Brazil has been criticized for battling a slowdown in its growth with protectionist trade policies, restrictions on capital flows and programs that favor local industry.
Can one of its diplomats now become the world’s free-trade champion?
World Trade Organization members announced in Geneva on Wednesday that they had chosen Brazil’s Roberto Azevedo to be the next director general, turning to a longtime trade diplomat from a prominent developing country to run an organization fighting to restore its clout.
The 12-year-old world trade talks known as the Doha Round are stalled, and top economic powers such as the United States and Europe have as an alternative struck out on their own in negotiations with different sets of nations. Some have warned that the WTO is losing significance as the global economy undergoes rapid change.
Azevedo says his insider’s knowledge of the organization and credibility in the developing world will help him resolve some of the long-standing disagreements over agriculture and open markets.
The WTO’s negotiating power “is clearly stuck,” Azevedo said at a news conference in Geneva on Wednesday, according to wire service reports.
Azevedo is known at the WTO for his ability to aggressively press Brazil’s agenda while remaining popular with the other representatives. At one point, he sought an investigation by the WTO into whether trade rules could be applied against a nation’s monetary policy — Brazil believes it has been disadvantaged by U.S. bond purchases and Chinese currency undervaluation — yet avoided alienating either of those major powers.
He was chosen from among nine candidates from around the globe in a competitive process unusual for agencies, such as the International Monetary Fund or World Bank, that dispense top jobs as geopolitical perks. According to a statement from the WTO’s selection committee, Azevedo was leading throughout several confidential straw polls taken in recent months to winnow the field. At the end, it was between him and Herminio Blanco of Mexico, a longtime negotiator with close ties to the United States from his work on the North American Free Trade Agreement.
The United States, at odds with Brazil over several of its trade practices, never publicly expressed a preference. Acting U.S. Trade Representative Demetrios Marantis said in a statement Wednesday that both were considered “strong leaders” and that the United States “was pleased to join the consensus decision” to select Azevedo.
In September, Azevedo will replace French diplomat Pascal Lamy, the long-serving WTO head who helped the agency move beyond the anti-globalization fervor of the 1990s and absorb China, Russia and other countries into its membership, but was unable to move the 159 member countries to a new trade agreement.
The WTO serves multiple roles in the global economy and has become a key forum for resolving trade disputes. With Azevedo as its representative, Brazil was particularly adept at using the body to argue against U.S. and European trade rules it thought were unfair — including winning a seminal dispute over cotton, for which the United States pays Brazil tens of millions of dollars a year so that Americans can keep price supports for their own farmers in place.
But the WTO is also supposed to advance a broad global trade agenda that liberalizes the flow of goods and services around the world while giving poorer or developing nations the ability to protect and grow local businesses and industries as they come up to world standards.
The Doha round’s problems largely revolve around tension over the degree to which large, rapidly growing nations such as China, India and Brazil should get the same treatment as other developing nations. The United States has insisted that these nations should open their markets more and compete with the developed world.
In a stark statement last month, U.S. WTO Ambassador Michael Punke said the inability to agree on even minor steps was bad news for the organization. The United States, Europe and others are pushing for a narrow agreement that would ease the movement of goods throughout the world and be signed by WTO ministers this fall in Indonesia. But the negotiations have been plagued by the same divisions that have stalled Doha.
If the session in Indonesia fails to show progress, “the signal that we will send, in a world full of fruitful trade negotiations, is that the WTO is the one place where trade negotiations don’t succeed,” Punke said. “The picture is grim.”