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Lamy candidacy will polarise WTO, may endanger trading system itself

Geneva, 8 Dec (Chakravarthi Raghavan) - With Mr. Pascal Lamy having thrown his hat into the ring, the World Trade Organization is now headed into a bruising fight over who is to be its next Director-General and inevitably six months of marking time over its Doha Work Programme.

Under the procedures and time-table set by the General Council, 31 December is the last date for member-countries to present candidates, and 31 May 2005 has been set as the date for completing the process of election. The new Director-General is to take over from Dr. Supachai Panitchpakdi, whose term runs till 31 August.

The candidacy of Lamy, who has just ended his term as the European Community’s Trade Commissioner, has been promoted by the Commission and its new Trade Commissioner, Peter Mandelson, and has received the support of the EC’s 133 Committee (the committee of representatives of the member-states). His candidacy has to be formally presented by France, which has indicated over the last week or so that it would nominate Lamy, if he makes up his mind to seek the job and the EU-members support him.

President Jacques Chirac had been opposed to continuing Lamy, a French socialist, at Brussels for another term, and had also not agreed to nominate him as a French candidate to head the IMF (when Camdessus retired), or for the European Central Bank job.

With Lamy’s candidacy, there are now five, announced and/or formally nominated candidates seeking the job:

The candidacy of Mr. Carlos Perez del Castillo, Uruguay’s former ambassador and now advisor to the Uruguayan President, was formally presented last week to the General Council Chairman, Amb. Shotaro Oshima of Japan. The candidacy when announced had bipartisan support in Uruguay. But a leftist coalition led by Tavare Vasquez defeated the candidates from the two parties, and the new government is due to take over in March.

Brazil has announced the candidacy of its envoy to WTO and UNOG, Amb.  Luiz Felipe de Seixas Correa, and his candidacy is due to be formally presented on Friday (10 December) to Oshima.

The candidacy of Mauritius Trade Minister, Mr. Jaya Krishna Cuttaree has been circulated by the Mauritius delegation to members, is also expected to be formally presented over the next few days.

At the ACP meeting this week, where Cuttaree had expected to get endorsement, Kenya has said that it would be proposing its own nominee - expected to be its trade minister, Muhisa Kituyi.

Oshima has tentatively scheduled a special meeting of the General Council on 26 January - where candidates could present themselves to the membership.

According to the WTO time-line, the candidates have time till 31 March to lobby and canvass the members, and the General Council is to complete the process of electing the DG by 31 May.

The nomination of Lamy, who has held the Trade Commissioner’s job until last month - when the new Commission headed by the former Portugese Prime Minister Jose Durao Barroso (a Bush ally in the Iraq war) took over at Brussels - will make the fight for the top WTO post a bruising North-South battle, and divide the developing world too.

During his tenure at Brussels, the French Socialist pursued what is often described in western media as a ‘free trade agenda’, but like other ‘free trade’ advocates and policy-makers in the industrialized world, Lamy in reality has been pursuing as EC Trade Commissioner a neo-mercantalist agenda of protecting EC domestic markets, while promoting abroad, and more so in the South, the interests of European corporations - in investments, services and government procurement contracts and deals.

This has been done with a ‘paternalistic’, neo-colonial approach to the developing world, and in particular in the EC’s relationships with the ACP countries (linked to the EC under successive Lome Pacts, and now its socalled partnership agreements).

It was an attitude of: “we know best what is good for you - free trade, investment rules to enable our corporations to take over your economic space, and with some preferences for your exports, mostly commodities that we need - but not in competition with our own producers, but at the expense of other developing countries.”

This effort and thrust, and the EC’s ability to create divisions within the developing world led to the adoption of the new agenda of negotiations - some aimed at rewriting the Uruguay Round agreements, and pushing the ‘Singapore Issues’.

And in the run-up to Cancun (Sep 2003), Lamy and his trade directorate, reached a modus vivendi with USTR Robert Zoellick - in accommodating each other’s interests in agriculture, and attempting to force it down on the rest of the developing world, and pushing the ‘Singapore agenda’.

But this misfired, when the major developing countries of the South, the G.20 led by Brazil, with a core group of Brazil, India, China and South Africa resisted and countered with their own proposals in agriculture, and the ACP countries opposed Lamy’s Singapore agenda too.

The collapse at Cancun thus became inevitable, just as the one at Seattle in 1999.

In such a situation, several Third World diplomats and trade observers said, a personality who till just a few days ago had been promoting the EC’s trade agenda, taking the helm at the WTO (technically, under the Marrakesh Agreement, the DG’s only job is to head the secretariat and administer it, and has less powers than heads of other international organizations) would have negative consequences in the medium- to long-term for the institution and the system.

He would be unable to take an independent view representing the interests of all the members, and ensure that the secretariat is not partial to the views of one or two, but functions neutrally.

This would further polarise an already polarised WTO trading system, and over the medium- to long-term in fact might damage it irretrievably.

Under his successor at Brussels, Mr. Mandelson - a close confidant of the British Prime Minister Tony Blair, and who had to quit government twice over his conduct and relationships with some corporate interests - there are clear signals that the Blair effort to promote the Bush political and security agenda (as witnessed in the war on Iraq) in Europe, may now sought to be boosted via the trading system - with a transatlantic alliance against the developing world.

Mandelson is reported, after the Brussels 133 committee meeting, as warning against the kind of compromise in the fight for the office between New Zealand’s Mike Moore and Thailand’s Supachai Panitchpakdi - a divided split term.

EC officials also believe that with the EU endorsement and support of the US, and Brussels ability to influence the ACP countries, Lamy will prevail.

It means though that the EC having failed to persuade others to fall in line with its view and demands is now promoting a candidacy that may attempt to force down that same agenda on others at the WTO.

However, even if Lamy wins, and this is not so certain, the days are past when the US and EU, and a strong WTO head, could force down unpalatable compromises on the developing world.

The public in these countries, and more so in the days of the internet, are quite conscious of and resistant to further inroads via the WTO, and even authoritarian governments in the South will not be able to deliver.

Speaking on conditions of anonymity, trade observers and several Third World diplomats, with differing views on the other candidates, saw the Lamy candidacy as an ‘aggressive move’ by Europe.

This, they argue, is more so because of the EC trade agenda at the WTO that Lamy had pursued and pushed (after a failure at Seattle in 1999) in Doha in 2001, but which is again stalemated; and with human nature being what it is, lamy would again promote this agenda to prove himself.

In the runup to and at Doha in 2001, he acted in tandem with Zoellick, to taking quick advantage of the global situation in the immediate aftermath of the 9/11 terrorist attacks in New York and Washington.

The attempts to push through that agenda, reach a modus-vivendi with the US on agriculture (to accommodate each other’s interests) and force it down on the major developing countries, and promote the Singapore agenda, led to the collapse at Cancun in September 2003.

Since then, while the July framework package at the WTO General Council sought to revive the negotiations, the differences and conflicts have not been removed.

They have become worse, and hence the more of the same old failed policies may have same if not worse outcomes, and this will impact on the system, and the majors themselves. - SUNS5705

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