WITHIN a week, the decision on who should have hardest job in global trade—heading the World Trade Organisation (WTO)—will be made. The race has narrowed down to two Latin Americans, Herminio Blanco, a Mexican who negotiated the country’s entry into the North American Free Trade Agreement (NAFTA) in 1994, and Roberto Azevêdo, Brazul’s ambassador to the WTO in Geneva since 2008. Our story in this week’s print edition looks at how the attitudes of Mexico and Brazil towards trade liberalization reflect a rift that literally runs down the middle of Latin America. The two candidates spoke to The Economist at the end of April. Here is a summary of their views.
In answer to the question, who is better qualified for the job, Mr Blanco played up his NAFTA experience, as well as his role in the private sector as a trade consultant. Mr Azevêdo said his inside knowledge of the WTO gave him an edge. “I know what’s going on. I will be operational immediately.” Mr Azevêdo said knowing the structure and history of the organization made it easier to understand the impasse over the Doha round, and how to break it. But Mr Blanco argued the case for outsider status, noting that Peter Sutherland, an Irishman, was an outsider who deftly steered the conclusion of the Uruguay Round in 1993.
Both men spoke of the dangers of abandoning the Doha round, even though, according to a Financial Times story last month, senior American and European trade officials are expressing deep frustration with the process. According to Mr Blanco, there is much the WTO can incorporate from free-trading blocs currently under discussion, such as the America-led Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP) between America and the European Union. But without making good on the promises of the Doha round, developing countries will not come to the table. “Either we solve the Doha agenda or the future of the WTO will be highly compromised,” he says.
Mr Azevêdo says he is not particular attached to any round, but that the development agenda agreed in Doha in 2001 appears to be sacrosanct. “Unless you find a solution for what to do to the Doha Development Agenda, you are never going to move forward…you can’t leapfrog the round.”
Perhaps reflecting their countries of origin, both men appeared to have subtly different views on the significance of the proposed TTP and TTIP for the WTO. Mr Blanco, whose country is part of the TPP negotiations and is a huge trading partner with America, denied that the United States and Europe were trying to bypass the Doha round via the plurilateral partnerships: “The US is a responsible world player, and a founder of the GATT (General Agreement on Tariffs and Trade). It is not in the national interest of the United States to have a failing WTO.”
But he said it was very important for the WTO to learn from such partnerships, which are likely to be on the vanguard of trade liberalisation. Otherwise most developing countries would be left with lower-quality trade rules, and would thus be less attractive for investment, he said.
Mr Azevêdo, whose country is not likely to be a part of either bloc, said there was a danger that they would come to be seen as the “main engine” of global trade liberalisation, a role that he felt should be reserved for the multilateral trading system. He reckoned that such blocs may serve as a warning to developing countries that the multilateral system was at risk, which may goad some of them to be more flexible on the Doha round. But he also said that developed countries should realise that the most dynamic markets are in the developing world, which should encourage them to be flexible, too.
Though the governments of Mexico and Brazil are pulling out all the stops to get their candidates elected, both men have pledged to be independent if they win the job as director general. In response to a question about whether he would be influenced by Brazil’s protectionism leanings, Mr Azevêdo said just as legitimate a question would be whether Mr Blanco would be influenced by Washington, DC.
“At the end of the day there is a false discussion about me being Brazil and Herminio being Mexico. He won’t be pushing the NAFTA agenda and I won’t be pushing the Brazil agenda,“ he said.