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The WTO after Lamy

Whoever gets selected from a shortlist of five candidates will have to kick-start the Doha Round

T S Vishwanath 

T S Vishwanath

Two news reports that emanated from Geneva recently need attention. The first is about the contest for the post of director-general of the World Trade Organisation (WTO) where the number of aspirants has been trimmed to five from nine based on initial feedback from the member countries. The second is about the cut in trade growth forecast for 2013 by the WTO. Both these developments can certainly impact the outcome of the ministerial meeting slated for December in Bali, Indonesia.

The eliminated candidates for the director-general's post are from Jordan, Kenya, Ghana and Costa Rica. And the candidates who remain in the fray are from Indonesia, Mexico, South Korea, New Zealand and Brazil. The elimination has been done following consultations with the member countries by a three-member panel consisting of Shahid Bashir of Pakistan who chairs the WTO General Council; Jonathan Fried of Canada who chairs the Dispute Settlement Body; and Joakim Reiter of Sweden who chairs the Trade Policy Review Body.

This elimination, as reports suggest, is being viewed by countries like Ghana and Kenya with some amount of suspicion. But, for now, the five shortlisted candidates move to the third round where some core issues on understanding of the politics within the organisation will come into play.

Four of these candidates, Mari Pangestu of Indonesia, Tim Groser of New Zealand, Herminio Blanco of Mexico and Taeho Bark of South Korea, are former or current trade ministers. The fifth candidate, Roberto Carvalho de Azevêdo, has been Brazil's ambassador to the WTO. Each of these candidates, therefore, has a deep understanding of how the multilateral trade body can be made more effective for improving global trade.

An important test would be to see what they could do to bring the member countries together for a successful ministerial meeting in Bali - in the few months they will have before the ministerial.

Given the current state of deadlock in the Doha Round, it will be important to get a director-general who can guide the trade body to deliver a development-led mandate at the Bali meeting. The primary aim of the director-general should be to get the member countries revive the role of the multilateral trade organisation as a dynamic platform on rule-making for global trade.

In such a member-driven organisation, which works on consensus, the director-general should have the ability to guide the discussions towards a balanced outcome that meets the overall objective of the Doha Round.

This is important if one looks at the WTO's projected trade growth forecast for 2013. The organisation says slow economic growth in developed economies, high rates of unemployment, and the euro zone crisis in 2012 may result in a growth rate of only 3.3 per cent for 2013 - down from an earlier projected rate of 4.5 per cent. The two per cent growth in 2012 was the slowest growth in trade since 2009, when the global slowdown was at its peak and the second slowest since 1981.

The main reason for the slowdown will be slow growth rates in the developed world. Developing countries as a whole have witnessed reasonably high growth in 2012.

Africa grew at six per cent in 2012, Asia at 3.8 per cent, the Commonwealth of Independent States at 3.7 per cent, West Asia at 3.3 per cent, South and Central America at 2.6 per cent, North America at 2.3 per cent and Europe witnessed a contraction of -0.1 per cent.

WTO Director-General Pascal Lamy has said the forecast "does not paint a rosy picture for international trade in 2013"; and, therefore, the stakes for Bali are high since countries should seek to end the growing protectionism across the world.

It is not yet known which candidate will India support in the race to the director-general's post. But what is important for New Delhi to weigh is the commitment of the candidate to a balanced outcome in Bali. The candidate will have to bring some fresh ideas to rejuvenate the trade organisation, and help build consensus among the member countries to work out a strong post-Bali agenda to revive global trade and target growing protectionism across the world. Given India's growing stake in global markets, the decision to support a candidate should be purely based on the candidate's ability to deliver.

The writer is Principal Adviser at APJ-SLG Law Offices

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First Published: Wed, April 24 2013. 21:46 IST