The new World Trade Organization chief has backed Britain’s push for a shake-up of global rules in services trade, but warned sweeping reforms of the under-fire organisation will take a long time.
Ngozi Okonjo-Iweala, the first African and first woman to head the trade referee, said the “sooner we can pin down the rules” in trade in services the better after the UK called for them to be modernised.
The former Nigerian finance minister also told The Daily Telegraph that wider WTO reforms would help Britain’s post-Brexit trade thrive as she vowed to push to reduce export restrictions blocking vaccine and medical supplies.
Dr Okonjo-Iweala, who was appointed WTO director general last week, inherits an organisation in crisis and in need of huge reform after failing to cope with the surge in protectionist trade policies in recent years.
She said trade in services will be the “wave of the future” as she admitted the beleaguered trade referee has “nowhere to go now but up”.
In response to the UK’s calls for a trade in services revamp Dr Okonjo-Iweala said: “I do agree that this is an area in which the WTO can really help and do much better to get the multilateral trading system working… Trade in services is growing in leaps and bounds.”
International trade secretary Liz Truss has repeatedly called for the WTO to help liberalise trade in services as part of wider reforms. Last month she said the UK wanted to “lead the creation of new rules in areas like digital and data, services and the environment”.
The UK is the world’s second-largest services exporter but high barriers on this trade remain globally and the WTO has not revamped its rules in decades.
The WTO is in charge of the international trade rulebook and settling trade disputes but an overhaul will have to be agreed by its members. Dr Okonjo-Iweala faces a formidable challenge revitalising the multilateral organisation that was near-paralysed by the Trump administration.
Mooted reforms include overhauling its disputes settlement system and clamping down on unfair trade practices, such as large state subsidies.
Dr Okonjo-Iweala said she would look for a “very quick win” by helping to solve the pandemic, pressing for rule changes to aid the flow of medical goods and reduce export restrictions.
However, she cautioned that many of the bigger reforms “will not be that quick”.
“You need to build a consensus around which reforms [and] the sequencing, and so that will take a little bit of time to do so it’s not going to be easy. If it were easy it would have been done long ago.”
Dr Okonjo-Iweala added that the UK would “absolutely” benefit from an overhaul of WTO rules.
“If we strengthen and update those rules that are lagging behind, for instance in e-commerce [and] the green economy, I think these are areas where the UK will find [it] very useful to be a part and parcel of the WTO,” she said.
“The WTO and the multilateral trading system is the home for the UK and I think that is why I’m sure the trade minister Liz Truss and the Prime Minister are interested in strengthening the WTO.”