Global Elections: the race to be the next leader of the WTO

After 8 years in office, Pascal Lamy, the long-standing, cool-headed leader of the World Trade Organization will step down. Lamy (France, and former EC Commissioner for Trade) was the fifth Director-General of the WTO. Past leaders included Supachai Panitchpakdi (2002-2005, Thailand), Mike Moore (1999-2002, New Zealand), Renato Ruggiero (1995-1999, Italy) and Peter Sutherland (1993-1995, Ireland, also the last leader of the GATT). (WTO)

Lamy has presided over the WTO during some difficult times. Most notably, he has repeatedly tried–and failed–to revive the Doha round of trade talks. This has not been his fault, the D-G has limited power to impact members’ behaviors. And one could say that he has succeeded in fending off the complete death of the negotiations. However, one can wonder whether a fresh face might help revive talks.

Who is running for office?

According to Reuters, we only have two names at the moment (Reuters). Formal nominations will be made in December

The African Candidate
It is common for regional blocks to put forward their own candidates and the African Union may have the clearers mechanisms for doing this. Several potential African candidates have been mentioned. Nigeria’s Finance Minister, Ngozi Okonjo-Iweala, who also was an important candidate for the World Bank’s top job earlier this year, has reportedly expressed no interest in running for the WTO position (PeaceFMOnline). Nigeria’s current trade minister, Olusegun Aganga, has also been mentioned. Another possibility that has been mentioned is South Africa Trade Minister Rob Davies (Reuters). But apparently the AU has decided it will be none of the above. There are a number of reports stating that the African Union has decided that Ghana’s former trade minister, Alan Kyremanten, should hold the post (Ghana Joy Online; AfricaNews.com). Kyerematen currently is the trade advisor at the UN Economic Commission for Africa and head of the African Trade Policy Centre. (thisafrica.com). As Reuters reports, this was a contentious decision. However, if he can get all of Africa’s WTO members to back him, then that would be (a) the first time all of them supported the same candidate and (b) a significant portion of the WTO’s membership, which could go a long way towards getting him elected to the job.

New Zealand Again?
Another likely candidate is New Zealand’s trade minister Tim Groser. However, it has barely been a decade since someone from New Zealand held the post, making his chances unlikely (The New Zealand Herald).

Other possibilities
Reuters mentions a number of possible candidate from Mexico and Costa Rica, with some broader speculation about Brazil’s Ambassador to the WTO, Roberto Azevedo, as a possible Latin American choice.

Bottom Line
It is still way too early to tell what will happen in this competition for the WTO’s top job. But it is clear that the game is afoot.

Africa Notes: WTO Roundup

The WTO and Sustainable Development
Lesotho Ambassador Mothae Maruping is the current chair of the WTO’s Committee on Trade and Development. ICTSD has a nice report of their recent meeting and its focus on sustainable development. One thought is how to integrate the WTO’s Aid for Trade program with the goal of developing a green economy. Nevertheless, it is clear that some developing countries may also see the WTO as a shield from any radical green agenda that might try to restrict their ability to trade. The delegate from Benin:

Benin said that the WTO should facilitate the elimination of distorting trade practices related to environment that are “incompatible with sustainable development”. “It is important to avoid creating new trade barriers, imposing new conditions to aid, and deepening the technological gap between developed countries and developing countries

The WTO and Regional Integration within Africa
Peter Draper has a nice discussion of the relevance of WTO rules for regional integration efforts in Africa (ICTSD). He anchors his discussion with consideration of the proposed tripartite preferential trade agreement (T-PTA) between SADC, COMESA, and the EAC (basically uniting southern and eastern Africa). He points to a WTO report which singles some of the issues in maintaining coherence between WTO rules and the rules of these new trade arrangements. His overall conclusion seems to be that the negotiating parties strive to maintain coherence with WTO rules and perhaps even allow the WTO’s help with a “mulilateralizing regionalism” component.

Doha Round
Trying to Move Forward
The BRICS would like to remind us that Doha is not yet dead (MN). Both at their own summit last month and at a G-20 meeting in Mexico, they made this point. The WTO’s Director-General Pascal Lamy continues to try to breathe new life into the round. His most recent innovation is the creation of a 12-person panel of stakeholders which include corporate leaders, former heads of state, and leaders of various international institutions. Former President of Botswana, Festus Mogae is the sole African representative to the panel.

Positive DevelopmentsAgriculture
One of the major sticking points has been agriculture, especially for many African countries. The Doha Round began with a major campaign criticizing European and American farm subsidies and support for undermining agriculture in developing countries. Many of these subsidies continue, but there are some signs of change in Europe, at least. ICTSD reported this week that total EU farm support has dropped a bit and overall trade-distorting support has dropped even further:

Overall trade-distorting support – a category including amber, blue, and de minimis support – reportedly fell to €18.3 billion, a figure that is below the €22 billion cap that would be established under the draft Doha agriculture accord. (ICTSD)

Is Doha Dead?
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Monty Python: Not Dead Yet

ISA 2012: Presentation on Participation in IOs

Here is the abstract of the paper I am presenting tomorrow:

This paper addresses an understudied, but highly relevant research question: why do states participate in some international organizations more than others?  Playing an active role in all fields of global governance requires resources that only a few countries have.  Most countries have to pick and choose where they will expend their diplomatic energies.  While others have monitored state participation in individual international organizations (for instance, on the WTO: Michalapolous 1998; Blackhurst et al. 1999), such studies have primarily focused on understanding obstacles to participation rather than considering why states may choose to participate in some organizations rather than others. A number of factors could drive those choices, including: a state’s own financial resources, a rational estimation of a countries’ primary interests, trust in coalition partners to represent their interests, external financial support for participation, and institutional inertia provided by past participation. We measure participation at two levels: meeting attendance and meeting “voice” (the number of times states actively speak during meeting, analyzed by coding meeting minutes and reports). This is part of an on-going empirical study of state participation in global governance. For the purposes of this present paper, we focus primarily on three international organizations which overlap with a focus on food safety governance: the Codex Alimentarius Commission, the World Organization for Animal Health and the World Trade Organization. We also primarily focus on patterns of African state participation.

Special thanks to my research assistant, Ivan Stoitzev!

The WTO, Summer 2010

The World Trade Organization (WTO) has been central to my research agenda for a long time now. I am currently in the process of completing a book manuscript that examines African participation and influence in global economic governance. I begin with the assumption that they have to work through coalitions, and then proceed to consider how different institutional environments impact their ability to form and maintain such coalitions. I find that those institutional environments can vary in several important ways, including how specific international and regional institutions overlap. For instance, when institutional environments require rule-making to take place across multiple institutions (such as the case of trade-related food safety measures, where rules are made at the WTO, Codex-Alimentarius Commission and elsewhere), then the obstacles to forming and maintaining coalitions increase. And, indeed, we see African states have more difficulties in impacting rule-making in such environments.

Given the centrality of the WTO to most areas of economic governance, I pay close attention to on-going developments in that organization. This past summer, several stories grabbed my attention: the status of the on-going Doha Round of negotiations, Lamy’s attempts to invigorate that round with a “cocktail approach”, and the on-going struggle to reform trade-distorting US domestic cotton support. This post touches on those themes and several others.

Doha Round Status

The Doha Round is not dead, though reports of its demise recur on a regular basis. One needs to remember that multilateral trade negotiating rounds have always taken a long time to conclude (last time, the Uruguay Round began in 1986 and only officially concluded in 1994). Additionally, there are now many more member states and economic power is more diffuse than it was during past rounds. So it should be no surprise that there have been a number of obstacles to concluding the current round of negotiations. Indeed, towards the beginning of the summer, attempts to conclude the Doha Round seemed to take another blow, as the G8 abandoned a pledge to conclude trade negotiations this year. However, some also cautiously report on continued progress, including sources in India (for instance, The Economic Times).

Director-General Pascal Lamy’s recent report to the WTO General Council tries to frame the WTO’s Doha Round and “Aid for Trade” as important contributions to the UN’s Millennium Development Goals. However, his main strategy for keeping Doha alive seems to be linked to beverages…

“Shaken, Not Stirred.” Cocktail Approaches to Negotiations

My attention has been captured lately by Director-General Pascal Lamy’s new strategy in multilateral negotiations: the cocktail approach. He seems very excited about it. There are three core ingredients to this cocktail: (1) Chair-led consultations, (2) informal bilateral discussions, and (3) consultations with Lamy. He speaks of these dynamics as occurring both horizontally and vertically. The idea, apparently, is that these ingredients are already here, and that what is needed is for us to shake them vigorously (perhaps Lamy has an affinity for Bond, since he says that simply stirring this favorite cocktail of his is not enough).

Generally speaking, his method would involve:“Chair-led processes within the Negotiating Groups, maintaining an overview of the entire negotiating landscape (transparency and inclusiveness), and smaller groups in variable geometry and bilateral contacts remain necessary and essential –moving towards a more horizontal view of the issues (negotiating groups and the TNC remaining the anchor of the negotiating process).”

This is not the first time a cocktail approach has been used to encourage progress in WTO negotiations. The idea goes back at least to Tim Josling and Allan Rae who describe its application to agriculture negotiations back in 1999. The idea, they suggested,was to take current tariff levels and treat each level with a different modality. For instance, states could eliminate tariffs where current levels are below 5%, but for tarriffs that are extremely high (say, 300%) states may agree to simply allow space for bargaining. In their analysis applying the “cocktail” approach did have some benefit for African states. Their approach was embraced by a number of negotiators in the early phases of the Doha Round and continues to be mentioned today.

Looking at the broader negotiation literature, cocktails have had other metaphorical use. Cocktail can refer to a hybrid approach in negotiating tactics by individual actors intent on pushing or securing an advantage (see Matos et al. 1998).

Cotton

I am also asked, when I speak about the role African states play on the cotton issue, whether they are merely following another state’s lead (Brazil). I always say that this might be the case with dispute settlement, where African states have only acted as third-party supporters of Brazil’s activities. However, African states have clearly been leading players in using cotton as an issue to press for greater advantage in negotiations on agriculture in the Doha Round. If Brazil’s strategy has been to use judicial processes, African states have tried to push for a legislated solution.

This summer it became even clearer that Brazil stands alone on the cotton issue. It seems to have forgotten the rhetoric of how the “South”, including Africa, is hurt by wrong-headed agricultural policies in the industrialized “North”. Indeed, Brazil’s cotton farmers now apparently are being paid US subsidies. In return for not applying WTO-authorised trade sanctions, Brazil has decided to accept payment from the US to its farmers. As the Financial Times notes, this just makes them new stakeholders in the US Farm Bill. This is too bad, as Brazilian sanctions, while generating a number of negative externalities for Brazilian consumers and American exporters, could also have generated positive externalities for Africa’s more needy cotton farmers.

The WTO is not just the Doha Round

While the apparent lack of progress in the Doha Round might seem to signal a lack of commitment by the international community to this organization, it is far from being the case that the WTO’s relevance relies only on that round.

For one thing, the WTO administers a number of international agreements. One of those, which member states do not have to sign, is the Government Procurement Agreement. This agreement tries to encourage transparency and the principle of non-discrimination in government procurement. Signing the agreement ensures formal access to government procurement contracts in other signatory countries. The United States is one of 40 such countries. So, as the Financial Times reported, it is not surprising that China is actively trying to negotiate access to the agreement. Accession requires the consent of the current parties (Article XXIV, 2).

Indeed, the WTO has played a central role in economic disputes between the US and China in recent years. See, for instance, recent US concerns about China’s garments and textiles.

The WTO also plays a central role in many economic disputes between Europe and the United States. Two of those disputes, one about European subsidies for Airbus andanother about tariffs on certain electronic products, both resulted in WTO panel decisions that favored the US, though Europe is appealing at least the Airbus decision.

My colleague, Peter Rutland, has a nice piece in the Financial Times about Russia’s bid to enter the WTO. It is, as he notes, “embarrassing” that Russia is the only major economy not included in the 153-member organization. He notes many of the important obstacles to that bid: some member countries (Georgia) don’t like Russia very much these days, Russian leaders don’t always seem particularly committed to the process, and the United States has raised a number of objections along the way. Rutland’s piece is partly a reminder that some of these and other challenges remain, even as US President Obama announced last month a joint commitment with Russia to see the bid through. I think that much of this analysis is right, but I would add one more obstacle to Russia’s bid: the on-going Doha Round. If Russia were to join, it would also have a major voice in the on-going negotiations (especially if they continue to drag out). Russia is a big enough player that it could upset many of the deals and alliances that have been made over the last decade. That could be both good and bad for progress in the negotiations. But is is unlikely that it would be neutral.