Covid-era experience vital for leading WTO, says Korean candidate

Covid-era experience vital for leading WTO, says Korean candidate

The next head of the World Trade Organization needs recent experience of steering a trade ministry during the coronavirus pandemic when governments scrambled to protect the world trading system, Korea’s candidate to head the body has argued.

Yoo Myung-hee, South Korea’s trade minister, is one of eight contenders to succeed the Brazilian Roberto Azevedo as WTO director-general. In an interview with the Financial Times she warned that rising protectionism and Covid-19 posed a “grave threat” to supply chains and the free flow of goods and services.

“[WTO] members share the view that we need a capable [director-general] who can deliver successful outcomes at this very critical point of time,” she said.

Her comments come days before the results of the first round of voting by the WTO’s 164 member governments, in which three of the eight candidates will be eliminated.

Trade officials and bookmakers’ odds suggest Ms Myung-hee will comfortably make it through the first round, along with the two frontrunners, Kenya’s Amina Mohamed and Nigeria’s Ngozi Okonjo-Iweala.

On Friday the EU’s 27 member states agreed to back the three female candidates along with Hamid Mamdouh, a former Egyptian negotiator and WTO official. The winner is due to be announced in early November after two more rounds of voting.

Ms Myung-hee is the only candidate who currently serves as a trade minister, the latest post in a long diplomatic and political career.

“I have negotiated, concluded and implemented numerous deals, not only with major countries such as the US, China and EU, but also with countries at different stages of development,” she said.

South Korea was one of the early successes in the Asian postwar model of export-led development and consolidated its position in global high-tech supply chains a decade ago by signing bilateral trade deals with the US and EU.

The pandemic crisis could offer an opportunity for companies to strengthen and diversify trade networks, Ms Myung-hee said. “It can go either way . . . Countries can adapt measures to reshore or localise supply chains, or countries can diversify their suppliers to make them more resilient,” she said.

Trade officials say that any Korean candidate is likely to encounter political difficulties in becoming WTO director-general. The country is regarded as a US ally by China, which is deeply suspicious of Washington’s intentions in the world trading system. Seoul is also involved in a bitter, politically charged trade dispute with Japan which originated in claims against Japanese companies for wartime atrocities in Korea, and has led to attempts at technology decoupling. 

However officials say there is little evidence of strong objections from Tokyo or Beijing at this stage, although they could emerge in subsequent rounds of voting.

Ms Myung-hee said close Korean economic ties with China and Japan had created good relationships.

South Korea may also face some suspicion from emerging markets, having only recently acceded to US pressure to give up its developing country status in the WTO — a self-designating category that gave it leeway to shield its farmers from foreign competition.

Despite being a high-income economy with higher per-capita GDP than Spain, South Korea announced only last year that it would cede its developing country status.

Ms Myung-hee said: “We have had difficulties with our agricultural sector in the globalisation process, but what’s important is to have good internal consensus on this issue and it takes time.”

The competition for director-general arose from Mr Azevedo’s resignation earlier this year; he stepped down this month and the organisation is currently without an interim director-general. China vetoed a US suggestion that the American Alan Wolff, one of the current deputy directors-general, should take over in an acting capacity.

The WTO has been under persistent pressure from the Trump administration, which has paralysed its highest judicial body by refusing to appoint new judges and threatened to pull out of the organisation altogether.