WorldCity Business Magazine

Help wanted at the WTO

by Jeffrey Sparshott

Power and influence inside the WTO rests with its biggest members such as the United States, European Union and Brazil not the organization itself. The WTO bureaucracy is small by the standards of multilateral organizations, and the WTO’s top official, the director general, has little real authority and poorly defined goals in the international realm.

But the director general’s job is still important. It offers a bully pulpit, which an effective leader can use to push, prod and promote the cause of trade liberalization. And it holds a certain degree of prestige for the country that places its candidate atop one of the world’s most visible forums. Developing nations see the WTO post on a par with the World Bank and International Monetary Fund the Bretton Woods institutions and are especially keen to have one of their own win the post.

So, naturally, selecting a new leader causes, at best, a flurry of diplomatic maneuvering and, at worst, an out-and-out brawl. The selection process that ended in 1999 entailed a bruising battle between rich and poor nations that contributed to a divide at the WTO and undermined the now infamous ministerial meeting in Seattle.

"U.S. and foreign officials noted that WTO members’ selection of a new director general… had been lengthy and divisive. This experience left members without leadership during a good part of their preparations for Seattle and lingering hard feelings," a U.S. government report said immediately after the Seattle debacle.

The last fight also led to an unsatisfying compromise, when the director general’s four-year term was split into two, three-year appointments one each for rich and poor nations. The first half went to New Zealand’s Michael Moore, and the second to Thailand’s Supachai Panitchpakdi, the current director general. Neither candidate was allowed a second term, creating instant lame ducks.

The selection process for a new director general officially began in January. Supachai’s term ends August 31. The WTO and its 148 members hope to have a successor in place by the end of May.

Four candidates from three continents are in the running for a renewable, four-year term: France’s Pascal Lamy (former European trade commissioner), Mauritius’ Jaya Krishna Cuttaree, Uruguay’s Carlos Perez del Castillo, and Brazil’s Luiz Felipe de Seixas Correa. Right from the start, the rich-poor divide made itself known.

“I firmly believe that the next director general of the WTO should come from a developing country,” Seixas Correa told WTO members as he formally launched his campaign. “Developing countries form the majority of the members of the WTO. We are negotiating the Doha Development Agenda. Convergence between the trade and the development agendas is essential for the WTO to retain a pivotal role in the international system of the 21st century. On top of that, it is hard to accept that, having control of the Bretton Woods institutions, developed countries should also be at the helm of the WTO,” he explained.

Lamy discounted geographic origin as qualifying or disqualifying a candidate: “I will not attack [the other candidates] for their past, for their passports, or for what they have said,” he said.

Whoever wins will oversee the most ambitious rounds of trade talks in more than a decade, a feat that would raise the WTO’s prestige, could boost the world economy and may just help bridge the rich-poor divide.

At this early stage, Lamy might be considered a favorite, both because of his strong resume and working relationship with former U.S. Trade Representative Robert B. Zoellick. But a broad-based group of African, Pacific and Caribbean nations has backed Cuttaree, who comes from a developing nation that is a rare trade and development success story from the world’s poorest continent. Latin America has never held the post, and covets it, though Brazil and Uruguay both fielding a candidate may hurt the region’s chances.

All four men are qualified, with extensive experience in government, diplomacy and international trade. Each professes a desire to strengthen the international trading system. In fact, on the policy front there are only slight discrepancies in the goals they have outlined. But insiders know the selection of a WTO director general is seldom driven by policy differences among the candidates. In the end, the fight will be political, and potentially divisive.

"What counts above all in the job of director general is the ability to bash heads together while maintaining the appearance of genial diplomacy,” says Jacques Bourgeois, an international attorney in the Brussels office of U.S. law firm Akin Gump Strauss Hauer & Feld. “Unfortunately, the process is a diplomatic obstacle course for different groups of WTO members, whose sole real concern is whether ‘their’ candidate wins."