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Bridging Trade Divides at WTO

GENEVA — The race to determine who will next head the World Trade Organization is shaping up into a struggle of rich nations versus the developing world, a chasm that in many ways reflects the broader concerns the WTO is facing.<BR><BR>Four...

GENEVA — The race to determine who will next head the World Trade Organization is shaping up into a struggle of rich nations versus the developing world, a chasm that in many ways reflects the broader concerns the WTO is facing.

Four candidates have thrown their hat into the ring, beginning quiet rounds of campaigning to succeed Thailand’s Supachai Panitchpakdi, who is set to step down as WTO director general on Aug. 31. They are former European Union Trade Commissioner Pascal Lamy, Uruguay’s Carlos Perez del Castillo, Mauritian Minister of Industry, Commerce & International Trade Jaya Krishna Cuttaree and Brazil’s Luiz Felipe de Seixas Correa.

Each candidate hopes to win a four-year term — something that was denied the last two WTO director generals. The last race, in 1999, ended in a dead heat between Supachai and former New Zealand prime minister Mike Moore. In a compromise resolution, Supachai and Moore agreed to each serve a three-year term.

WTO rules call for the 148 members to agree on a new leader by the end of May. If consensus fails, an election may be held to end a stalemate. But the behind-the-scenes nature of the process means that the campaigns have been low-key.

The candidates spoke to the WTO membership last month, and so far, diplomats said, Lamy and Castillo seem to be in the lead. Cuttaree and Correa stand out for their willingness to play to the divide between rich and poor countries, a strategy that causes great unease among diplomats from the wealthier nations.

Lamy, 57, stepped down as the EU’s trade commissioner in 2004, after a five-year term. The French national — who worked at Credit Lyonnais and in the French government prior to his stint as trade commissioner, also has the support of the full EU.

He had a close relationship with outgoing U.S. Trade Representative Robert Zoellick, and sources said he is seen as likely to get the backing of Washington. However, Zoellick’s deputy Linnet Deily noted that the U.S. hasn’t yet decided which candidate to support.

Lamy is a diplomat who’s managed to balance the needs of the developing world with rich nations’ desire for access into closed markets.

“Trade opening needs to move hand-in-hand with improved recognition of core labor standards,” he said in May 2004.

Even diplomats who don’t support him acknowledge that Lamy is statesmanlike, a key quality in a position where one must negotiate with top officials from around the world. He’s also proven himself to be an independent thinker — notably by standing up to France in advocating the elimination of agricultural export subsidies.

Castillo, 66, until February 2004 served as Uruguay’s ambassador to the WTO. He comes from a small country that has been highly supportive of free trade, yet has a keen understanding of the problems facing the developing world, particularly Latin America, where he enjoys wide support.

In a nod to the varied desires of rich and poor countries, Castillo said the WTO needs to focus on “reaching a balanced package of results that reflects the interest of all members.”

Mauritius’ Cuttaree, 63, has most recently gained notoriety for joining last year’s crusade to reconsider the Jan. 1 phaseout of apparel and textile quotas. He is a strong advocate of poorer nations and has suggested their influence in the WTO needs to strengthen.

“It’s time for developing countries to think they share the ownership of this organization,” he said.

He acknowledged that the end of quotas will pose “a problem” for many developing countries that had relied heavily on textile and apparel exports.

The solution to this problem, he said, “will come through better funding,” adding that it would be key to get the World Bank and other rich countries involved.

Brazil’s WTO ambassador, Correa, 59, made a name for himself by coordinating the efforts of the G20 group, an alliance of developing nations that includes China, India and South Africa. That alliance has turned into a powerful and coordinated voice at the WTO for the developing world.

“It is hard to accept that, having control of the Bretton Woods institutions [the World Bank and International Monetary Fund], developed countries should also be at the helm of the WTO,” he said.