Five key multilateral races to watch in late 2020

In addition to the U.S. presidential election in late 2020, there are five critical elections in the multilateral system that will impact the U.S. and the world. Leaderships changes in the multilateral realm include those of the World Trade Organization (WTO), the Organization for Economic Cooperation and Development (OECD), the Inter-American Development Bank (IDB), the European Bank for Reconstruction and Development (EBRD), and the International Finance Corporation (IFC). Electing the heads of these organizations is a complicated process, fraught with political interests. U.S. decision makers need to be aware of the crosscutting pressures accompanying these elections.

The first race is the WTO — the premier multilateral organization dealing with trade — which will elect its next president on Sept. 7. The WTO regulates trade in goods, services, and intellectual property between member countries and provides frameworks for negotiating trade agreements and resolving trade-related disputes. The current secretary general of the WTO, Roberto Azevêdo, a Brazilian, is leaving the position one year before his term was set to expire, and there are eight candidates now vying to take his place. Out of those eight, five are likely contenders. There is Jesus Kuri, a Mexican economist; Amina Mohamed, a Kenyan former trade minister; Ngozi Okonjo-Iweala, a Nigerian twice-former trade minister; Tudor Ulianovschi, a Moldovan former minister of foreign affairs; and Abdel-Hamid Mamdouh, an Egyptian former director of the WTO’s trade in services and investment division. Prior to Azevêdo, the director general position has most recently been held by individuals from France, Thailand, and New Zealand, and it was widely thought that Africa would get the next turn.

In 2020 African nations are expected to weigh in, and with two African women in the race there is the potential for a vote-split. Because the position has been held for the last nine years by a Latin American, the Mexican candidate would seem to be less viable. There are other candidates; a South Korean who Japan is likely to veto, a Saudi whose association with the crown and the still-recent murder of journalist Jamaal Khashoggi will likely be disqualifying, and a candidate from the UK whose pro-Brexit stance is expected to draw a veto from EU member states. The selection process is done by consensus, with all 164 member states needing to agree.

The U.S. stakeholders include the United States Trade Representative (USTR), the White House, and the State Department. The selection process for the next secretary general of the OECD, an organization of advanced economies, will commence on Aug. 1, with member countries being asked to put forward candidates by the end of October. The current head, Mexican economist Angel Gurria, is stepping down after his third five-year term. Before him, a Canadian, Donald Johnston, occupied the seat. Prior to Johnston, for its first 50 years, the organization was run by Europeans. It is rumored that a senior White House official will be put forward by the Trump administration. There is also the potential for a “new European” — someone from Estonia or Poland — or potentially a candidate from Australia or New Zealand. The U.S. has an interest in the OECD and more attention will be paid to this race as the year progresses. 

The third race concerns the President of the IDB, the premier Latin American development bank, to be chosen between Sept. 12-13. There are currently three candidates: American Mauricio Claver-Carone from the U.S. National Security Council; Argentine candidate Gustavo Beliz; and former president of Costa Rica Laura Chinchilla. The window for nominations begins the week of July 27. Historically, the United States has not put forward candidates for the presidency, opting to occupy the Vice President spot, but this year the Trump administration has broken with that tradition. The U.S. owns 30 percent of the bank’s shares, making it the largest shareholder in the IDB, followed by Brazil and Argentina with 11 percent each, and Mexico with 7 percent. The key for a U.S. victory are more than 50 percent of the shares or, separately, 15 of the 28 shareholders in the Western hemisphere. The abstention of Argentina, Mexico, Nicaragua, Spain, Italy, one or two center-left European countries, and possibly Costa Rica could prevent Claver-Carone’s confirmation. In a scenario where the U.S. needs help achieving quorum, it may leverage support from the candidate in the October EBRD elections.

Which leads us to the fourth race, the election of the President of the EBRD, the regional development bank of the post-Soviet era on Oct. 8. The three candidates are from Poland, France, and Italy. In a scenario where the French candidate, Odile Renaud Basso, pushes to become the next leader, she will need U.S. support. There is a potential that France, hoping to delay the process for four weeks in order to wait on the results of the U.S. Presidential election, will be one of the countries to deny quorum in the IDB race. In this event, the U.S. could support the French race at the EBRD to push through an IDB candidate.

Finally, the fifth race concerns the IFC since the current CEO, Philippe Le Houérou, will be stepping down on Oct. 1. The IFC is the development finance arm of the World Bank Group and for 62 of the last 65 years the position has gone to a European. The decision for the IFC is largely a function of their Board of Directors, but the World Bank President, American David Malpass, will have large weight. The U.S., EU, and African shareholders will all have an interest, but it bears considering: If the Europeans are seen as “giving up” the IFC job, does that somehow impact the races mentioned above? Do they ask for something in return at the World Bank?

All these races should be determined before Nov. 4, when Americans vote for their next president. These questions will need answers at that time.

Originally published on on July 28, 2020.

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