WTO chief urged to reach out to small nations

The decision by a majority of the members of the World Trade Organization to oppose the United States and European Union and back Brazil’s Roberto Azevedo as its new director general shows the era of transatlantic stitch-up for key global jobs is over, experts said.

The final leg of the five-month race for the job ended this week when Azevedo beat Herminio Blanco, the former Mexican trade minister who had received the support of Washington and Brussels.

“Although Blanco is closer to any free trader’s heart, if he’d won with US and EU support it might have polarized the WTO membership,” said one trade expert who asked not be named. “The days of transatlantic stitch ups are over.”

It emerged yesterday that Azevedo had won the largest number of votes in each of the rounds that saw the total field narrowed down from nine to one, implying he had won the support of smaller and less developed nations.

Although the votes are kept secret it emerged in the final hours of the race that the US and the EU had swung behind Blanco, who has a reputation for advocating trade liberalization, although both indicated that they were happy to see Azevedo take the crown.

But Simon Evenett, professor of international trade and economic development at St Gallen University, said fears that the US and EU would shun the WTO after backing the loser were “overblown”.

“That Azevedo could get to the final round without strong EU and US opposition suggests these powers can live with him,” he told Emerging Markets. “[Anyway] in a consensus-based organization like the WTO the EU and US can still block steps they dislike.”

Although Azevedo does not take hold of the reins until 1 September, when Pascal Lamy steps down after eight years at the helm, attention has already shifted to how his leadership will affect smaller countries, such as some in the EBRD region, that are likely to have voted for him.

Shahid Bashir of Pakistan, chair of the WTO’s General Council, said Azevedo had enjoyed support from members from “all levels of development and from all geographic regions”.

Kim Elliott, a senior fellow at the Center for Global Development, told Emerging Markets: “Roberto Azevedo campaigned on the basis that he could hit the ground running in Geneva and that is exactly what he will need to do.”

She said his first priority would be to make a “plausible success” of the December ministerial summit in Bali, Indonesia, that takes place just three months after he starts. The aim of the meeting is to reach an agreement on a few elements of the all-encompassing Doha round of trade negotiations that were launched in 2001.

These are likely to include standardizing customs procedures – known as trade facilitation – while introducing new rules to promote food security and concessions for poorer countries.

“He needs to bury what is left of the Doha Round so he can move the organization forward,” added Elliott. However some observers believe that the WTO is running out of time for there to be a deal on trade facilitation.

“Expecting the EU or US to now alter their negotiating position on Doha is going too far,” said Evenett. “Lamy’s quandaries will become Azevedo’s. Optimists will hope that a fresh pair of hands might unlock negotiations. Realists will say that nothing fundamental has changed.”

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