Bridges Weekly Trade News Digest • Volume 9 • Number 2 • 26th January 2005

DG Candidates Meet With General Council

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The race to replace Supachai Panitchpakdi as Director-General (DG) of the WTO officially got underway on 26 January, as the four candidates went before a formal meeting of the WTO General Council to promote their respective cases for the job.

Former Uruguayan WTO Ambassador Carlos Perez del Castillo; Mauritian Foreign Affairs and Trade Minister Jaya Krishna Cuttaree; Brazilian WTO Ambassador Luiz Felipe de Seixas Correa; and former European Trade Commissioner Pascal Lamy of France each made fifteen-minute presentations to the General Council, followed by an hour of questions and answers with Member delegations and a thirty-minute press conference.

In stark contrast to the more commonly heard refrain that "the WTO is not a development organisation," the need to make trade more supportive of development was the foremost theme in every candidate’s introductory speech. All of them declared that their highest priority as DG would be the swift, successful conclusion of the ongoing Doha Round of trade negotiations.

Perez del Castillo: touts skills as consensus-builder, experience as GC Chair

Perez del Castillo put himself forward as the "consensus candidate that the WTO needs," pointing to his involvement in the Doha Round from its very beginning and his experience, as General Council Chair, with helping Members "search for common ground and understanding."

He emphasised the need to expand the WTO’s membership and to ensure that the multilateral trading system (MTS) offers all of its Members "concrete opportunities for trade and development," saying that one of the organisation’s most important responsibilities is to "give a concrete meaning to the development dimension beyond special and differential treatment." Perez del Castillo also stressed that the WTO must "confront the growing fragmentation… of the MTS" resulting from the preferential trade agreements that are undermining the WTO’s fundamental principle of non-discrimination.

The former WTO envoy for Uruguay said that his first priority as DG would be to finish the Doha Round by 2006 in a way that is "worthy of being called ‘the development round.’" Other priorities would be to promote increased coherence with other international organisations, including joint action with the World Bank (WB) and International Monetary Fund (IMF).

Cuttaree: ‘the right mix’

The Mauritian foreign affairs and trade minister — whose candidacy has already been endorsed by the group of African, Caribbean, and Pacific countries that comprise 79 of the WTO’s 148 Members — insisted that if WTO negotiations fail to take into account the interests of all of its members, their very legitimacy will be undermined. He portrayed himself as a bridge-builder between rich and poor countries, whose overarching priority as DG would be to successfully complete the Doha Round.

Cuttaree said that the benefits of trade liberalisation had not been evenly distributed, and that developmental concerns must be "duly entrenched in the system as a whole." He also talked about the need to bridge the differences on major issues because of the diversity of interests in the MTS, and emphasised that WTO decision-making had to be made more transparent and inclusive. Cuttaree defended regional trade agreements, arguing that "effective regional integration is a stepping-stone to the MTS," and argued that the goal of global policy-making should be to ensure the "right mix between providing a multilateral framework of rules for free trade on the one hand and assisting countries to mainstream into the MTS on the other."

Seixas Correa: "mainstream the development dimension"

The Brazilian Ambassador said that the successful conclusion of the Doha Round would require Members to "mainstream the development dimension into the WTO to the benefit of all developing countries," with specific provisions to help least-developed countries (LDCs) and vulnerable economies "enhance their national structures for development." He said that the next DG must be particularly careful when working in his capacity as Chair of the Trade Negotiations Committee to ensure the participation of all delegations in negotiations and technical work. He also stressed that the WTO must remain a Member-driven, consensus-oriented organisation, unlike the WB and the IMF.

Seixas Correa said that the MTS must also provide "an overarching normative structure, capable of effectively harmonising the growing number of trade agreements…being concluded throughout the world" if it is to retain its pre-eminence.

Lamy: "re-balance the international trade system in favour of developing countries"

Lamy, too, reiterated that the MTS must retain its primacy in international trade. He reminded the General Council of his role as "one of the authors" of the ‘Doha Development Agenda,’ and said that leading the Round towards fruition is "our priority number one, our priority number two, our priority number three." He noted that while trade liberalisation in and of itself is not enough to promote development, it is a ‘necessary condition’ for it, if accompanied by a rules-based system and appropriate national-level policies — a view he termed the ‘Geneva consensus.’ He stressed the need to ‘re-balance’ the MTS in favour of poor countries.

Lamy said that the WTO needs to improve its coherence with the Bretton Woods institutions as well as "better integrate its work in the landscape of actors, states, and international governance organisations which are working for development."

Like Seixas Correa, the Frenchman agreed that the WTO must remain Member-driven and consensus-based, and said that major institutional reforms were not necessary in spite of his past characterisation of the institution as ‘medieval.’ In another comment that may have been intended to distance himself from his controversial record at the WTO, he declared that during his career, he had always "respected his authorising environment."

GC Chair will consult Members in effort to establish consensus

A General Council meeting has been set for 26-27 May to formally approve Supachai’s successor. According to the rules for the DG selection process (WT/L/509), the months before this date will see the new Chair of the General Council — likely to be Kenyan WTO Ambassador Amina Mohamed — repeatedly consult all Member delegations with the ultimate aim of identifying a candidate on whom Members can reach consensus. The most unpopular candidate after each round of consultations is expected to withdraw.

The nightmare scenario for many trade diplomats is a repeat of the rancorous DG race of 1999. Members’ inability to reach consensus on a single candidate paralysed the work of the WTO for months and contributed to the collapse of the Seattle Ministerial Conference later that year. This year’s leadership race may also prove divisive. Seixas Correa explicitly told the General Council that he believed that the next DG of the WTO should come from a developing country, since people from developed countries are already in charge of the WB and the IMF and the current round is supposed to be a ‘development round.’ Cuttaree revealed similar sentiments during a press conference following the meeting. This view is said to be shared by many developing countries.

Rumours abound

Trade sources indicate that that Lamy and Perez del Castillo are the frontrunners in the race at this early juncture, but cautions that this could change dramatically after the elimination of one candidate. The Johannesburg daily Business Day has suggested that a stalemate among Members may open the way for the emergence of a ‘white knight,’ noting that the Financial Times recently called Alec Erwin, South Africa’s public enterprises minister, the best man for the job.

Supachai’s successor’s four-year term will start on 1 September.

The candidates’ statements and biographies are available at http://www.wto.org/english/thewto_e/dg_e/dg_selection_process_e.htm

Sources:

ICTSD reporting. "Director-General Candidates for Top WTO Job Make Case To Win Member Representatives’ Support," WTO REPORTER, 27 January 2005; "Race for leadership of WTO heats up," FT.com, 26 January 2005; "Four in Line for Top WTO Post, But Who Will Get SA’s Vote?", BUSINESS DAY, 25 January 2005; "Four trade diplomats battle to win top job at WTO," AGENCE FRANCE PRESSE, 26 January 2005; "In race for WTO Chief, a Frenchman faces off against 3 from developing nations," INTERNATIONAL HERALD TRIBUNE, 27 JANUARY 2005.