Decision time for Asia as WTO job race goes to the wire

Asian countries have less than a week to decide which of the final two candidates for the top job at the World Trade Organization to vote for.

Consultations with trade ministers to choose between Herminio Blanco and Roberto Azevedo began in earnest on Wednesday. Pakistan’s ambassador Shahid Bashir, who runs the WTO’s governing General Council, has set a deadline of next Tuesday May 7 for the 159 WTO members.

The decision will be crucial for Asian countries, many of whose economic strategies rely on taking advantage of a low-tariff globalized trading environment.

The battle to succeed director general (DG) Pascal Lamy came down to a two-horse race last week after the three candidates from the wider Asian region failed to garner enough support.

Taeho Bark, the South Korean trade minister and his New Zealand counterpart Tim Groser fell out of contention. The informal process of sounding out WTO members, which is led by a “troika” of the ambassadors of Sweden, Pakistan and Canada, also led to the departure of Mari Pangestu, Indonesia’s tourism minister and also a former trade minister.

The race pitches Blanco, who led Mexico’s negotiations to establish the North American Free Trade Agreement, against Azevedo, the WTO ambassador for Brazil, whose government has been criticised for using protectionist policies.

One independent trade expert who asked not to be named said that Asian countries were aware that Mexico was fully engaged in the global value chains that are essential to the economies. “Brazil on the other hand is almost entirely uninvolved in GVCs,” he told Emerging Markets. “Brazil’s main agenda item has been the liberalization of agriculture and now currency wars. One might say that the Mexico [candidate] has both feet in the 21st century trade agenda, while the Brazilian does not.”

Blanco chose to attend last week’s summit of the Asia-Pacific Cooperation (APEC) in order to lobby the region’s policymakers, but Azevedo stayed away.

Kim Elliott, a senior fellow at the Center for Global Development, said different Asian countries would look at the candidates using different priorities. “Indonesia may have a different view from what Thailand does, for example,” she told Emerging Markets. She said that some countries might seek to judge the candidates according to the policies of their national government, however hard they both insisted that they would represent all 159 members rather than one country or one region.

“Part of the problem is that the need to build consensus means that it is hard to tell what they would do from their public statements,” said Elliott.

“What we do know is that Azevedo is emphasizing his insider experience because he has been in Geneva for several years and knows the system,” she said. “Blanco has emphasized that he has the private sector experience. The fact that he has that experience may be attractive to some countries in Asia.”

One key issue will be the strategy that the winner uses to inject some momentum into the stalled Doha Development round of trade negotiations.

Richard Baldwin, professor of international economics at the Graduate Institute, Geneva, said no one seriously believed there was any chance of wrapping up the Doha round during the term of the next WTO head.

“One interesting question is what can the next DG do to keep the lights on in the organization and to maintain WTO’s reputation – to avoid it sliding into obscurity and irrelevance for anything other than dispute settlement,” he told Emerging Markets.

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