The WTO is a large and complex institution, whose 25-year history features both high and low points, along with extended periods of stasis – though the illusion of stasis is deceptive, given the work that has been consistently underway in Geneva and in capitals over this timeframe.
The seven years of Azevêdo’s tenure have been no exception, leaving an unclear road ahead now that the push for a Doha Round “grand bargain” in the style of the Uruguay Round has been all but abandoned.
The prospect of a leadership change has sparked an intensified discussion over the powers and limitations of the Director-General’s role, with news reports suggesting that political “gravitas” will be a key attribute for WTO members to see in a prospective leader.
The full extent of COVID-19’s impacts will not be known for months, even years, though what is certain is that the road to achieve the ambitions of the 2030 Agenda for Sustainable Development will be harder, and the WTO can either serve as a help, a hindrance, or a combination of both.
It has now been seven years since the World Trade Organization (WTO) saw its top leadership position change hands and, as expected, who will be the next head of the Geneva-based institution has become the talk of the trade community. There are currently eight contenders for the role of WTO Director-General, mostly current or former ministers of trade, hailing from various world regions. Three of the candidates are women. While the hype over who might succeed Roberto Azevêdo when he steps down on 31 August 2020 is a familiar one for experienced trade watchers, it is worth revisiting the lessons of the past in order to ensure that the next chapter in the Organization’s history can truly herald a long-term shift in fortunes.
The WTO is a large and complex institution, whose 25-year history features both high and low points, along with extended periods of stasis – though the illusion of stasis is deceptive, given the work that has been consistently underway in Geneva and in capitals over this timeframe. The seven years of Azevêdo’s tenure have been no exception, leaving an unclear road ahead now that the push for a Doha Round “grand bargain” in the style of the Uruguay Round has been all but abandoned.
The Doha Round was launched in 2001, with the target of concluding by January 2005 a sweeping set of reforms that would better address development considerations and help rectify the imbalances inherent in the Uruguay Round Agreements that established the Organization. That objective was never reached.
When Roberto Azevêdo took office as Director-General in September 2013, the excitement was palpable. He was the first South American to ever serve as WTO chief, and won the role to succeed Pascal Lamy after a high-profile race that involved eight other contenders, which was the largest pool in the institution’s history and the first to include women as candidates. Notably, Azevêdo was also the only candidate who had not held the position of minister, having instead served for many years as Brazil’s Ambassador to the WTO and previously as his country’s vice minister for economic and technological affairs. He was a familiar face in Geneva circles, and also came to the role with a strong understanding of the Organization’s dispute settlement arm and the challenges inherent in the fraught negotiations on reforming agricultural trade rules.
At the WTO, the situation was grim. Two years before, trade ministers at the 2011 Geneva Ministerial Conference had acknowledged that the Doha Round was at an “impasse,” and that there was the “need to more fully explore different negotiating approaches” to advance with the Doha Development Agenda, which spans a broad set of topics ranging from agricultural subsidies and services market access to reforms of the WTO’s dispute settlement rules. The Conference yielded no ministerial declaration, and this language on the “impasse” was instead featured in a non-binding consensus document attached to the ministerial chair’s statement. Yet while the 2011 Geneva ministerial was lackluster at best, this non-binding document ultimately shaped many of the events of Azevêdo’s tenure.
After 2011, negotiators began ramping up their search for issues that could allow for an “early harvest,” looking to extract “low-hanging fruit” from the Doha Development Agenda that could be effective in terms of reducing trade costs and improving development outcomes. There was also an affective dimension linked to a successful early harvest: it could provide some much-needed enthusiasm and hope after the high-profile ministerial conference collapse in Cancún, Mexico, in 2003 and the “mini-ministerial” deadlock in Geneva, Switzerland, in 2008.
In September 2013, Azevêdo took office, and the push was on to make the December ministerial conference in Bali, Indonesia, a success. The Geneva trade community went into negotiating hyperdrive, and for the first months of Azevêdo’s tenure, WTO members were able to exert the political will to make progress in a way unseen for several years, partly to show a vote of confidence in their incoming Director-General. The result was the WTO’s Trade Facilitation Agreement, the first global trade accord struck since the conclusion of the Uruguay Round in the early 1990s, though even this achievement required round-the-clock negotiations over the political linkage made with a ministerial decision on public stockholding for food security purposes.
While the 2013 Bali Ministerial Conference was heralded as proof positive that the WTO had “truly delivered” and that the rest of the Doha Development Agenda may not be far behind, the event has since proven to be the high-water mark of the past seven years. This shift in fortunes cannot be overlooked: while new leadership can help shake things up in the short-term, it is far from sufficient in ensuring long-term changes if deeper tensions persist.
The most recent ministerial conferences in Nairobi, Kenya, and Buenos Aires, Argentina, respectively, were contentious events, with the former seeing members openly at odds over how to approach future multilateral negotiations. This disagreement was ultimately set down in writing in the 2015 Nairobi Ministerial Declaration, though the event did see a long-awaited multilateral decision on agricultural export subsidies and the conclusion of talks to update the Information Technology Agreement’s product coverage.
The Buenos Aires event in 2017 saw efforts at any multilateral outcomes falter, with no fisheries subsidies agreement reached, nor any work programme on agricultural trade issues possible. Meanwhile, various groups of WTO members confirmed their plans to move ahead on issues that are not part of the multilateral negotiating agenda, such as electronic commerce and investment facilitation.
“It’s not compatible to expect multilateralism to work and at the same time to expect to walk out with everything you wanted. This is a recipe for failure,” Azevêdo said at the time, urging negotiators to not lose heart from the outcome, but rather use it to reinvigorate their efforts back in Geneva.
The intervening years have seen the mood worsen, partly due to the paralysis of the Appellate Body, the WTO’s highest court, in December 2019, and amid few signs of movement in most of the multilateral negotiating areas. One important exception has been the fisheries subsidies negotiations, which are pushing for a conclusion this year, in line with SDG target 14.6. Unilateral trade actions by some major members have also brought into question what role the WTO could or should have in responding, while also exacerbating tensions among the membership and making it even more difficult to marshal the political will needed to achieve consensus outcomes.
While some of these difficulties can be attributed to leadership changes in various major advanced and emerging economies, with the corresponding shifts in trade policy, not all of this can be blamed on the geopolitical upheaval of recent years. Concerns over whether multilateralism in the trade world is under fire are far from new. Indeed, the theme of the 2012 WTO Public Forum was ‘Is Multilateralism in Crisis?’ and the proliferation of regional and mega-regional trade agreements has been underway for several years as countries looked to deepen their trading relationships elsewhere.
Much of the discussion today mirrors the language used during the 2013 Director-General selection process, with excitement building over the current race for the top job in global trade. This excitement is valuable in its own right: it provides a reminder of the WTO’s potential, serving as a place where members of all sizes and economic structures can come together to debate some of the most pressing trade issues of our time and what they mean for achieving the sustainable development objective enshrined in the Marrakesh Agreement’s preamble.
The prospect of a leadership change has sparked an intensified discussion over the powers and limitations of the Director-General’s role, with news reports suggesting that political “gravitas” will be a key attribute for WTO members to see in a prospective leader. The prospect of having a woman at the helm of the WTO is also generating much enthusiasm, as it would be a notable first for the institution. Also valuable are the notes of caution from some trade commentators who stress that the membership-driven nature of the institution means that no one person can solve all of its problems, and that the entrenched divisions on the very nature and purpose of the Organization may be more than any incoming Director-General can fix. A process of reflection among the membership of what their deepest challenges are and how to move past them, regardless of who takes the Organization’s top job, is vital to avoid the disappointments of years past.
While this has long been true, the circumstances in which we now live have made that process of reflection imperative. The full extent of COVID-19’s impacts will not be known for months, even years, though what is certain is that the road to achieve the ambitions of the 2030 Agenda for Sustainable Development will be harder, and the WTO can either serve as a help, a hindrance, or a combination of both. As WTO members prepare to select their next Director-General, they must also be willing to examine themselves, and where they can do more to ensure that the next global trade chief they choose is not only up to the task, but also has the support (s)he needs for mobilizing long-term impact in support of sustainable development.
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This policy brief was written by Sofía Baliño, Communications and Editorial Manager, Economic Law and Policy, IISD.