22.03.2021 Author: Konstantin Asmolov

Yet Another Failure of Seoul

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In July 2020, the Republic of Korea made an ambitious attempt to put its man — Yoo Myung-hee, director of the Trade Policy Department of the Ministry of Industry, Trade and Energy — in charge of the World Trade Organization.

Speaking at a general meeting of the WTO, Yoo Myung-hee said almost immediately that the organization should become “the supreme court of international trade,” and the reasons for this policy were apparent. Given the trade war with Japan, where many issues can be resolved through the verdict of the WTO, Seoul really needed its own person at the head of this organization.  It should be kept in mind that every time a South Korean is appointed head of an international organization, it is positioned as a great diplomatic victory — and at the end of Moon Jae-in’s presidential term, such victories would make a fine display to the electorate.

Of course, in an interview with Japan’s Kyodo Tsushin agency, Yu Myung-hee emphasized that the election of the WTO director general and the trade war between Japan and the ROK had nothing to do with it: The ROK and Japan are good trading partners that cooperate despite bilateral problems.   In this context, she will not comment on the ongoing Seoul-Tokyo dispute because she is acting as a candidate for the next CEO, not as a representative of the South Korean government.

For the sake of pushing Yoo Myung-hee through, South Korea developed a frantic activity. Moon has at various times personally requested the support of Yoo from leaders of more than 13 countries, including German Chancellor Angela Merkel, Canadian Prime Minister Justin Trudeau, Indian Prime Minister Narendra Modi, Danish Prime Minister Mette Frederiksen, Malaysian Prime Minister Muhyiddin Yassin, leaders in Italy, Egypt, Luxemburg, Kazakhstan and Chile. Foreign Minister Kang Gen-hwa did the same, and the ROK media described the effort as “a months-long selection process marked by intense power politics and behind-the-scenes diplomacy”.

As for Yoo’s program, it boiled down to the fact that the WTO is not up to its tasks.  The unprecedented economic crisis caused by the COVID-19 pandemic has shown that each country has to solve its own problems. This means that the countries of the world must restore confidence in the multilateral trading system by making it more resilient and flexible.  Unfortunately, it is not clear how exactly.

At the beginning of October 2020, Yoo Myung Hee made it to the final round. Her opponent was Ngozi Okonjo-Iweala of Nigeria, who has twice served as finance minister at home and gained international recognition as a World Bank executive.

This is where all sorts of problems started.

First, it was no longer possible to play on the women’s agenda or the theme of political correctness. And Okonjo-Iweala’s program seemed more realistic.

Second, Ngozi Okonjo-Iweala had the support of African countries, as well as EU countries, for which ties with the black continent are very important and the support of the Nigerian was a “sign of trust”. These two groups occupy most of the members in the WTO, which has already created difficulties. But besides, China is increasing its influence among African countries, which means that Beijing was not going to support Yoo Myung-hee either.

Third, Japan launched a campaign against Yoo Myung-hee, reasonably deciding that the election of a Korean woman as WTO director general would be detrimental to the country’s national interests. The Japanese Foreign Ministry was working with countries in Asia, Europe, and Latin America to get them to vote against the Korean candidate.

On October 12, the president convened a special high-level meeting to discuss Yu Myung-hee’s strategy. Moon Jae-in promised to personally make every effort to help Yoo win the contest, especially through personal letters to his foreign colleagues and phone calls.  The media in South Korea were filled with headlines like “WTO’s First Female Boss?”, “Seoul Trade Minister Yoo Myung-hee’s Ambitious Challenge.”

Despite widespread predictions that the trade minister was falling behind his rival, South Korean officials did not give up hope based on their prediction that Yoo could still turn the tide in his favor. The point is that the appointment requires the consensus of all countries, and here is a chance to outplay the situation by sheepish persistence, refusing to withdraw the application (as the losing candidate did before) and forcing his opponent to do so if he lacks the willpower.

On October 28, 2020, in Geneva, the parties spoke out. Ngozi Okonjo-Iweala received significantly more votes. Exact numbers have not been disclosed, but some reports indicate that the Nigerian candidate has received the support of more than one hundred of the 164 countries.

The WTO does not disclose how many votes each candidate got. However, WTO spokesman Keith Rockwell let it slip that 27 delegations took the floor at the WTO General Council meeting, and only one state expressed its unwavering support for Yoo Myung-hee. It was the United States of America. Yoo has been called “a bona fide trade expert who has distinguished herself over a 25-year career as a successful trade negotiator and trade policy maker” and “she has all the skills needed to be an effective leader of an organization.”

Then the ROK media started writing that if Washington continues its blockade, for the first time in the 25-year history of the WTO, the winner could be determined by a vote of the members. Or there could be a compromise solution where they let both women take the lead. Alternatively, they certainly should not withdraw the bid, without caring that WTO activities might be paralyzed because of it: “the government should support Yoo Myung-hee while there is still a chance that she can win.”

The new leader was to be formally approved by the WTO General Council on November 9, after the US presidential election. On November 6, however, General Council President David Walker announced that it had been postponed.

On November 17, Yu Myung-hee hinted that she would not defer her bid for the post of WTO director general. When asked by a KBS radio host about the possibility of her resignation, she replied that the race was still in the process of choosing a final candidate. And she “will join the consensus-building process by consulting with the major countries.” By this was meant active work with the United States. On December 12, Yu Myung-hee met with Joe Biden’s nominee for US Trade Representative (USTR) Catherine Tai, as well as outgoing US Trade Representative Robert Lighthizer.

It was not until February 5, 2021 that Yoo Myung-hee withdrew her bid to head the WTO. On February 6, the office of the USTR said that the United States respects Yoo Myung-hee’s withdrawal of her application, and the Joe Biden administration offers “strong support” to Okonjo-Iweale.

According to South Korean experts, such a move by Biden was aimed at undoing Trump’s “America First” approach, which has caused numerous trade disputes. Under him, the US argued that the WTO was slow and bureaucratic, ill-prepared to deal with China’s dominant economy, and unnecessarily restricted US attempts to impose sanctions on countries that unfairly subsidize their companies or export at unusually low prices.

Here are some conclusions. “Desperate attempts to produce the first head of an international organization since former UN Secretary-General Ban Ki-moon more than a decade ago” have failed. The ROK media overlooks the fact that of the 26 countries that supported Okonjo-Iweala, there were also those with which Seoul actively negotiated. And Trump’s Washington support for Yoo was more for its own reasons, out of a desire to mess with the WTO. And as soon as the authorities changed, the Korean woman was offered to leave amicably.  This is the only way to understand the passage that Yoo Myung-hee made this decision “as a result of close coordination with the US government to promote consensus among WTO member countries”, as the Korean media emphasized.

Expectedly, because the conduct of foreign policy under the slogan “we are not afraid to break the accepted rules and agreements” usually does not lead to victory.

Konstantin Asmolov, PhD in History, leading research fellow at the Center for Korean Studies of the Institute of the Far East at the Russian Academy of Sciences, exclusively for the online magazine “New Eastern Outlook”.

 

 


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