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GENEVA — The global commerce community is pinning its hopes on new World Trade Organization director-general Roberto Azevedo to break the stalemate in the troubled and dormant 12-year-old Doha Round of trade talks aimed at lowering barriers to the international flow in goods and services worth $22 trillion annually.
This story first appeared in the July 2, 2013 issue of WWD. Subscribe Today.
Azevedo, 55, a career diplomat and Brazil’s ambassador to the WTO since 2008, is slated to take the helm from incumbent Pascal Lamy on Sept. 1.
“The WTO is in a very critical stage,” Azevedo said at a press conference in late May. “We have a trade agenda that we have to broaden and tackle. There are a large number of areas and issues that need to be evaluated, discussed, at the WTO. We’re not doing it, and that’s extremely worrisome, and we need to change this situation as quickly as we can. In my view, the way to do it is to ensure the negotiations move and move as soon as we can.”
Former U.S. Trade Representative Susan Schwab, who served in that post from 2006 to 2009, said, “I got to know Ambassador Azevedo during the Doha Round. I was very impressed with him. He’s an exceptional talent as a negotiator, and I think will be an excellent leader for the WTO.”
However, Schwab, who witnessed the collapse of Doha talks in 2006, 2007 and 2008 over differences between major advanced and emerging economies, said the job also has its limitations.
“The leadership of the WTO is critically important, but the director-general alone is not going to be able to be successful if the members don’t want the organization to succeed,” said Schwab, now a strategic adviser at Mayer Brown LLP in Washington.
Diplomats and experts described Azevedo as a dealmaker, respected for his integrity and nondogmatic approach. Luzius Wasescha, a former Swiss ambassador to the WTO, said Azevedo’s most urgent objective “is to get the trust from all on the different sensitivities.”
The new chief will have to deal with the rapid power shifts in the global economy that have eroded the world trade order dominated for decades by Europe and the U.S., as emerging powers Brazil, China and India challenged the status quo, and try to come up with a new balance between established and emerging economic powers.
“The WTO has played a significant role since the crisis emerged in 2008, protectionist trends emerged…and that risk, those trends, are still there and we need to fight them,” Azevedo said. “They’re threatening to all countries, in particular to the poorest and smallest, and the most vulnerable ones, and we are, in my view, on the verge of losing a very valuable system, the system that we all fought for, and we struggled to create and to advance.”
The immediate challenge for Azevedo is to prepare for the December WTO trade summit in Bali, Indonesia, that is seeking to secure an accord on trade facilitation and agriculture issues.
A package at Bali “could clearly reinvigorate enthusiasm for the WTO and getting multilateral deals done,” said Schwab.
Romain Benicchio, policy adviser at advocacy group Oxfam International, said, “The new head of the WTO made it clear in the run-up to his election that we cannot throw away the development agenda, and leave the poorest and most vulnerable behind.” Benicchio said as long as the U.S. and the European Union do not show leadership on farm reform, “it is hard to imagine how…[he] could revive the Doha Round.”
Michael Punke, deputy USTR said, “It’s very difficult to imagine Doha succeeding if Bali fails. I think there will either be success and we’ll move along to the rest of the Doha agenda, or it will be something more drastic.”
If Bali tanks, some diplomats fear the U.S. and EU might shift their energies to bilateral and regional trade initiatives where they see real market-opening prospects, such as the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership. Schwab feels if Doha is reenergized, the global talks and initiatives like TPP and Transatlantic can be done in parallel.
Senior trade diplomats said lowering tariffs on industrial goods might require new approaches by major players.
“The elephant in the porcelain shop is China,” said Wasescha. “All the developing countries are taking a very conservative stance with regard to tariff lowering, not because of Europe, not because of Japan, not because of the U.S., but because of China — because the Chinese are more competitive than others. You need a package which brings advantages to all members and not just a few. The model of a deal among the big ones will not work.”