Frenchman Set to Assume WTO Leadership

Pascal Lamy, who until recently was the European Union's chief trade negotiator, was set to become director-general of the World Trade Organization after his last remaining rival withdrew from the race yesterday.

WTO officials announced that based on several months of consultations, Lamy, a 58-year-old Frenchman, is the candidate "most likely . . . to attract consensus" among the 148 member countries. The defeated candidates all came from developing countries -- Uruguay, Mauritius and Brazil. Barring some unforeseen revolt before the WTO general council's formal decision in two weeks, Lamy's four-year term will begin Sept. 1.

The choice capped a relatively smooth selection process that removes one impediment to global trade negotiations, known as the Doha round, aimed at lowering barriers to international commerce and reducing farm subsidies. The last time the WTO chose a new chief, acrimony between advanced and developing countries was so fierce that the job had to be split between New Zealand's Mike Moore and Thailand's Supachai Panitchpakdi, with each taking abbreviated, three-year terms. That episode was blamed for helping to sour North-South relations and hindering progress on trade talks.

But Lamy still faces an enormous challenge in mobilizing the consensus-oriented WTO to complete the Doha round and ensuring that the negotiations produce major results. As head of the Geneva-based body, which sets the rules for trade among its members and mediates their disputes, he would also act as one of the chief advocates for economic globalization, a daunting task in itself. But his success or failure will almost certainly hinge on how he handles the Doha talks.

The round, launched in the capital of Qatar a couple of months after the Sept. 11, 2001, terrorist attacks, is supposed to provide especially significant benefits for developing countries, who were aggrieved that previous rounds tended to favor the interests of American and European companies. One demand of many developing countries is the elimination of, or at least a sharp cutback in, agricultural subsidies that often spur overproduction and depress prices for crops. Those demands are hotly resisted by powerful agricultural interests in rich countries, particularly in Lamy's native France.

Negotiators already have blown the round's original deadline of Jan. 1, and any director-general would face difficulties in getting the talks on track in time for a key meeting of trade ministers in Hong Kong in December, aimed at narrowing differences. One such gathering -- in Cancun, Mexico, in 2003 -- collapsed in failure.

Lamy has a particularly delicate tightrope walk to perform, some trade experts think. As director-general, he has little formal power beyond "moral suasion" in trying to forge consensus among the member nations. As an official who represented Europe's position on the main issues -- he stepped down as the E.U. trade commissioner in November after a five-year term -- he may enjoy both advantages and disadvantages.

"Some of the developing countries wanted a developing-country representative [to become director-general] above all, but some obviously thought that given his background, Lamy would have to bend over backwards to show that he isn't a protectionist Frenchman," said Jeffrey J. Schott, a scholar at the Institute for International Economics. "I think that was a big plus; there was a perception that if selected, he would be a strong leader."

But Daniel K. Tarullo, who served as the top international economic adviser for the White House during the Clinton administration, wondered how easily Lamy could deal with perceived conflicts between his previous positions and the more neutral ones he must take as director-general.

"How is he going to handle all these issues that just a few months ago he was an advocate on?" Tarullo asked, citing as examples the dispute between Washington and Brussels over subsidies for Boeing Co. and Airbus SAS. "I think he's best suited for the job, given his intelligence and knowledge of the issues. . . . But think what would have happened if he had been a lawyer in Washington for a company that had been involved in all these issues, then went in as U.S. trade representative. He can't recuse himself from everything the E.U. has an interest in. Is there some sort of understanding as to what he can do?"

Lamy was unavailable for comment, and a spokesman for U.S. Trade Representative Rob Portman also said he could not comment on that issue. But Portman issued a statement hailing Lamy's selection, saying: "As the former EU Trade Commissioner, he knows intimately the terrain of the negotiations. I believe he'll rise to the challenge of serving as the neutral leader" and pursuing the ambitious goals of the ongoing Doha trade round.

Lamy's selection became a foregone conclusion when Carlos Perez del Castillo, a Uruguayan diplomat, acknowledged yesterday that the Frenchman had stronger backing. Previously, Luiz Felipe de Seixas de Correa of Brazil and Jaya Krishna Cuttaree of Mauritius had pulled out of the contest after failing to muster enough support.