Tag Archives: WTO

Damaged WTO now leaderless as chief Azevedo steps down

By Emma Farge and Philip Blenkinsop

GENEVA/BRUSSELS (Reuters) – The World Trade Organization’s director-general Roberto Azevedo steps down on Monday, leaving the already-damaged global watchdog leaderless as it faces the biggest crisis in its 25-year history.

As the WTO’s influence seeps away, rising international tensions and protectionism during a COVID-induced slowdown, most obviously between China and President Donald Trump’s U.S. administration, make reform of global trade rules ever more urgent.

“This is indeed a new – though alas not unsurprising – low point for the WTO,” said Rohinton Medhora, president of the Center for International Governance Innovation. “The organization has been directionless for some time, several years in fact, and will now be functionally leaderless.”

In particular, the WTO appeals court, which rules on international trade disputes, has been paralyzed by Washington’s blockade on the appointment of new judges.

Azevedo, a Brazilian, is heading for a job at PepsiCo Inc and eight candidates are vying to replace him.

In 1999, a four-month gap leadership vacuum was widely seen as damaging, and guidelines to prevent a repeat envisaged the 164 members selecting a temporary replacement from among four current deputies. But Washington’s insistence on its candidate prevented agreement, leaving a vacuum that will last for months.

U.S. ELECTION

In theory, a winner should be selected by Nov. 7, under an agreed elimination process that seeks to have a new director-general appointed by consensus.

In practice, trade sources say the uncertainty around the presidential election on Nov. 3 in the United States, which has not said publicly which candidate it prefers, could delay matters further. The 2021 budget, due to be set at the end of the year, which Washington might question, could also be a hurdle.

The U.S. administration of President Donald Trump says the WTO, which took almost 20 years to broker its first global agreement, has failed for years to hold China – the world’s second largest economy after the United States – accountable for unfair trade practices. It also says the wider WTO tariff system is unfair to the U.S.

Trump has even suggested quitting the WTO, although no firm plans have been announced.

Peter Ungphakorn, a former WTO staff member who now writes blogs on trade, said there was a risk of a similar “messy selection” of the next full-time chief, citing trade tensions and members’ unwillingness to compromise over the acting director-general.

In theory, day-to-day operations can be handled by the deputies, including the director-general’s key role of selecting panelists to adjudicate on trade disputes.

Negotiations to reduce fishing subsidies in particular are supposed to conclude by the end of the year.

But David Tinline, a former adviser to Azevedo, noted that the red-tape-cutting Trade Facilitation Agreement had needed Azevedo’s interventions to get over the line in 2013.

“What we are not going to have is that galvanizing force of the DG (director-general), pushing people to solve specific problems,” Tinline said.

(Editing by Kevin Liffey)

Trump’s leadership is vital for world trading system

World Trade Organization Director-general Roberto Azevedo speaks at the annual meetings of the IMF and World Bank Group in Washington,

By Tom Miles

GENEVA (Reuters) – The head of the World Trade Organization said on Wednesday the United States continued to hold a pivotal role in global commerce, and he would support the administration of Donald Trump in ensuring trade was a positive force for job creation.

“U.S. leadership in the global economy and the multilateral trading system remains vital,” WTO Director General Roberto Azevedo tweeted, while congratulating Trump on his presidential election victory.

“It’s clear many feel trade isn’t working for them. We must address this and ensure trade delivers the widest benefit to the most people.”

Trump has described the Geneva-based trading club as a “disaster” and suggested he could pull the United States out of the WTO if the rules proved an obstacle to his plans to protect U.S. manufacturing.

He has promised to punish U.S. firms that move jobs to Mexico and slap a 45 percent tariff on Chinese imports to try to claw back a trade deficit with China that the U.S. government put at $367 billion in 2015.

Azevedo, whose leadership of the WTO gives him a role as a guardian of trade openness, has declined to criticize Trump’s remarks.

But Azevedo said in July that trade was “so obviously positive for every economy that it’s like trying to argue with a friend that he needs to breathe”.

In his tweeted reaction to Trump’s election, he said the WTO was “ready to support the administration to ensure trade is a positive element in a new strategy for development and job creation”.

His spokesman said Azevedo would not be commenting further on Wednesday.

(Reporting by Tom Miles; Editing by Hugh Lawson and John Stonestreet)