As Brazil’s Robert Azevedo takes over the reins at the World Trade Organization (WTO), resuscitating global trade talks is his primary goal. The WTO is being sidestepped as countries push for bilateral trade accords.
Brazilian career diplomat Robert Azevedo is a familiar face at the Geneva headquarters of the World Trade Organization (WTO). He has served his country as senior representative to the global trade body for more than five years. When he takes over as the new WTO chief on September 1, his former fellow country representatives may wish him better fortunes than his hapless predecessor France's Pascal Lamy had.
The success of a WTO presidency largely depends on the ability of the organization's leader to foster global trade with a new agreement on improved standards. However, the most recent round of global trade talks - commonly called the Doha round after the Qatari capital where it started 12 years ago - bodes ill for Azevedo's presidency.
Global trade talks are stalled as poor countries seek to protect their subsistence farmers from subsidised exports.
Trade experts have long described the stalled negotiations as dead. Industrialized nations and developing countries are at loggerheads over agricultural policies. While rich countries insist on maintaining their farm subsidies, poorer nations refuse to lower their import duties for products coming from them.
Whoever heads the WTO, any leader, even from Latin America or Asia, is dependent on the goodwill of the organization's important members, said Rolf Langhammer, senior economist at the Kiel Institute for the World Economy (IfW).
“If senior WTO members remain unwilling to give up their mercantilist approach to foreign trade, even a cahrismatic president won't stand a chance,” Langhammer told DW.
Nevertheless, a new global trade accord would indeed benefit all members of WTO. Recent estimates have calculated the trading benefits reaped from a multilateral agreement to reach between $300 billion (226 billion euros) and $800 billion.
However, many of the WTO's 159 member states have stopped waiting for the trade body to deliver the results of freer global trade. They have begun negotiating their own bilateral and multilateral trade accords, aimed at signing so-called Preferential Trade Agreements (PTAs) with neighbors and regional trading blocs.
On a global scale, more and more countries have adopted a go-it-alone approach to boosting their foreign trade. Currently, about 354 free trade agreements have been signed with talks on 192 more underway at the moment. At the turn of the millennium, just about 120 free trade zones existed.
Just recently, Brazil, which is Latin America's largest economy, announced its readiness to start free trade talks with the European Union. And in mid-February, the EU said negotiations for a Transatlantic Free Trade Zone with the United States would be launched in the course of 2013 aimed at creating the world's largest free trade area.
“The very moment talks on a transatlantic accord start, there is no chance for the Doha round to be successfully finished,” Langhammer told DW.
If that occurs the WTO would come to realize that the new world trading order is based on globalized production units, which just had to ensure a smooth-running supply chain to keep working, he added.
New role sought
In this new trading world, the WTO is still in the process of finding a meaningful role. Thereby, its efforts increasingly focus on opening bilateral or regional trade pacts to outside participants. Moreover, WTO seeks to give those agreements a legal framework that is valid on a global scale.
However, even if the Doha talks were to founder for good, WTO would remain here to stay, said Langhammer.
“Institutions like WTO don't die. They degenerate rather than being dissolved,” he said, adding that subsequently the new WTO may not be able to change much, but he had a secure job, after all.