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Crisis at the WTO: Fixing a broken dispute system
The appeals body of the World Trade Organization (WTO) is like the Supreme Court for global trade. But it’s fundamentally broken: it hasn’t been able to hear any cases or issue decisions since 2019.
The US has blocked new appointments of WTO appeals judges under the Obama, Trump and Biden administrations, complaining that the organization’s rules have hurt US jobs and industry while it lets China protect its massive domestic market from foreign competition. Until WTO reform happens, the US says, it will block any new judges from sitting on the appeals bench.
Without a minimum of three appeals judges, the WTO can’t resolve disputes. And that’s a major problem for the world’s only international organization dealing with the rules of trade between nations. But there may be hope in sight.
On GZERO World with Ian Bremmer, WTO Director-General Ngozi Okonjo-Iweala said she is hopeful the dispute settlement impasse will be resolved by the WTO's 13th Ministerial Conference (MC13) in February 2024.
“[The United States] are not the only ones who have problems with the system. Developing countries also find it difficult to access,” Okonjo-Iweala says, “So let’s take all these complaints, reform system, and make it useful for everyone.”
Watch the full interview: World trade at risk without globalization, warns WTO chief Ngozi Okonjo-Iweala
Catch GZERO World with Ian Bremmer every week at gzeromedia.com/gzeroworld or on US public television. Check local listings.
Climate change is "wreaking havoc" on supply chains
Climate change is disrupting industries around the world, and that has a major impact on global trade. On GZERO World with Ian Bremmer, WTO Director-General Ngozi Okonjo-Iweala lays out the case for diversifying and decentralizing production around the world to build resiliency and reduce risk in global supply chains.
“Climate change is wreaking havoc in so many places,” Okonjo-Iweala says, “If you concentrate your production in any one place, you risk really disrupting things.
The WTO Chief argues that by trading some of the “just-in-time” efficiency of global supply chains for resiliency, we can reduce the risk of climate disruption as well as the geopolitical risk of labor being contracted in a single country, like China.
“You see what is happening all over the world?" Okonjo-Iweala asks. "We do need to diversify if we want to build resilience.”
Watch the full interview: World trade at risk without globalization, warns WTO chief Ngozi Okonjo-Iweala
Catch GZERO World with Ian Bremmer every week at gzeromedia.com/gzeroworld or on US public television. Check local listings.
- Is the global food crisis here to stay? ›
- The geopolitics of the chips that make your tech work ›
- The Graphic Truth: The great supply chain squeeze ›
- Want to fix climate change? This is what it’ll take. ›
- What Africa has to say about climate change ›
- The Graphic Truth: Has climate change hurt or helped farmers? ›
- Ian Explains: Can we save the planet without hurting the economy? - GZERO Media ›
- "Climate is a problem, not the end of the world" - Danish author Bjorn Lomborg - GZERO Media ›
Africa's economy could rival China or India, says WTO chief Ngozi Okonjo-Iweala
The African continent has a population of 1.4 billion people, but it imports more than 90% of its medicines and 90% of its vaccines. WTO Director General Ngozi Okonjo-Iweala says the time has come to open up the continent to globalization and encourage businesses to invest in African countries.
On GZERO World with Ian Bremmer, Okonjo-Iweala makes the case for decentralizing and diversifying global trade to open up new markets, bring Global South countries into the mainstream of the world economy, and reduce reliance on any one country for crucial goods and services.
Africa hasn’t yet globalized, but when it does fully integrate into the world economy, it could create a domestic market of over a billion people that rivals that of China and India.
“Africa has about 3% of world trade, and that’s too small,” Okonjo-Iweala says. “When, not if, that experiment really gets going of Africans integrating better with themselves and trading, that is automatically very attractive for trade for the world.”
Watch the full interview: World trade at risk without globalization, warns WTO chief Ngozi Okonjo-Iweala
Catch GZERO World with Ian Bremmer every week at gzeromedia.com/gzeroworld or on US public television. Check local listings.
- G20 achieves consensus, but stays cool on climate and Ukraine ›
- The Graphic Truth: Russia vs. US trade ties in Africa ›
- What Africa has to say about climate change ›
- Putin hosts Africa summit ›
- Viewpoint: Is China the only reason the US cares about Africa? ›
- Women in power — the World Trade Organization's Ngozi Okonjo-Iweala ›
World trade at risk without globalization, warns WTO chief Ngozi Okonjo-Iweala
On GZERO World, Ian Bremmer sits down with WTO Director-General Ngozi Okonjo-Iweala to talk about world trade, the complicated business of moving goods and services across borders around the world.
Global trade hit a staggering $32 trillion in 2022 and the World Trade Organization oversees 98% of it. It’s an international institution that doesn’t normally make headlines, but has a massive role in almost every aspect of your daily life—from the food you eat, to the clothes you wear, to the cars you drive, to the phone you’re probably using to watch this video.
The WTO is the referee of global trade, a place for countries to negotiate agreements and resolve disputes. But it’s also received criticism for being too slow to adapt to the modern economy and for favoring wealthy nations over countries in the Global South.
Okonjo-Iweala has been pushing members to recommit to the principles of globalization and invest in developing economies.
“It's not right that 10 countries export 80% of the vaccines in the world,” Okonjo-Iweala says, “It's too concentrated.”
She argues that by decentralizing and diversifying global supply chains, we can make the global economy more resilient, reduce monopolies, and bring countries left on the margins of world trade into the mainstream.
Watch GZERO World with Ian Bremmer every week at gzeromedia.com/gzeroworld and on US public television. Check local listings.
- Episode 4: Broken (supply) chains ›
- US-China communications brighten over trade ›
- Climate change trade wars ›
- Hard Numbers: German far right comes up short, Ukraine dreams of drones, a space rock arrives on earth, world trade slows ›
- Women in power — the World Trade Organization's Ngozi Okonjo-Iweala ›
- What Africa has to say about climate change ›
- The Graphic Truth: Has climate change hurt or helped farmers? ›
- Crisis at the WTO: Fixing a broken dispute system - GZERO Media ›
Podcast: Calling for the "reglobalization" of trade: WTO chief Ngozi Okonjo-Iweala
Listen: Ian Bremmer sits down with World Trade Organization Director General Ngozi Okonjo-Iweala, the first woman and first person from Africa to lead the organization, for a conversation about the good, the bad, and the future of global trade on the GZERO World podcast.
In the last half century, globalization has dramatically increased economic output, created hundreds of millions of jobs, and lifted millions of people out of poverty. But development between countries has been uneven, and global inequality is on the rise. Covid-19 and the war in Ukraine disrupted exposed weaknesses in the supply chain. And rising tension between the US and China has led to a world economy that’s becoming increasingly fractured.
But is the way out of a crisis not less trade, but more? How do we make sure the future of trade is fair to countries in the Global South, who are reeling from runaway debt and bearing the brunt of climate change?
Subscribe to the GZERO World Podcast on Apple Podcasts, Spotify, Stitcher, or your preferred podcast platform, to receive new episodes as soon as they're published.TRANSCRIPT: Calling for the "reglobalization" of trade: WTO chief Ngozi Okonjo-Iweala
Ngozi Okonjo-Iweala:
Globalization has lifted up more than a billion people out of poverty. What we need to do is not walk away from it, but reimagine it, to pull those who are left out from the margins into the mainstream of global trade.
Ian Bremmer:
Hello and welcome to the GZERO World podcast. This is where you'll find extended versions of my interviews on public television. I'm Ian Bremmer, and today we are talking about trade, the complicated business of moving goods and services around the world. Global trade hit a record 32 trillion in 2022 and the World Trade Organization overseas 98% of it. We don't know what happens with the other 2%. The WTO doesn't usually make front page headlines, that's probably a good thing, but it has a huge role in almost every aspect of your daily life. From your morning Brazil roasted coffee to the Chinese made smartphone that you're using to listen to this podcast.
The WTO has been a force for globalization, but it's also received criticism for favoring wealthy nations and exacerbating global inequality. Not to mention its broken dispute settlement system that's made resolving trade conflict, that's what it's supposed to do, virtually impossible. Can the WTO lower tension in US-China trade wars? Can it avoid further fragmentation? Can it effectively address the challenges faced by economies in the Global South? I'm talking about the good, the bad, and the future of global trade with WTO Director General Ngozi Okonjo-Iweala. Let's get to it.
Announcer:
The GZERO World podcast is brought to you by our lead sponsor Prologis. Prologis helps businesses across the globe scale their supply chains with an expansive portfolio of logistics real estate, and the only end-to-end solutions platform addressing the critical initiatives of global logistics today. Learn more at prologis.com.
Ian Bremmer:
Madam Director General, so good to see you.
Ngozi Okonjo-Iweala:
Thank you, Ian.
Ian Bremmer:
I want to start, we're here on the sidelines of the United Nations General Assembly, and you have been talking about the need for re-globalization. I'm wondering if you could explain to our audience, what do you mean by that?
Ngozi Okonjo-Iweala:
Well, thank you so much. We are in an era of geopolitical tensions and many people are very pessimistic about the impact of globalization. Globalization has lifted up more than a billion people out of poverty, but it's true that some have been left behind. Poor people in rich countries and poor countries have been left behind. With that in mind, and with the tensions we've seen with the war in Ukraine, the pandemic and all that, an emerging pessimism about whether globalization can deliver has taken hold. We're saying that, please, let's remember what this globalization has delivered. What we need to do is not walk away from it, but reimagine it, and reimagine how it can help to pull those who are left out from the margins into the mainstream of global trade. That's what we're calling re-globalization.
We're seeing opportunities where people see difficulties. Let me just be clear. We've seen the vulnerabilities of supply chains during the pandemic, and that has made people believe that we should re-shore, let's produce as much as we can at home.
Ian Bremmer:
At home.
Ngozi Okonjo-Iweala:
Let's produce with our neighbors, our friends, because that's the only way we can be sure. And I understand those sentiments, and we are seeing some of that re-shoring and near shoring. But then there's also the desire to build global resilience, not to rely too much on any one group of countries or any country to produce things. So I'm seeing people saying, "We want interdependence, not overdependence. We want to build global resilience." Well, re-globalization is a tool for building global resilience.
Ian Bremmer:
So when you hear both the Americans, President Biden and others, and the Europeans, Ursula von der Leyen and others, talk about de-risking, and they're primarily talking about the relationship with China, but it does reflect and factor into this idea of global resilience as opposed to national resilience, or resilience with your friends. How do you relate to that concept right now? The concept of de-risking?
Ngozi Okonjo-Iweala:
Absolutely. I actually think the de-risking language began to come up after we started talking of this issue of building resilience to re-globalization, of not throwing away the benefits. To me, de-risking, when I listen to President von der Leyen talk about it, is very similar to what we're saying. Let us build supply chains, decentralized supply chains to countries where the environment is good, but who have not been in the mainstreams of globalization. And many of those exist. People usually talk of China plus one, and the plus one will be Vietnam or Indonesia or India. But we've got other countries that have the right environment. What about Bangladesh? What about Brazil? Mexico is already in. What about in Africa? We've got Kenya, we've got Rwanda, we've got Senegal, and I could go on. I don't want to say my own country, Nigeria, which is the largest population.
Ian Bremmer:
You just said it. You just said it. Come on
Ngozi Okonjo-Iweala:
In East Asia-
Ian Bremmer:
And the largest economy in Africa by the way.
Ngozi Okonjo-Iweala:
And the largest... In East Asia, we've got Cambodia, which is receiving some of that investment, and Laos, so I could go on and on. What we're saying is let's look at others, other countries where the investment environment is right. Let's decentralize supply chains. It's not right that 10 countries export 80% of the vaccines in the world. It's too concentrated. Semiconductors, we know that that's also very concentrated. Rare earths and minerals, let's look, rare earths and minerals. There are many countries in Africa and Latin America that have these, let's decentralize and try to bring those countries' supply chains into the mainstream.
Ian Bremmer:
Global labor has also been very concentrated, right? I mean, for the period of globalization, China was a very big piece of, let's have the factory for the world. It's incredible amounts of inexpensive, very efficient labor. And you're right, some people in developed countries were displaced. But also, there's a lot of concentration risk. And I do think that some of this conversation is about, "Wait a second, we don't need as much labor as we used to. That labor is a lot more expensive than it used to be. Shouldn't we be building things closer to where the consumer markets are?" Irrespective of whether that's at home or not.
Ngozi Okonjo-Iweala:
Well, absolutely, Ian. You see, business, I mean, labor costs in China were already going up before the pandemic, and that is why you see a lot of businesses also moving to Vietnam to produce things, to take advantage of the cheaper labor there, the higher productivity. So even before all this disappointment, and the disruption we saw in supply chains, businesses were already making wise decisions based on the economics of what they could see. So we should allow businesses to make the wise decisions because I think they'll do the right thing mostly. Now, I think we may have to trade some efficiency to build resilience, meaning that we may need to diversify and decentralize production to many more countries.
Ian Bremmer:
So just-in-time was a little bit too efficient, if you will, too dangerous?
Ngozi Okonjo-Iweala:
Well, it played its role and the world benefited from it. Those supply chains, and the fact that you could manufacture goods cheaply, benefited consumers in developed countries. It was disinflationary. But now the time has come... Let me say one reason why I think we really need to pay attention to what we're saying, climate change. Climate change is wreaking havoc in so many places. If you concentrate your production in any one place, you risk really disrupting things. There are examples when there were floods in Thailand at one time and then the automobile industry was impacted by that. You see what is happening all over the world. So we do need to diversify if we want to build resilience. Diversified, decentralized production. But you are killing two birds with one stone.
Ian Bremmer:
Who are the champions? I mean, of course the WTO. But when you look at leaders around the world, who do you see as champions for re-globalization today?
Ngozi Okonjo-Iweala:
Well, I can tell you that Chancellor Olaf Scholz has been talking about, how do we decentralize the fertilizer supply chain? Just as an example. He's been talking about this very-
Ian Bremmer:
Really urgent, given the Russian War in Ukraine, of course.
Ngozi Okonjo-Iweala:
Exactly. That again showed the vulnerabilities of dependence on the Black Sea region for grain feed and fertilizer. So that talk about, how do we decentralize fertilizer production so that the world is not so dependent on any one region? That's what we're also talking about. There you also create jobs in countries that were not part of the global, let's say, fertilizer, or vaccine, or pharmaceutical supply chain. So why don't we think of that? Why is it that Africa, why must it import more than 90% of its medicines and 99% of its vaccines? 1.4 billion people. Why don't you decentralize production there? You create jobs for young people, for women, and at the same time you bring the countries there into the mainstream of trade and better integrate them. So we can kill two birds with one stone. So Chancellor Scholz is there, President Macron is talking about it, and also, the de-risking notion that President von der Leyen is talking about is very related to this re-globalization.
Ian Bremmer:
When I look at the first phase of globalization over the last 50 years, and I see that China became a huge winner through that, there was an emergence of a global middle class, so a lot of countries that were able to become middle income, most of Africa had not made it yet. When you're talking to me about imports of medicines, you're talking about vaccines, Africa hasn't yet globalized. What needs to happen at this United Nations General Assembly meeting? What needs to happen with the Africa Union being a part of the agenda for the G20 now they've brought in? What can we see in the next year or two, three, that would help, meaningfully, Africa to get on the path of globalization?
Ngozi Okonjo-Iweala:
Well, Africa, you're absolutely right, has about 3% of world trade, and that's too small. But Africa is doing some things that are pretty exciting. The African continental free trade area is an area of the 55 countries and 1.4 billion people. If... When, not if, that experiment really gets going, of Africans integrating better with themselves and trading, and creating a real market of 1.4 billion, equal to that of China and India, that is automatically very attractive for trade for the world. We need to remove the barriers to trade, reduce the costs, because trade costs on the continent are quite high. When you do that, I think that will make the continent much more attractive for investment and bring it into that margin. Then re-globalization can really begin to take place. So the continent has an instrument that it has put in place, we're very proud of that.
Many countries are trying to reduce cost. Actually, the WTO has a trade facilitation agreement, which is aimed at trying to reduce the cost of trade. If they implement that to the maximum, it'll really help to make the countries more attractive.
Lastly, we have an investment facilitation agreement under negotiations now with 110 of our members, many from Africa, that is designed to remove the barriers in the way of investment and make it easier. So the countries need to act, re-globalization will not arrive on your doorstep automatically. You need to make yourself attractive by removing the barriers to investment and trade, and then businesses will want to locate in your country. I think that this is on its way on the continent, so that's how we can get in. We now need to convince businesses that Africa is not the big risk. There's a perception that it's a huge risk to invest on the continent, and perception is running ahead of reality.
Ian Bremmer:
So we've talked about the impact of geopolitics on re-globalization. The WTO, of course, is also caught up in some of this. Since I have you here, Ngozi, I have to ask you about the broken dispute resolution settlement mechanism, and that the Americans have been holding up the appointment of appellate judges. Supposedly, reform needs to happen of the WTO before they're willing to make that happen. Is that moving forward?
Ngozi Okonjo-Iweala:
Yes. Yes, it is. First, just to correct one thing, the system is really not broken, it's two tiers. There's a panel level, and last year, 17 cases were brought. And cases are being brought every day.
Ian Bremmer:
And they get resolved at the panel level.
Ngozi Okonjo-Iweala:
Yeah. The panel gives a judgment. The problem we have is, quite rightly, like you said, Ian, the second tier, the appellate body, is not functioning, because as you said, the US blocked the election of judges into that tier. So what happens is if there's a "judgment" against a member, they can appeal it into the void, since that second tier is not functioning. And it's very crucial that it functions, because if you negotiate agreements, it's not good that the mechanism for enforceability doesn't work well and smoothly, so we are reforming it. The US has been very constructive now and they have laid out what their problems are with the system. We have a process ongoing at the WTO. We hope that by the time we have our 13th ministerial meeting in Abu Dhabi-
Ian Bremmer:
Next year, yeah.
Ngozi Okonjo-Iweala:
Yes, end of February 2024, that we would've gone a substantial way towards agreeing on this reform and the form it should take. So work is visibly underway, and I'm hopeful. I don't want to be too hopeful, but I'm hopeful that we will go a long distance in this reform.
Ian Bremmer:
Does that mean that next year, more likely than not, we actually will have a breakthrough of this impasse on the appellate court?
Ngozi Okonjo-Iweala:
I'm hoping so. Actually, at our 12th ministerial, June last year, members signed on the dotted line to reform of this well-functioning dispute settlement system by 2024. I think the issue now is, when in 2024? And we're trying to say, "Let's get it done by February when we have this ministerial meeting."
Ian Bremmer:
Well, we're very litigious in the United States, so we want to be able to bring people to court. Let's get this resolved.
Ngozi Okonjo-Iweala:
Let me tell you that the US is one of the biggest users of the system, and they've won the most cases. They've also lost, but they've won more than they've lost. So we hope that... Some of the complaints they're making are legitimate. They're not the only ones who have problems with the system, developing countries also find it difficult to access. So let's take all these complaints, let's try and reform the system and make it useful to everyone.
Ian Bremmer:
Madam Director General, thanks so much for joining us today.
Ngozi Okonjo-Iweala:
Thank you, Ian.
Ian Bremmer:
That's it for today's edition of the GZERO World podcast. Do you like what you heard? Of course you did. Why don't you check us out at gzeromedia.com, and take a moment to sign up for our newsletter, it's called GZERO Daily.
Announcer:
The GZERO World podcast is brought to you by our lead sponsor, Prologis. Prologis helps businesses across the globe scale their supply chains with an expansive portfolio of logistics real estate, and the only end-to-end solutions platform addressing the critical initiatives of global logistics today. Learn more at prologis.com.
Subscribe to the GZERO World Podcast on Apple Podcasts, Spotify, Stitcher, or your preferred podcast platform, to receive new episodes as soon as they're published.
Ian Explains: What is the World Trade Organization?
You probably don’t spend a ton of time thinking about the World Trade Organization (WTO), but it has a huge role in almost every aspect of your daily life—from your morning Brazil-roasted coffee to the Chinese-made smartphone you’re probably using to watch this video.
The WTO is an international organization that deals with the complicated business of moving goods and services across borders. It’s kind of like the referee for global trade, setting the rules and providing a forum for countries to negotiate agreements and resolve disputes. It’s why you can buy avocados from Mexico, clothes from Vietnam, or cars from Korea in the United States without a second thought.
Global trade ballooned to a staggering $32 trillion in 2022 and the WTO oversees 98% of it.
The WTO has been a force for globalization. It’s opened up new markets, lowered tariffs, and lifted millions out of poverty, but it’s also received criticism for favoring wealthy nations and exacerbating global inequality. Not to mention a broken dispute settlement system that’s made resolving international trade conflict virtually impossible.
On Ian Explains, Ian Bremmer dives into the history of the WTO, why the US is blocking appointments of WTO judges, and what all of this has to do with Japanese octopus.
Watch the full interview: World trade at risk without globalization, warns WTO chief Ngozi Okonjo-Iweala
Watch the upcoming episode of GZERO World with Ian Bremmer on US public television this weekend (check local listing) and at gzeromedia.com/gzeroworld.
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- Graphic Truth: Who Wins From A US-China Trade War? ›
- Crisis at the WTO: Fixing a broken dispute system - GZERO Media ›
Women in power — the World Trade Organization's Ngozi Okonjo-Iweala
Starting a new job is always daunting. For Ngozi Okonjo-Iweala, who just weeks ago started a new stint as director general at the World Trade Organization, the timing could not be more trying: she is taking over the world's largest global trade body amid once-in-a-generation public health and economic crises that have emboldened protectionist inclinations around the world.
Who is Ngozi Okonjo-Iweala, and how has her worldview shaped her politics and policymaking?
Nigerian trailblazer. "Investing in women is smart economics, and investing in girls, catching them upstream, is even smarter economics."
As Nigeria's first female finance minister (2003-2006 and 2011-2015) under presidents Olusegun Obasanjo and Goodluck Jonathan, Okonjo-Iweala oversaw sweeping financial reforms that helped stabilize the country's volatile economy. Indeed, her leadership was crucial in ensuring $18 billion in debt forgiveness, helping Nigeria secure its first-ever sovereign debt rating. She also pioneered a program that culled "ghost workers" from the civil service's payroll, saving around 163 billion naira ($398 million) over two years.
Okonjo-Iweala also started the privatization of state sectors like power, though that process has since proven to exacerbate problems, resulting in spotty power supply and price increases for the country of 200 million people. Additionally, though Okonjo-Iweala tackled corruption by making states report their accounts, failed attempts to diversify the country's economy, a stated aim of Okonjo-Iweala and the Jonathan government, has left Nigeria, Africa's largest oil producer, vulnerable to the shocks of global oil markets.
Central to her economic outlook is the belief that the political and economic fruition of Nigeria — and that of other African countries — is contingent on better integration of women into all areas of political and economic life. Though many Nigerian women have become influential entrepreneurs, she notes, lack of education opportunities for women and girls in the country's north have impeded development and growth (a crisis exacerbated by the deteriorating security situation in northern Nigeria over the past decade.)
It's worth noting that Okonjo-Iweala paid a personal price for her reforms and crackdown on corruption in the oil industry: In 2012, her 82-year old mother was kidnapped by bandits demanding the finance minister's resignation — and cash. Okonjo-Iweala refused to resign and her mother was eventually released safely (though details remain unclear).
African representation. "The low-income countries in Africa and elsewhere are some of the most rapidly growing economies in the world. These countries ought to be given more of a voice."
In Nigerian politics, as well as during her 25 years at the World Bank (she rose to managing director), and now at the WTO, Okonjo-Iweala has always emphasized that African nations, as well as other emerging markets, are some of the fastest-growing economies in the world. (Before oil prices fell sharply in 2016, Nigeria's economy was growing steadily at 6.3 percent.) Pointing to the fact that many frontier economies in Africa and Asia were the engines of the world's economic revival in the aftermath of the global financial crisis in 2009, Okonjo-Iweala says that African nations should be given more voice in global forums where important international decisions are made.
It's precisely this outlook that Okonjo-Iweala — who until recently was also chair of the GAVI board which aims to boost vaccine access in the developing world — plans to bring to her tenure at the WTO. In recent months, Okonjo-Iweala has lobbied against "vaccine nationalism," and she's advocated for using WTO intellectual property rules to expand vaccine development and manufacturing in developing countries. She has pointed to licensing deals like the one struck with India's Serum Institute that allows it to produce AstraZeneca's vaccine as a model — a view shared by many leaders, including South Africa's President Cyril Ramphosa who recently said that rich countries were practicing "vaccine apartheid" by blocking emerging markets from manufacturing vaccines on their home turf.
The importance of symbolism. Many media reports have focused on Okonjo-Iweala's bonafides as the first African and first woman to head the WTO after almost seven decades (the WTO emerged from the former General Agreement on Tariffs and Trade). That's a reductive way of looking at Okonjo-Iweala's accomplishments, but her appointment as WTO chief at this tumultuous moment in its history is indeed an historic breakthrough for African women, who see their own social and professional prospects boosted by her accomplishments. As one Nigerian academic recently said, "[Her] achievement is not just a day's work. It's a kind of investment that she has nurtured for a long time."
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- Ian Explains: What is the World Trade Organization? - GZERO Media ›
- Africa's economy could rival China or India, says WTO chief Ngozi Okonjo-Iweala - GZERO Media ›
- Podcast: Calling for the "reglobalization" of trade: WTO chief Ngozi Okonjo-Iweala - GZERO Media ›
Texas grid shows need to fix infrastructure in US; RIP Rush Limbaugh
Ian Bremmer discusses the World In (more than) 60 Seconds:
What's happening in Texas?
Speaking of weird weather, my goodness yeah, I didn't know this was coming up here. Yeah, it's cold, right? There's snow. It looks horrible and millions of people without energy and of course that is because the level of infrastructure investment into the Texas grid is well below what it needs to be. There's a lack of integration. Texas' grid largely stands by itself. It is not under the authority of or coordinated multilaterally with broader energy infrastructure. And there has been a lot of investment into renewables in Texas. It is certainly true. They've been very interested in that. Sped up under former Governor Perry but still the vast majority of electricity is coming from fossil fuels. It's coming from coal and mostly oil and gas.
And so, all of these people that recently have said it's because of renewables, and you can't rely on renewables and that's why you've got all of these shutdowns in Texas. No, it's because you haven't invested properly in infrastructure resilience. First of all, there's a lot more gas shut down then there is wind shutdown, and you've got temperatures like this in Northern Europe all the time and worse and they don't have this kind of wind shut down because they invest properly in their infrastructure. So, you know, you go to LaGuardia, and we're finally fixing it in New York, but for quite a while a lot of people including Joe Biden said it was like going to a developing country, they said third world country when you look at LaGuardia. Well, when you look at a lot of infrastructure in the US it feels that way and one of the reasons why I strongly support a trillion dollar plus spend after the $1.9 trillion for relief on infrastructure because that's a good investment that will actually return more than the dollars you put in over the long-term. And that's the way you should think about the deficit of whether or not you're getting a better return on your investment. Just like you do for corporations, you do for sovereigns.
The World Trade Organization, WTO, has a new leader. Who is she and what challenges lie ahead?
She is Ngozi Okonjo-Iweala. And I mean, she's a fixture. I've known her, I've seen her at events for well over a decade. She was the minister of finance for Nigeria. She was the number two at the World Bank. And I mean whether you're talking about Davos or IMF annual meetings, any big multilaterals, her presence there as a technocrat, as a plain smoking, really smart pro-globalization force, is kind of legion. It would be really surprising if she hadn't gotten a major, additional position at some point in her career. WTO was an obvious place for her. Not going to be easy, first of all because big decisions have to be taken unanimously and you've got 160, 170 members of WTO so it's hard to do. Secondly, the WTO needs reform, it needs to be focused much more on digital exchange and trade. It needs to be modernized the way trade agreements, multilateral and bilateral do and that's going to be very hard to do. And of course, the Chinese government, the second most powerful economy in the world routinely abrogates the outcomes that are forced upon it by World Trade Organization judges. So do the Americans not least of which in terms of the US-China trade conflict itself. So, it's not an easy role but I do think that she's going to be seen as very active in it, kind of like Christine Lagarde at the ECB when she got that appointment. I mean, this was completely uncontroversial that she would get this position.
Okay, what's happening between Iran and the US over sanctions?
Not very much. The United States certainly wants to rejoin the old Iranian nuclear deal, but they understand there's a lot of domestic pushback unless it is made tougher or at least broader in terms of how long it lasts as well as involving things like ballistic missile development where the Iranians are in abrogation of the UN security council resolutions. The Iranians are saying, "We'll come back to the JCPO as it was but nothing more." These are hard people to negotiate with. It's a hard government to negotiate with, the bureaucrats there. It took years on the final points under Obama and Kerry and that was when the secretary of state was personally involved. There is no cabinet member in the Biden administration that is personally anywhere close to as invested in getting this Iranian deal done if it's hard as Kerry was five years ago. And so, as a consequence, I think there'll be forward momentum, but I think it's going to be much slower than people expect. Now, there is a point that once you start engaging in negotiations a whole bunch of third countries that were concerned about doing anything that might be seen as gray area in terms of busting sanctions like buying Iranian crude and other sorts of goods will suddenly, you'll see more leakage. And so, the Iranians just by virtue of moving back towards the United States and people getting confident about JCPOA, they won't have another million barrels a day on the market, but you'll start to see slippage, leakage in that and that means that energy prices will start going down a bit.
And Rush Limbaugh at 70 no longer, passed away today. What do I think?
I think that Rush Limbaugh is like a precursor to Mark Zuckerberg. He's someone that became an iconic figure by giving people what they wanted, not what they admitted they wanted but what they actually wanted, figuring out what that was and maximizing his reach and his influence as a consequence of that. Talk radio really became the force that it was in the United States because of Rush and his connection with his audience, his understanding of how the medium worked, his ability to raise extraordinary amounts of advertising revenue that had never been done in radio in a news format before that. All things that he became a unique figure and of course an entire field developed around him. And after talk radio we get cable news; we get Lou Dobbs on CNN even talking about a presidential run at some point. And then of course you get social media and now you have Mark Zuckerberg. And I think that you can draw a line directly between those two men. And I think they both caused a lot of damage internationally and certainly in terms of civil society in the United States but also on this day of Rush's passing to recognize just how well he understood the opportunity that was in front of him and how much he was able to maximize it, kind of a force for capitalism in a country that is most interested in unleashing animal spirits. And there you have it, RIP Rush Limbaugh.