President Donald Trump speaks at a campaign rally in Omaha, Nebraska. Photo / AP
President Donald Trump speaks at a campaign rally in Omaha, Nebraska. Photo / AP
New Zealand's senior trade officials will be watching nervously as the US administration continues its efforts to undermine the strength of the World Trade Organisation.
Overnight the US used its power of veto to reject the front-runner for the job of next WTO director-general, Nigerian candidate Ngozi Okonjo-Iweala.
"If there'sone way to wreck an international trading system it's to make sure there is no leadership," said international trade consultant Stephen Jacobi.
The WTO was critically important for New Zealand, he said.
"We're at a critical time with an enormous amount of things to get done next year and with an incredible amount of dysfunction in the WTO itself."
The latest US move follows efforts by the Trump administration to block appointments to the WTO appellant body - which judges international trade disputes.
Since Trump came to power the US has blocked all appointments to the body, effectively ending its power to rule on trade disputes.
Okonjo-Iweala, ironically also a US citizen, was on track to be appointed by consensus of WTO members but was vetoed by the US as she is understood to be too "pro-trade".
Bloomberg, reporting sources close to US officials, said US trade representative Robert Lighthizer has pushed for South Korean trade minister Yoo Myung-hee, even though Okonjo-Iweala gained American citizenship in 2019.
Okonjo-Iweala was deemed to close to pro-trade internationalists like Robert Zoellick, a former US trade representative from the Bush administration who worked with her when he was president of the Washington-based bank, Bloomberg said citing unnamed sources.
International trade consultant Stephen Jacobi. Photo / Jason Oxenham
The US was the lone opponent of the majority-backed Okonjo-Iweala, Bloomberg said.
The move could mean months of gridlock over the selection process and more diplomatic friction with trading partners like the European Union.
New Zealand had a delicate diplomatic role in the dispute, Jacobi said, because David Walker, our WTO ambassador in Geneva was leading the consultations with members.
We also faced a potentially difficult trade dispute next year - which was with the EU and UK over tariff rate quotas for sheep meat.
There was a proposal that they would be split with the UK exit from the EU, which New Zealand is protesting.
But there was still some recourse for dispute resolution as a number of countries had agreed to form a "multi-party interim appeal arbitration arrangement".
A New Zealand lawyer had been appointed to that body, Jacobi said.
Ironically the US had just lost a key trade dispute against China over tariffs that were put in place.
They no longer had any ability to appeal it and so were technically in breach of WTO rules.
WTO decisions are made by a consensus of its 164 members, which means a single country -- especially the world's largest economy -- can create a stalemate to pressure others.
The Geneva-based institution will keep working to reach a consensus ahead of a meeting of the General Council tentatively set for November 9.
