Kenyan Nominee for WTO Rejects Changing MFN Principle for Multilateral Agreements

Amina Mohamed, Kenya's Sports, Culture and Heritage minister and its nominee to lead the World Trade Organization, said strengthening rules on industrial subsidies and reforming the Appellate Body are critical for the WTO's continued success.

Mohamed, who spoke to the Washington International Trade Association's guests online on Aug. 6, said she's the best pick for director-general because she has both WTO experience and is a politician. Mohamed was Kenya's ambassador to the WTO, and later was the country's foreign affairs and international trade minister. During that time, she chaired the 2015 Ministerial Conference in Nairobi, which achieved several negotiating advances, including an amendment to the International Conference on Trade Related Aspects of Intellectual Property Rights (TRIPS) agreement that dealt with prescription drugs and an expansion of the products eligible for the Information Technology Agreement (ITA).

“I can deliver complex and sensitive political agreements at the WTO,” she said. “I have already auditioned for this job.”

The ITA-2 took 17 rounds of negotiations and three years to get the European Union and 23 other countries to agree to eliminate tariffs on 201 technology products, including semiconductor manufacturing equipment, MRI machines, and advanced semiconductors.

WITA co-moderator Wendy Cutler, the vice president of the Asia Society Policy Institute, asked Mohamed if the WTO should consider changing the rules of the road for multilateral negotiations so that countries that don't agree to lower their tariffs don't get the export benefits of other countries' decisions to lower theirs. Some former U.S. trade representatives say that that kind of change is necessary, and that plurilateral agreements should not have to cover 90% of the volume of trade in a good (see 2007160064)

Mohamed said no, that sharing the benefits on a most favored nation (MFN) basis is absolutely necessary to get the plurilateral agreements approved by all countries. “We did it in Nairobi with ITA,” she said. “I had to travel to several capitals to get it done. The parties to the negotiations had negotiated it -- but it was being rejected by a majority of members of the WTO.”

Because of the MFN principal, the WTO countries were able to adopt the ITA-2 at the same time as the export subsidies agreement, she said.

Mohamed did support the U.S. and EU position that the WTO should have stronger rules on industrial subsidies, and said that WTO reform “has to start with an honest reckoning” of the system's weaknesses.

She also said that WTO participants “really must” fix the Appellate Body. She said that when she was serving in Geneva back in 2004, she was telling Appellate Body members that countries were angry that decisions were taking more than 90 days, and that some of their decisions were adding to or diminishing from the rights of members that were established when the General Agreement on Tariffs and Trade (GATT) was negotiated.

She said some of those concerns still have not been addressed, 16 years later.

She acknowledged that not all countries have the same vision for WTO reform, but that all agree on transparency, and that can be improved first. Renewing confidence in the system is critical before negotiating progress can be made, she said.

Mohamed downplayed the contentiousness of self-declared developing country status. She said that since Singapore, Brazil and Taiwan have already announced they are no longer due special and differential status, this reform is already on its way. She also said that the Trade Facilitation Agreement offered leniency based on need, not on official developing country status.