NOT LONG AGO the World Trade Organization seemed leaderless and toothless. Its member nations were unable to agree upon a new boss, and the European Union was thumbing its nose at a WTO ruling against its banana protectionism. Now, mercifully, the WTO's members have resolved the succession issue, and the EU is less defiant. Last week the WTO punished Europe's ban on hormone-treated beef by authorizing America to slap $117 million worth of punitive tariffs on EU exports. The EU's farm commissioner said meekly, "I do not dispute the right of the U.S. to seek these measures."
This represents a certain advance. To resolve the succession question, members agreed to split the director general's six-year term to give both leading candidates -- New Zealand's Mike Moore and Thailand's Supachai Panitchpakdi -- a turn at the helm. That compromise may bring peace at the price of leadership. A new round of trade-liberalizing talks is due to be launched in Seattle in November. If the talks are to succeed in the teeth of protectionist pressure, firm leadership will have to come from somewhere.
Equally, Europe's recent acceptance of punitive tariffs is only a half-victory. Before the creation of the WTO, the EU would no doubt have railed against America's supposed bullying and might even have responded with counter-sanctions of its own. But though the WTO forestalled a trade war, its solution is hardly perfect. The punitive tariffs will hurt European exporters and their American customers. It would be better if the WTO could resolve disputes by increasing trade rather than reducing it.
WTO defenders argue that half-victories are the best that can be had in a multilateral outfit. One of its strengths is that it is supported by developing countries as well as rich ones; to preserve this asset, it was thought necessary to give Mr. Supachai a turn as director general. Likewise, the WTO succeeds because it does not pose an intolerable threat to members' sovereignty; to remain unthreatening, it must perhaps allow Europe to ban beef hormones, though expert arbiters rule they are harmless. Well, maybe. But the WTO's new bosses need to remember their job is to fight protectionism, not just to keep their members happy.