The World Trade Organization goes rudderless later this month when lifelong Brazilian diplomat Roberto Azevedo retires early. Unable to find one, the WTO has decided to pick four.
A new leader needs to take the helm in September and while it looks like someone from Africa will take over the beleaguered one thing is certain and — boy, is it a shocker: the 164 member organization cannot agree on what to do in the interim before Azevedo’s replacement’s been found.
The most recent General Council meeting was suspended because of two items related to the director-general selection process. WTO members then decided to just extend the terms of the four deputy director generals and make them all the interim leader.
General Council chair and New Zealand WTO Ambassador David Walker was reportedly “disappointed” that members could not come to a consensus on how to proceed with an interim director general, WTO spokesman Keith Rockwell told Inside U.S. Trade, a subscription based news service about international commerce and trade police.
Inside U.S. Trade had previously reported that the U.S. wanted Alan Wolff to serve as an interim director. But China and it’s best friend in the Western world, the European Union, opposed Wolff. They wanted Karl Brauner of Germany. Life Wolff, Brauner is already a deputy director general and has been since 2013. Wolff has been there since 2017 and is a firm believer in the WTO and not part of the Trump Administration hawks that would like to leave it.
His rejection has more to do with where he is from than where he stands. The same holds for China’s director general Yi Xiaozhun. Yi’s odds of being picked by the U.S. are as good as Wolff’s being picked by the Chinese.
So instead of naming an interim leader, the members will look to the four deputy directors to carry on their duties plus Azevedo’s.
The WTO began in the 1990s, at a time when globalization was gaining system. It was the end of history, recall. The world was going to be one big free market, or close to it. The WTO would be there to referee the trade rules and get everyone on the same page. It was a time when bureacrats and corporations were riding high; the sky was the limit.
It didn’t last.
By the turn of the century, people had turned on the WTO as benefiting mostly rich countries and big multinationals. That was the perception, at least. The organization, once seen as something as understood as the Bilderberg Group, become more transparent. They wanted to be seen as the good guys, helping poor countries join the developed ones. By and large, it worked. But it was mainly thanks to China, which didn’t have the same rules as the U.S. and Europe when it joined in 2001. Corporations, especially from the U.S., offshored manufacturing there. China went from a dollar a day makers of Happy Meal toys to where they are now: bullet trains, beautiful city skyscrapers, a Disney resort, and the largest economy in the world based on purchasing power parity. It’s No. 2 in overall economic output, still far behind the U.S.
China’s rise led to the rise of poorer nations nearby and other resource rich nations that grew by selling them iron ore and soybeans, chicken and airplanes (Brazil’s Embraer was a China winner).
Beyond that, the WTO got little done and even Azevedo admitted as much in his farewell speech two weeks ago.
The WTO negotiation function has been broken since Doha. Azevedo said that “despite intense efforts, including daily meetings and consultations with permanent representatives, it became apparent that positions in many areas were further apart than ever, with gaps widening instead of closing.”
His exit was a stark warning to the WTO members and to the world if it cannot agree on the rules of international trade.
“Only way we can save trade multilateralism,” he said. “In this Brave New World of ours, predictable and updated rules are of enormous value. They will be pursued, believe me. If not in the WTO, then in other less representative forums. And if governments are unwilling or unable to define the rules of the game, then these rules will be set by private parties — even less representative, and even less likely to deliver gains for everyone.”