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Front-runners in WTO race hone messages to overcome China-US feud

Candidates seek to bring Washington back to multilateral table with reform promises

Nigeria's Ngozi Okonjo-Iweala, left, a former World Bank economist, and Kenya's Amina Mohamed, right, a World Trade Organization veteran, are seen as top contenders for director-general of the WTO. (Nikkei collage/Reuters/Getty Images)

NEW YORK -- Top contenders in the World Trade Organization's leadership race walk a fine line between defending the current framework and promising a makeover as they seek support from a Beijing and Washington at odds over the issue.

Speaking to the Nikkei Asian Review, perceived front-runners Amina Mohamed of Kenya and Ngozi Okonjo-Iweala of Nigeria pledged meaningful reform that would preserve the WTO's position as the place to resolve the thorniest trade issues, including American complaints of Chinese state capitalism.

The U.S. and China are both "beneficiaries of the system," said Mohamed, who has previously chaired the WTO's General Council and 2015 Ministerial Conference, among others.

"They're the biggest user of the system," she said. President Donald Trump and his trade representative, Robert Lighthizer, have long complained of the U.S. receiving unfair treatment at the WTO.

But "if the WTO is going to move to the next level of being in sync with all the developments that are taking place, so that it's not left behind, its rule book definitely needs updating," Mohamed said.

To be selected as the next director-general, a candidate will need the blessing of all WTO members. This consensus-based process is vulnerable to vetoes, especially from Washington or Beijing, whose prolonged trade tensions are tightly intertwined with the global trade organization's own crisis.

Mohamed, appearing sympathetic to American complaints about the WTO's dispute settlement system, said that the Appellate Body should be reconstituted and refitted "so that the issues that brought about its demise are actually fully addressed" and that these were issues with "broad support from the membership."

Nigeria's Okonjo-Iweala, who formerly held the No. 2 post at the World Bank, also said reform of the dispute settlement system -- of which the Appellate Body is a part -- would be among her top priorities if elected. It is unacceptable that in a rules-based organization, rules are not being followed, she said in an interview.

The Trump administration has accused the Appellate Body of "persistent overreaching," arguing that its decisions alter members' rights and obligations "through erroneous interpretations of WTO agreements." The body stopped functioning in December last year when two members' terms expired, after Washington's successful efforts to block new appointments.

Asked about U.S. complaints regarding China's state subsidies -- central to the two powers' bitter trade war -- both candidates acknowledged the concerns but avoided taking a clear-cut stance.

The concerns should be resolved within the rules-based multilateral system, Mohamed argued.

"If the rules are weak, they should be strengthened; if they don't exist, they should be negotiated," she said.

"If they're violated, there are panels and you discuss that," Mohamed said. "And so, you can use the dispute settlement mechanism."

The U.S. has expressed skepticism whether the WTO's framework is well-equipped to tackle issues surrounding China's state capitalism.

Okonjo-Iweala also reached for the diplomatic response, calling the concerns "critical issues that members will need to discuss and debate on" and stressing the need to make all members feel that the system is fair.

If elected, Mohamed or Okonjo-Iweala would be the first woman and the first African to lead the WTO. Either would replace current Director-General Roberto Azevedo, who has announced that he will leave the post a year early on Aug. 31.

Six other candidates remain in the running. But regional trade frictions -- between Japan and South Korea, and between the U.K. and the European Union -- will likely hurt the chances of Seoul-backed Yoo Myung-hee and British candidate Liam Fox.

Mexico's Jesus Seade, another experienced trade negotiator and WTO insider, could be perceived by Beijing as too close to Washington. Seade was a main negotiator in the recent United States-Mexico-Canada Agreement, working with Lighthizer on the three-way trade pact.

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