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Jakarta Post

Indonesia wants future WTO chief to support multilateral trade, developing countries

  • Dzulfiqar Fathur Rahman

    The Jakarta Post

Jakarta   /   Wed, September 30, 2020   /   05:01 pm
Indonesia wants future WTO chief to support multilateral trade, developing countries A pedestrian traffic signal lights up next to the entrance of the World Trade Organization (WTO) headquarters in Geneva on Dec. 10, 2019. (AFP/ Fabrice COFFRINI)

Indonesia wants the next World Trade Organization (WTO) director-general to uphold the multilateral trade system, support developing countries’ interests and be able to handle the United States-China trade war, an official has said.

Syamsul Bahri Siregar, the country’s ambassador to the Geneva-based trade body, said on Tuesday that the candidate should also be willing to maintain consensus-based decision-making in the organization amid some members’ concerns that the technique limited the organization’s decisiveness.

The new WTO chief, Syamsul added, should seek closer coordination with other international organizations to address the COVID-19 pandemic, which had led to export restrictions, a global trade contraction, food insecurity and disruptions in the global value chain.

A director-general who could nudge the United States and China toward the negotiation table would be helpful to Indonesia because the country depends on trade with the world’s two biggest economies.

“This is perhaps the most difficult, especially for developing countries, based on how we feel. When the US proposes something, China rejects it. It is hard for us to choose a position in the middle,” Syamsul said in a virtual discussion held by the Trade Ministry and the Trade Policy Forum on Tuesday.

Indonesia’s non-oil and gas exports to China and the US accounted for 18.19 percent and 12.08 percent, respectively, of the overall non-oil and gas exports in the January to August period, making the two countries its top overseas markets.

The WTO is trying to fill the void left by Brazil’s Robert Azevedo after he stepped down in late August amid a growing appetite for protectionism in response to the pandemic. The multilateral body has forecast a contraction of between 13 percent and 32 percent in global trade this year because of the global health crisis.

Replacing Azevedo has become increasingly important as the US President Donald Trump’s administration threatens to leave the trade body and hinders the process of appointing members to its Appellate Body, which hears members’ appeals in trade disputes.

Many consider Amina Mohamed of Kenya, Ngozi Okonjo-Iweala of Nigeria and Yoo Myung-hee of South Korea the frontrunners in the three-stage selection process, raising expectations that the WTO may have its first female leader. The United Kingdom’s Liam Fox and Egypt’s Abdel-Hamid Mamdouh are also seeking the post.

Syamsul said there was a growing preference for a director-general from an emerging economy and an underrepresented country.

Riza Noer Arfani, the head of the Center for World Trade Studies at Gadjah Mada University (UGM) in Yogyakarta, said WTO politics could influence the outcome of the selection process and would outweigh considerations of candidates’ competence in trade issues.

The new leader, Riza added, would face many challenges, especially related to the political economy of COVID-19 vaccine production and distribution.

“I am proposing that we choose a director-general based on their COVID-19 handling,” said Riza. “For the long term, we need a director-general candidate who has a mind to reorganize supply and commodity chains, production networks and value chains.”

The WTO members are set to confirm the new leader no later than Nov. 7 by consensus, although the organization’s rules allow for a vote as a last resort. The option has never been used.

Trade Policy Forum advisor Hatanto Sumitro said Indonesia would need a director-general who had experience in developing a country’s trade, in trade negotiation and who had sympathy for developing countries’ struggles, among other qualifications.

“It would be even better if [the new leader] could assure developed countries that reviving their economies [from the pandemic-induced downturn] will also depend on the revival of the economies of smaller countries, like Indonesia, or African countries, like Nigeria,” said Hatanto.