BackAzevêdo’s legacy at the WTO
Described as 'Saint Roberto', Azevdo is often credited with delivering two major agreementstrade facilitation and export competitionafter 15 years of paralysis
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A bombshell from the US has left trade officials rattled. They did not expect that a prospective president would threaten to pull his country out of the World Trade Organization (WTO). Republican presidential nominee Donald Trump did just that last month.
His comments against new trade deals such as the Trans-Pacific Partnership, the Trans-Atlantic Trade and Investment Partnership and existing trade agreements have created an existential panic among devotees of globalization. The erstwhile pundits who propagated the values of liberal trade policies and unfettered markets that underpinned globalization are now calling for “responsive nationalism" instead of “reflexive nationalism".
The dominant voice of liberal trade policies—The Economist magazine—is petrified of the enveloping backlash against globalization. After the recent Brexit vote, it said the future of the “liberal world order" squarely depends on the success of Hillary Clinton, the Democratic Party’s presidential candidate, in the US polls in November. Ironically, over a century ago, it fervently campaigned for the continuation of cotton cultivation by “Negroes" during the American civil war, wrote Sven Beckert, the Harvard historian, in the Empire of Cotton: A Global History.
When the US presidential election comes to a close in four months, another selection process of a much smaller magnitude will commence as the WTO’s 164 members choose their next director general. One candidate has already announced his intention to run for a second term. He is Roberto Carvalho de Azevêdo from Brazil. This is the second time that a serving director general is going to seek a second term.
Earlier, Pascal Lamy, the former European Union trade commissioner, had served two terms during 2005-13. Azevêdo is the WTO’s sixth director general after Peter Sutherland (1 July 1993-1 May 1995), Renato Ruggiero (1 May 1995-1 September 1999), Mike Moore (1 September 1999-1 September 2002), Supachai Panitchpakdi (1 September 2002- 1 September 2005), Pascal Lamy and now Azevêdo.
Described as “Saint Roberto", Azevêdo is often credited with delivering two major agreements—trade facilitation and export competition—after 15 years of paralysis. “Roberto, for obvious reasons you were not my candidate, but let me say that you have proved to be a fantastic director-general and therefore should be reappointed for a second term, if you so wish", said ambassador Fernando De Mateo, the outgoing trade envoy of Mexico to the WTO, last Wednesday. Mexico had put up a candidate against Azevêdo who was defeated in the final round.
Azevêdo was a long-serving Brazilian trade official and envoy to the WTO. He was nominated by the now impeached Workers’ Party government of Dilma Rousseff in December 2012. His globe-trotting campaign was made possible because of liberal funding and a special aircraft provided by the Rousseff government. In a hard-fought contest with seven other candidates, including serving trade ministers, he scored a significant victory. “To be an effective DG you need two things: you have to be a strategist and you have to know the details," he told Washington Trade Daily, an American publication, during his campaign in January 2013.
“In Geneva, you have to know the forests and you have to know the trees and you have to know the branches of the trees and the leaves on the trees if you have to go anywhere," Azevêdo said. Little wonder that he had managed to secure support from the developing countries, particularly India, on the expectation that he would address the core developmental issues in the global trading system.
As a trade envoy of Brazil and the coordinator for the G-20 developing countries on agriculture, Azevêdo created considerable trust and confidence among his colleagues. Despite fierce opposition from the US to the December 2008 draft modalities, which suggested credible reduction commitments in tariffs and trade-distorting farm subsidies, he maintained that they are the “basis for negotiations and represent the end-game in terms of the landing zones of ambition".
In a similar vein, Azevêdo had remained sceptical about the possibility of harvesting the trade facilitation agreement. “For Brazil and many others, this (trade facilitation) is not a self-balancing issue," Azevêdo said at the informal head of delegations meeting of the general council on 7 June 2012.
“Stand-alone outcomes for trade facilitation are simply not realistic," he said. “If we want to advance in this, or in any other area actually, we must be sensitive to the need to also make progress in areas of interest to others."
He led Brazil in a major cotton dispute against the US at the WTO. The WTO’s highest court—the Appellate Body—dealt a body blow in 2005 by ruling against Washington’s trade-distorting subsidies. Surprisingly, after securing a major victory, Azevedo had settled for a framework agreement that let Washington off the hook. The US bought its way out of this dispute, without having to reform its subsidies, by paying a lump sum of $300 million while Brazil forfeited $829 million in WTO-mandated sanctions against US goods and services.
Small wonder then, that expectations soared when Azevêdo took over as the director general in September 2013. The developing countries seemed confident that the former Brazilian trade envoy will work towards credible and equitable outcomes in all areas. That was, however, not the case. There was a sea change in the run-up to the WTO’s ninth ministerial conference in Bali, Indonesia, in December 2013. It became as clear as daylight that the director general’s first priority was to satisfy the US’ demands while turning his back to areas in which Washington had little interest.
Consequently, issues raised by the developing and poorest countries in agriculture, industrial goods, services, and special and differential flexibilities in the Doha Development Agenda (DDA) were put to bed as Uncle Sam was not willing to address them.
Azevêdo deserves kudos for devising an ingenious negotiating norm: remain silent on issues where Washington has spoken its mind—whether it is blocking a sitting judge of the Appellate Body from getting a second term or electrocuting the DDA to pursue only those areas that advance the US’ goals.
The Cuban deputy minister for trade and investment Ilean Barbara Nunez Mordoche had created a major crisis at the Bali ministerial meeting when she refused to discuss with Azevedo on the ground that he was an alleged US agent. Consequently, the former Indonesian minister Gita Wirjawan had to intervene and pacify her, according to people present at the meeting.
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