Success at MC9 has to be first priority, says new DG Azevedo

Acknowledging that “our negotiating arm is struggling”, WTO head Roberto Azevedo has stressed the importance of reaching a successfully negotiated outcome at the WTO’s Bali Ministerial Conference in December.

by Kanaga Raja

GENEVA: The new WTO Director-General Roberto Azevedo, at a special meeting of the WTO’s General Council on 9 September, stressed that his full priority will be to ensure that members achieve a successfully negotiated outcome at the ninth Ministerial Conference (MC9) in Bali this December.

Azevedo, who took office on 1 September, replaced Pascal Lamy who demitted office on 31 August. Azevedo also gave a press conference on the sidelines of the General Council meeting (see below).

In his first statement at the General Council as Director-General, Azevedo said that members are meeting at a crucial moment, with the global economy in a state of flux.

Many economies are still struggling to recover from the effects of the financial crisis. Meanwhile, others continue to emerge, forming new trading relationships and fundamentally shifting the landscape of the global economy. The challenges of development remain huge, he said.

In these challenging times, he believed that the role members play in the WTO is even more important, and that the multilateral trading system remains the best defence against protectionism and the strongest force for growth, recovery and development.

“Yet, as I take on this role, it is clear that the system is in trouble. Progress has stalled,” he said, pledging to do all he can to rebuild trust and faith in the organization and in the multilateral trading system.

Azevedo also stressed that he will be an inclusive Director-General working closely with everyone – from the Geneva representatives to ministers, from the secretariat to wider stakeholders, from the smallest to the largest delegations.

He further said that he will also have transparency as a fundamental yardstick in all areas of work, also in administrative matters.

“The perception is paralysis”

“Our negotiating arm is struggling,” he pointed out, adding that this is just one part of the work in the WTO. The WTO is about more than Doha. But increasingly the work on the negotiating front has come to define how the WTO is perceived by the world, he said.

“And the perception is that we have forgotten how to negotiate. The perception is ineffectiveness. The perception is paralysis,” he said, cautioning that the failure to address this paralysis casts a shadow well beyond the negotiating arm, over every other part of the work.

“It is essential that we breathe new life into negotiations. We must send a clear and unequivocal message to the world that the WTO can deliver multilateral trade deals. That’s why success at the Bali Ministerial Conference is vital – this has to be our first priority.”

“Success in Bali would bring huge benefits, improving people’s lives, including for the poorest amongst us, and boosting trade at a critical moment for the global economy ... But I will say this: while the benefits of success would be great, the consequences of failure would be even greater. It would strengthen current negative perceptions, setting us back in all areas of our work.”

He said that members’ ability to respond to the demands of an ever-changing world is under threat, and the future of the multilateral trading system is at stake. And if the system is not working, then, in the end, everybody loses. Those who lose the most would be the smallest and most vulnerable economies.

“We have a duty to deliver for them,” he said, adding that the world will not wait for the WTO indefinitely. It will move on, and it will move on with “choices that will not be as inclusive or efficient as the deals negotiated within these walls”.

The WTO has other priorities too, Azevedo noted. “We must continue to strengthen the implementation and monitoring functions of the WTO to maintain vigilance against protectionism. This is one of the most important aspects of our work.”

“Let me assure you, I understand the importance of all of the organization’s key functions and I will not lose sight of any of them. But today, we must focus on the here and now. We must look towards delivering on our first priority: Bali,” he said.

“Success in Bali will be a boost to everything we do, allowing us to make progress across the board. A successful 9th Ministerial Conference will give us back our confidence that we are on the right track.”

A way forward

The Director-General however said that Bali is not the end of the road, and that delivering on Doha has to be part of any future agenda. “We need to discuss some of the contentious issues that have divided us for so long. We must look with fresh eyes at possible options.”

He said that he had ideas about “how we can do this – but before we discuss the wider agenda we must restore trust among us and confidence that we can deliver agreements and build a viable path forward on Doha. We need to start this now.”

First, he said, he is going to be transparent, open and inclusive. He added that he will be a hands-on Director-General and that he will roll up his sleeves and will be by members’ side at the table. Between now and Bali, he said, he will be away from Geneva only when strictly necessary.

“My full priority will be to ensure that we achieve a successfully negotiated outcome in our 9th Ministerial.”

Second, Mr Azevedo said that he wants to set out a clear process to deliver success in Bali. “Time is short. Our work must start here and now. That’s why I will be commencing intensive consultations with members immediately, starting this week...”

This will be in a variety of formats and configurations at ambassadorial level, and the focus will be on the three key elements of trade facilitation, development and some elements of agriculture, he said. He added that his intention is to have “a rolling set of meetings”, giving the opportunity for everyone’s voice to be heard across all these issues.

He stressed the need to bring the three Bali elements together now. “They must move simultaneously in our so-called horizontal process. We need to tackle the difficult issues to identify, early in the process, where the possible trade-offs may lie. And we must constantly be reviewing progress.”

Noting that many of the big issues that divide members are political, he said that as time is limited, he also wants to start getting capitals more involved in order to overcome impasses, narrow gaps and  move  members  closer towards an agreement. Senior officials must be ready to come to Geneva at certain junctures over the next few weeks, he added.

The development component will be vital in this process, he stressed, adding that he will be listening closely to the developing and the least developed countries to make sure that their interests are taken into account.

There are just 84 days until the Ministerial Conference, he pointed out, underlining that all aspects of this work must start to deliver results quickly, and that flexibility will be key.

“We should always remember what the consequences of failure would be. It would set us back in all areas of our work, undermining the WTO, and compounding the sense that we can’t negotiate.”

Some capitals are already looking elsewhere towards other solutions which won’t be multilateral – second-best solutions which leave many of the big challenges unaddressed.

“That’s not in the interests of all of us here and it’s not in the interests of the world. We must be committed to deliver a deal before we get on the plane to Bali. It is vital that we succeed,” he said, adding that the intermission is over and that it’s time the WTO was back at the centre of the world stage.

Success and failure

Asked at a press conference later as to what he would consider a success, and a failure, at Bali, Azevedo said that the success is “if we can reach negotiated outcomes of a multilateral format.”

The WTO since 1995 has not delivered any single negotiated outcome of a multilateral nature, he said, adding, “I think it’s time we do that.”

Azevedo stressed that the balance, the ambition and the gains that will be perceived will depend a lot on the deal itself and what was possible for members to negotiate. As far as he is concerned, any multilateral deal is a good deal because if it is multilateral, it is acceptable and deemed to be a good thing for all members.

For him, a failure today would be no negotiated outcomes. “I think that’s essentially what I would see as a failure, but failure sometimes teaches things, so I’m looking for positive outcomes. That’s what I hope will happen in Bali and I realistically believe it’s possible.”

Responding to another question, Azevedo said that his first, second, third and fourth priority is the WTO. “Whatever is good for the WTO is what I will be seeking. The Doha Round is clearly a very important part of what we do. The WTO has come to be defined by whatever happens to the Doha Round.”

“I have been saying over and over again that the WTO is much bigger than Doha. We have many other pillars of work here which are important and which affect the lives of people and the way that businesses operate every single day. But in public perceptions [and] eyes, what defines the WTO today is whatever happens in Doha,” he said.

“So I will be looking at Doha very closely. It will be our priority. Part of Doha is Bali, so Bali is not a non-Doha negotiation. It is actually Doha negotiations, only not the whole single undertaking. That is something that we had agreed at MC8, the previous Ministerial Conference,” he added.

“So, let’s do things one step at a time. The first step is try to conclude negotiated outcomes in Bali, which is Doha also, and then let’s see what kind of roadmap we can agree on that will take us to a process which will be after Bali but also have a very important element on the Doha Round.”

The Director-General also announced that the original forecast made in April this year of 3.3% growth in global trade for 2013 has been revised downwards to 2.5%, and that for 2014, global trade growth has been revised downwards from 5% to 4.5%. (SUNS7650)

Third World Economics, Issue No. 553, 16-30 Sept 2013, pp 8-10