The WTO is close to choosing its next leader in a final round pitting Brazil against Mexico, with the winner facing the tough task of restoring the clout of global commerce’s rule-setting body.
Brazil’s WTO ambassador Roberto Azevedo and his rival Herminio Blanco, Mexico’s former trade minister, are expected to learn as early as tomorrow whether they have won a contest that is seen as too close to call.
All concerned are keenly aware that the successor to director-general Pascal Lamy from France must act fast to revive the WTO’s moribund global trade talks.
Both men have pitched a similar vision for a negotiating process, which they say needs overhauling.
“The multilateral trading system is weakened by a complete paralysis in the negotiations,” Azevedo said, explaining it was time to “unclog the system.”
Blanco, meanwhile, said it was time to reboot the 159-nation WTO.
“The main challenge is the ‘W’ in ‘WTO,’” he said, underlining that the logjam had pushed members into negotiating bilateral and regional deals.
Supporters of a WTO-wide deal warn that other accords can create a “spaghetti bowl” of conflicting rules, thereby failing to serve global commerce.
Created in 1995, the WTO aims to spur growth by opening markets and removing trade barriers, including subsidies, excessive taxes and regulations.
The stated goal of its “Doha Round,” launched at a summit in Qatar in 2001, is to deploy trade to develop poorer economies.
However, members repeatedly have clashed over the give and take needed to reach a deal, with deep splits notably between China, the EU, India and the US.
Amid fears that December’s WTO summit in Bali could fail, the new director-general will have to act fast after taking over on Sept. 1.
“The new DG obviously will come in at a rather precarious time for the WTO,” said Sergio Marchi, Canada’s former trade minister and ex-WTO ambassador.
Besides working the diplomatic circuit, Marchi said, the new leader must repair ties with the business community — the hub of global commerce.
“The business community has taken the view, ‘Call me when you’re serious’ … Obviously getting Doha together is a challenge, but if the institution is seen as irrelevant, it is irrelevant,” he said.
Against that background, Blanco seems to have the advantage.
The 62-year-old economist was Mexico’s negotiator for the 1994 North American Free Trade Agreement and has solid private sector credentials, running an international trade consultancy and sitting on US, Asia and European company boards.
However, Azevedo’s insider status could be key.
The 55-year-old career diplomat was Brazil’s chief litigator in a raft of WTO disputes before becoming ambassador in 2008.
“In the WTO today, you don’t have any low-hanging fruit. You have to go up the tree, grab the fruit and bring it down. And if you don’t know the system, and don’t know the trees, you’re not going to get the fruit,” he said.
Marchi underlined the symbolism of a Latin American WTO leader.
“It’s the emerging economies that are now the economic locomotive globally, and both Brazil and Mexico have done tremendously well thanks to trade,” he said.