The ministerial, which had been set for June, has been postponed to 2021 due to the pandemic.

If the U.S. and China, for instance, see progress at the WTO, Yoo argued, the countries might be more likely to view it as a “meaningful platform” to deal with trade concerns, including upgrades to the rulebook. The “success breeds success” mantra applies to the two largest economies as well, she added, if they are to rebuild their relationship.

Perhaps most importantly, she suggested, a well-functioning negotiating pillar takes pressure off the dispute settlement system when it comes to gap-filling and adding or subtracting rights and obligations -- two major concerns expressed by the U.S. regarding the Appellate Body, which has been paralyzed since December.

Members want a functioning dispute settlement system, Yoo said, but the divide over how members perceive its operations and intentions remains wide. She advocated for “open and creative” engagement by members, including broadening the conversation from Geneva to more capitals in an effort to cultivate political will. She also floated the idea of bringing in outside experts to identify potential “out-of-the-box” solutions.

If she becomes the next director-general, Yoo said her initial priorities would be, first, to prepare for the ministerial and ensure not only an outcome, but also a post-ministerial agenda. Second and third would be to resolve the Appellate Body impasse and address the fallout of the pandemic. On the latter, she argued that the WTO should increase transparency and strengthen its monitoring function amid the crisis. Fourth on her list is WTO reform, which she said would be an ongoing effort throughout her term. The challenges at the WTO will not be solved overnight, she said, contending the foundation should be laid immediately to give members the best chance to move forward.

“There is really a trust deficit at the WTO. I could feel that when I was in Geneva and also when I was talking with my fellow ministers from around the world. The role of the new DG should be to rebuild trust in the multilateral trading system, especially after COVID-19,” she concluded. “And things can go either way, but I see this as a moment of opportunity for reform and improvement in the multilateral trading system.” -- Hannah Monicken (hmonicken@iwpnews.com)

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