Global Trends by Martin Khor

Monday 31 January 2005

Race for WTO top job hots up

With the term of the present WTO Director General, Supachai Panitchpakdi, ending in August, four aspirants to succeed him presented themselves to the WTO last week.

It will be an interesting contest, as was revealed at a meeting the candidates also held with non-governmental organizations.

Last week saw the official launch of campaigning for the job of the next Director General of the World Trade Organisation.  A special meeting was held at the WTO for the aspirants to present what they stand for and answer questions from the members.  

The term of the present DG, Supachai Panitchpakdi, the former Thai deputy premier, will end in August.    There are four candidates vying to succeed him:  former European Trade Commissioner Pascal Lamy, the Mauritius Trade Minister  Jaya Krishna Cuttaree,  Brazil’s WTO Ambassador Luiz Felipe de Seixas Correa and the former Uruguay Ambassador to WTO, Carlos Perez del Castillo.

“All good candidates, and hard to choose between them”, is what one often hears, when the topic comes up.  Behind the scenes, a lot of lobbying is going on.

At the World Bank and International Monetary Fund, it is a forgone conclusion that the chief officer is basically chosen by the United States (which has traditionally held the Bank job) and Europe (which fills the IMF post).

The DG of WTO or GATT (the WTO’s predecessor agency) also used to be from the developed countries.  But this tradition was broken when Supachai’s candidacy was announced in 1999 and he fought a bruising and divisive battle with Mike Moore from New Zealand.

Many observers believe Supachai would have won if there was a vote, and indeed the Asean countries, led by Malaysia at that time, insisted that a vote be taken.   But in the WTO’s decision-by-consensus practice, there were endless consultations instead of an election, and in the end a compromise was struck – Moore would serve for three years, followed by Supachai for the next three years.

One result is that a person from the developing countries is now occupying the top WTO job.  And  three of the four persons vying for the post are from the developing world..  

This time around, the WTO hopes to avoid another divisive battle. Last Wednesday’s WTO meeting with the candidates was an interesting getting-to-know-you exercise.  

Even more unprecedented was a meet-the-NGOs meeting that same night, when three candidates accepted an invitation to a “public hearing”. The fourth candidate, Castillo, though invited did not come. 

The NGOs put five questions to the candidates, and each responded in the five rounds of the debate.  They gave interesting answers, with contrasting styles. 

Lamy, the experienced and famous politician, gave a suave performance, trying to overcome his reputation as the former aggressive European chief trade policy maker with the impression that he would be sympathetic to developing countries and civil society in the new hat of DG of WTO.

Cuttaree came across as a Trade Minister steeped in the fight of smaller developing countries for a better deal in the imbalanced trade system.  And Correa was the polished and committed diplomat, staking the case that with a DG with experience from the developing world, the WTO could hold the developed countries to their promise to phase out subsidies and open their markets, while also  bringing the development dimension into the system.     

The NGOs wanted to know whether the candidates would redress the WTO’s untransparent decision-making process.

Lamy admitted he had himself criticized the WTO for not being transparent (actually, he had called its processes “medieval”) but said it had since improved, and he was in favour of more transparency.

Cuttaree agreed there was a perception the organization is not transparent, and the antagonism in the Seattle and Cancun Ministerial meetings reflects a problem with transparency and a divide between civil society and the WTO is bad. Unless we bring in more transparency in the WTO, its future will be jeopardized, he added.

Correa said transparency has two aspects, internal (within the organization) and external (the WTO’s relations with the outside world).  The WTO has problems in both.  There is an issue of inclusiveness and participation by delegations in the negotiations, which could be tackled by  

good chairmanship and inventive ways to make people participate.  He was also committed to improving the WTO’s relations with NGOs. 

How would the candidates deal with the WTO’s next Ministerial conference, in Hong Kong in December, given the poor record of past meetings?  Would they try to secure an agreement at any cost?

Correa said the DG’s role is to get agreement within the mandate when the present Doha talks were launched, and not to seek agreement at any cost.  To be legitimate, an agreement should be based on development concerns, that redress the imbalanced rules.

Lamy said as the DG’s role is limited, he cannot push things over the members. If poor countries don’t want to agree, they will pull the rug as they did in Cancun. Also, the WTO’s future does not hang on the success of the next Ministerial.  The WTO has survived failed Ministerials.

Cuttaree said something special happened to the WTO at Cancun.  “I have never seen so much heat generated and division among the groups, especially between the industrialized and developing countries.”

He said the group of 90 (developing countries) wanted the meeting to resolve issues important to them, such as cotton and agriculture, but were instead asked to agree to negotiate new issues such as investment and competition, which they were not prepared to do. And the Cancun failure was unfortunately blamed on the poor countries.  Since Cancun, the G90 has been accepted as an important grouping.

On agricultural liberalisation, the candidates were asked what they would say to farmers in developing countries who have seen their livelihoods destroyed by cheap agricultural imports.

Cuttaree said it is a mistake to think all developing countries can export more if trade is liberalized, as African countries do not have the capacity to export even if markets were more open.  On the other hand, he could see the poultry industry being killed by cheap imports in many parts of Africa.

Correa agreed that developing countries’ farmers are threatened by agricultural liberalisation as they are affected by imports coming from developed countries, for example diary products, corn and cotton.    The Doha talks are meant to deal with these threats. 

He stressed it is unfair to require developing countries to liberalise when the export and domestic subsidies are still in place in developed countries.  As a DG, he would tell the farmers in developing countries that they are right and that “we will help take care of that problem.”

Lamy said he would say to the farmers that the WTO has a mandate not to liberalise agriculture but only to more liberalization.  And there are sufficient ways to protect vulnerable farmers from import liberalisation, such as the concepts of sensitive and special products and a special safeguard mechanism.

How would the candidates work with NGOs if they were appointed DG? 

Lamy remarked he had in fact been accused of a weakness, that he is too much on the side of NGOs.  Cuttaree said that too many people look at NGOs as a nuisance, but that is to the credit of the NGOs as their concern is not to fight for sectarian interests but for the wider interests of the world.  “I would like to see this kind of relations with the NGOs in the WTO,” he added.

Correa said keeping in close touch with the NGOs is essential in today’s world.  He is constantly in touch with many NGOs on many issues and learnt a lot.  As chair of the tobacco convention negotiations at the World Health Organisation, he had massive interaction with the NGOs, who ensured his decisions as Chair were in the right direction.  “I’ll do that as DG and I hope you keep the pressure on.”