He knows his way around the Geneva-based organisation, can hit the ground running fully briefed on all the issues, and is well known and liked around the developing world – not least for his record of criticising the farm-subsidy policies of the USA and Europe. If anyone can revive the Doha round of trade talks, launched 12 years ago in an attempt to cut tariffs and trade-distorting farm subsidies around the world but now on life-support, it is surely him.
Yet Azevêdo, 55, is also Brazilian, a country with a patchy record on trade liberalisation and little openness to the rest of the world. Trade accounts for only 20 per cent of Brazilian gross domestic product. Brazil is also the leading member of Mercosul, a regional Latin American trade pact created in 1991 with great hopes that have since foundered. If Brazil can’t boost trade locally, what chance it can boost trade globally? Azevêdo’s nationality therefore makes him an unlikely leader of the WTO, especially as the organisation’s role as a broker of ambitious trade deals is in doubt given the rise of so many regional trade initiatives, such as the mooted US-European trade deal and the Trans-Pacific Partnership.
That, in essence, frames the most common pros and cons of Azevêdo’s emergence on Tuesday night as the new head the Geneva-based WTO. Clearly neither side of the argument was sufficiently overpowering, though, as neither the USA nor Europe had any objections to Azevêdo, even if they might have preferred the second-placed candidate, Mexico’s Herminio Blanco.
“Brazil is part of where I come from, but we are not selling the Brazilian agenda,” as Azevedo has said.
Unlike the brouhaha that surrounds the new choice of the International Monetary Fund or the World Bank, this selection process was therefore not a polarising debate about global trade. No country – except perhaps for Mexico – was overly upset that Brazil’s candidate won the position.
Moreover, both sides of the argument have their own rebuttal. After all, Pascal Lamy, the retiring WTO head, is a French Socialist – so who says the head of the organisation has to come from a free-trading nation?
At the same time, Azevêdo’s Brazilian connections (if nothing else, his appointment was a big win for Brazilian diplomacy) might have helped win him developing world support. But that support won’t be universal.
The developing world wants to be able to protect domestic industries and have non-tarriff issues, such as agricultural subsidies, on the table. Azevêdo has form on these themes, which will be welcomed by Africa.
But support from elsewhere in the emerging world may well be lukewarm. For one, Brazil has a number of simmering trade disputes with its neighbour Argentina, which has several complaints against it pending at the WTO. If and when Azevêdo moves on these complaints, they could infect bilateral Brazilian-Argentine relations.
More importantly, there is China, which joined the WTO in 2001. Coincidentally, that is the same year that the stalled Doha round was launched, another world. Lately, Brazil has criticised China’s foreign exchange policy, saying it gives the country’s manufacturers an unfair advantage which has led to the country being swamped with cheap imports that have hollowed out local industry.
Currency manipulation, which Azevêdo has said in the past should be part of the WTO’s remit, is another tricky issue that he will have to deal with. Whatever Brazil’s ability to bridge national differences thanks to its rainbow approach to foreign diplomacy, it may not win him Chinese support.
Lastly, there is the developed world. For many years, the US business community has had little trust in either the WTO’s negotiating powers or dispute resolution system. Congress now shares these concerns. That is why regional trade groupings have proliferated.
Clearly, the US is never going to leave the WTO and cede its rights. But it is unlikely to shed much sweat either in getting the Doha round off and running again, or revitalising the system. The EU, meanwhile, is grappling with the eurozone crisis and has the mooted US trade deal on the table. If Azevêdo cannot get the Doha round up and running again, that will shrink his job to being one largely about delegating dispute resolutions to technical panels.
In short, being head of the WTO looks like a hapless task. Following the selection of an Argentine Pope earlier this year, it is also the latest post at a global institution to be won by a Latin American. That is kudos to the region, and its growing stature. But it does pose a question. Between breathing new life back into the Vatican or the WTO, which is the harder job?