Riyadh Initiative is key to meaningful WTO reform
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The race to become director general of the World Trade Organization (WTO) is getting to the final lap, and to the sharp end of business. Over the next six weeks, each of the five candidates will have the opportunity to persuade the 164-strong membership that he or she has the unique qualities to undertake one of the toughest jobs on the world stage.
It is a talented field, with three men and two women of impeccable credentials vying for the job. Between now and Oct. 6, that field will be whittled down to two, and in early November — a few days after the US election — the successful candidate will be announced.
Saudi Arabia has a strongly fancied runner in the race in the form of Mohammad Al-Tuwaijri, a former fighter pilot, banker and economic policymaker who is among the final five. Having got this far, Al-Tuwaijri has some key advantages over his rivals, and will be looking to exploit them to the full in the closing stages.
The job calls, of course, for a deep knowledge of global economics and finance, which the Saudi candidate shares with the others. It also calls for a large dose of diplomatic expertise to balance the competing interests of WTO member countries that do not always see eye to eye. And, crucially, it requires a willingness and expertise to implement large-scale reform because, in a nutshell, the WTO is in trouble. Having performed satisfactorily during the era of globalization-led growth from the early 1990s onward, it stumbled during the global financial crisis — which reversed two decades of expansion in world trade — and has never recovered.
Al-Tuwaijri has some key advantages over his rivals, and will be looking to exploit them to the full in the closing stages.
More recently, the rise of populist and nationalist leaders across the world has proved an insurmountable obstacle to reform, which all members agree is essential.
Against a background of increasing hostility between China and the US across a range of subjects — not confined to trade policies — getting agreement on WTO reform has been impossible.
Saudi Arabia and Al-Tuwaijri have a solution to that in the shape of the Riyadh Initiative. This program — a far-reaching platform for WTO reform — grew out of the meetings of trade ministers of the G20 countries that have been taking place, despite the pandemic restrictions, all year under the Saudi presidency.
The initiative seeks to resolve key areas of disagreement between WTO members on crucial issues such as the recognition of “developing country” status with all the special treatment that brings, state subsidies to industry, and the use of the consensus principle in reaching decisions on the organization’s affairs.
The current rules were laudable and praiseworthy when they were enshrined in the Marrakesh Declaration that established the WTO in 1994. But, the reformers argue, they have been overtaken by events on the global stage and are badly in need of reform, especially under the impact of the COVID-19 pandemic.
As with most WTO deliberations recently, the debate over the Riyadh Initiative has come down to a thinly disguised disagreement between China and the US, and it will require all the powers of diplomacy of the new WTO director general to reconcile those differences.
Al-Tuwaijri starts with more advantages than the rest, quite apart from his own personal skills as a policymaker and project deliverer.
Saudi Arabia is a longstanding ally of the US whose influence in Washington DC has grown under the present administration. But it is also a major trading partner of China, supplying the lion’s share of the country’s energy needs via crude oil exports, which also gives it an influential voice in Beijing.
The Kingdom has a foot in both camps, and the independent credentials that could make all the difference when tough WTO negotiations come down to the wire.
This gives Al-Tuwaijri unique advantages that none of the other candidates enjoy, whatever their other merits.
- Frank Kane is an award-winning business journalist based in Dubai. Twitter: @frankkanedubai
