The Next Head of the WTO? Choose Wisely.
It’s time to put someone from the BRICS in charge of the world’s leading trade body.
In a historic first, the next leader of the World Trade Organization will hail from Latin America. A field of nine candidates has now been winnowed down to two, one from Mexico and one from Brazil, meaning that, at a crucial moment in the history of the international trading system, the leader of the central organization for resolving global trade differences and shaping future agreements will come from the emerging part of the Western Hemisphere.
One candidate, Roberto Azevedo, is currently Brazil’s ambassador to the WTO. The other, Herminio Blanco, is a former Mexican trade minister and one of the architects of the North American Free Trade Agreement. Both are widely respected and well-liked by those who know them well. On the surface, the two candidates seem extremely similar. But to suggest that these men represent a common perspective could not be further from the truth. They illustrate a choice as stark as past and future for an organization that finds itself at a critical turning point.
The knock on Azevedo is that he has never served as a trade minister, a post that has typically been a jumping-off point for past WTO chiefs. But he has been exceptionally active within the halls of the trade organization’s Geneva headquarters — an acknowledged leader there, especially among the world’s rising powers, and he is seen as more closely in touch with the trade issues of the day than is Blanco.
Blanco, trained at the University of Chicago, is exceptionally competent. I worked with him when I was a senior U.S. trade official during the Clinton administration and I know that my colleagues and I always held him in very high regard. But, in the eyes of his critics, he has been out of the international trade arena for too long, having been working in the private sector and not actively involved in the complex, frustrating debates surrounding the Doha world trade talks or the need for meaningful reform of the WTO. The organization, set up officially in 1995, doesn’t seem up to addressing the problems of a modern world crisscrossed with non-tariff barriers or grappling with the new problems of Internet- and services-based trade, widespread currency manipulation, and incipient protection appearing in many guises.
There is, however, a bigger difference between the two men that is already manifesting itself in the early whip-counts of potential voters from around the world. According to trade-community insiders in Washington and around the world with whom I have spoken over the past few days, Blanco is seen as the preferred candidate of the United States and much of what might be described as the traditional or old-school trade establishment. Azevedo, on the other hand, appears to have deeper support among the BRICs and among many of the other representatives of the emerging world.
This split matters, because the principal divide in world trade today is not, as it once was, East-West, trans-Atlantic, or even trans-Pacific. It is much more north-south, a split between developed countries that have long dominated the trade discussions and the emerging ones who, through flexing their muscle effectively for the first time during the Doha Round negotiations, put those discussions on ice until their core concerns could be resolved.
Among the most critical of those concerns are frustrations emerging powers have with the seemingly bullet-proof, reform-resistant series of subsidies that are protecting developed-world agricultural producers at the expense of their counterparts like Brazil, India, and other emerging countries with great potential to provide feed the world. Similarly, the questions associated with how and when emerging powers begin to compete and operate on the same terms and to the same standards as developed powers also loom large. Newly proposed trade deals, such as the recently opened negotiations between the United States and the European Union, have at their heart a desire by these first-world powers to grow closer together and to maintain a more unified front when challenged by the emerging powers led by the BRICs.
The WTO has, thus far, despite a global set of responsibilities, largely been a club built on the vision and delivering special power to representatives of the developed world. But while much is murky about the future of the global economy, one thing is not: The balance of trade growth is shifting, irreversibly to the emerging world. (By 2010, according to the United Nations, developing-country import growth already was responsible for about half of world trade growth.) In addition, the emerging countries represent both a majority of world population and the nations with the greatest need for consistent economic growth if social equity or stability are our shared goals as a planet.
Developed countries fear that having a Brazilian lead the WTO would put their interests at risk. But there’s no reason to think so. Quite the contrary: Azevedo, given his background and support among the most important countries of the emerging world as well as his familiarity with the WTO as it is currently operating, might well be more likely to offer a path toward practical North-South solutions. In addition, Brazil’s own strong stand against currency manipulation — whether by China or the United States — is an example of why it is old-think to assume that an individual’s place of birth represents an ideological strait-jacket.
There are few global organizations about which the view is so widely held that reform is essential and few where, for that reform to be fair and effective, it is so vital that the new voices of the global economy be fairly represented. Because Roberto Azevedo is the best person to lead that change and stand for those voices, he should be the WTO’s next director-general.
Posted on May 8, 2013, in Banking, buisiness, EU, Government, International affairs, politics, Wealth and tagged Brazil, BRIC, David Rothkopf, Herminio Blanco Mendoza, Mexico, North American Free Trade Agreement, United States, World Trade Organization, WTO. Bookmark the permalink. Leave a comment.