TWN Info Service on WTO and Trade Issues (Feb13/02)
18 February 2013
Third World Network

WTO D-G candidates make their presentations
Published in SUNS #7515 dated 31 January 2013

Geneva, 30 Jan (Kanaga Raja) -- The nine candidates vying for the post of Director-General of the World Trade Organisation (WTO) have begun making their presentations over a three-day period (29-31 January) at the General Council.

The nine candidates are Mr Alan John Kwadwo Kyerematen of Ghana, Ms Anabel Gonzalez of Costa Rica, Ms Mari Elka Pangestu of Indonesia, Mr Tim Groser of New Zealand, Ms Amina C. Mohamed of Kenya, Mr Ahmad Thougan Hindawi of Jordan, Mr Herminio Blanco of Mexico, Mr Taeho Bark of Korea, and Mr Roberto Carvalho de Azevedo of Brazil.

The term of the current Director-General Pascal Lamy is set to expire on 31 August 2013 and the selection process for the next WTO head is set to conclude by end May.

According to information posted on the WTO website, spread out over the three-day period, each of the nine candidates (in the order in which their nominations were received by the WTO) will make a brief presentation to the membership of 15 minutes duration, and this will be followed by a question-and-answer session lasting no more than one hour and 15 minutes.

Following this, each candidate will then hold a press conference lasting no more than 30 minutes.

Mr Kyerematen of Ghana kicked off the process on Tuesday. In his presentation to the General Council, a copy of which was made available to the media, he said that the challenge before the membership is to revitalise the WTO.

"We need a New Trade Consensus - a grand bargain built on a comprehensive, coherent and dynamic approach to the full range of issues and the interests of all Members."

"The WTO needs new energy. The stalemate in negotiations threatens to weaken the functioning of the system as a whole. Governments are increasingly looking elsewhere. Persistent failure to agree erodes confidence in the system. Furthermore, existing agreements that do not keep pace with changing realities will lose relevance and respect."

On the negotiating front, the Ghanian candidate said "we need first to achieve outcomes in line with the guidance from MC8 [Eighth Ministerial Conference held in December 2011]. These outcomes are needed both for their own value and to show that the system is still capable of producing results. They are important for rebuilding trust and confidence among negotiators. The more we can achieve by the time of the Bali Ministerial [scheduled for December 2013] the better, though we also need to keep our ambitions realistic. You can be sure that this effort will be my immediate priority from my first day on the job."

Mr Kyerematen added: "However, the Round will not end at Bali. We need to maintain our commitment to the DDA [Doha Development Agenda]. The hopes invested in it, especially by developing Members, cannot just be put aside. Issues such as agriculture remain crucially important not only to the negotiations, but also to the lives of people. The WTO has an important contribution to make to the global campaign for food security. And the cotton issue must remain a priority. The WTO must deliver on all of our agreed agenda, particularly on the development dimension."

The New Trade Consensus also means acting in a coherent way to re-energise the whole range of the WTO's work. To give some important examples: its vital role in resisting protectionism must be maintained; the effectiveness of the dispute settlement system must be enhanced; and accessions must be advanced with due attention to their systemic benefits.

Beyond Bali, he said, concluding the Round and charting the future direction of the multilateral trading system are linked. "As we conclude the negotiations, we should be opening up other perspectives. We need to keep the system moving along with the world it serves. Members are not short of ideas about what issues deserve attention. The point is that not all of these issues have to be treated in the same way at the same time."

He highlighted five key strategic drivers of the New Trade Consensus.

First, "we must rebuild a solid political consensus based on the core values of our institution. Let us focus on the things that unite us, not those that divide us. A solid political consensus will allow us to approach decision-making in a flexible and inclusive manner."

Second, the WTO belongs to all its Members. Every Member's interests are important and must be taken into account in the decision-making process.

Third, "we must reach out more actively to business, civil society and other stakeholders. Trade is part of a much bigger economic, political and social reality. Policy needs to recognize this."

Fourth, "fostering growth and development is fundamental to the mission of our institution. We need a robust and dynamic approach to the deep challenges of development."

Fifth, the WTO needs to manage the relationship between multilateralism and regionalism in ways that allow trade to benefit from both, he said.

Mr Kyerematen also outlined how he saw the development dimension of the New Trade Consensus. The starting point is that Members universally place value on the growth, development and prosperity of all their trading partners.

"Special and differential treatment [SDT] and preferences remain of great importance to many developing countries. These need to be maintained. However, we know that SDT alone cannot bring about the full integration of developing countries into the multilateral trading system. We need a holistic approach."

According to Mr Kyerematen, its elements include:

-- Improving market access in the leading trading nations, including through the removal of tariff peaks, tariff escalation and non-tariff barriers. This is crucial to enabling developing countries to participate more fully in global value chains.

-- Improving access to trade finance for developing countries.

-- Giving particular priority to the needs of least-developed countries. "My region, West Africa, and indeed the whole of Africa, is home to some of the poorest LDCs. Trade alone is not the answer to their problems but it is a vital part of the answer."

-- Strengthening public-private partnerships.

-- Maintaining and improving capacity-building efforts such as the Enhanced Integrated Framework for LDCs and the Aid for Trade initiative.

-- There is no one-size-fits-all solution. The challenges faced by small and vulnerable economies, for example, require targeted responses.

-- Adopting national policies that create an enabling environment for trade and investment. There is also a need for coherence between trade policies and other policies, such as macroeconomic, fiscal, agricultural and social policies.

"We are not tied forever to One Big Round or always to ‘hard law' solutions. The WTO should be able to advance on agreements in individual areas as we did fifteen years ago in financial services and basic telecoms; it should have enough confidence to be able to consider plurilateral agreements on their merits as long as the basic multilateral framework of non-discrimination is respected; it should be able to allow those members who want to go further or faster to do so, provided that the results are in the common interest and ultimately of benefit to all; and it should be able to consider non-binding or ‘soft law' agreements where these could help build confidence as a basis for something more solid. In this and other ways, we shouldn't hesitate to learn from the best practices of other trade forums such as APEC."

Also making presentations on Tuesday were Ms Gonzalez of Costa Rica and Ms Pangestu of Indonesia.

In her presentation, Ms Gonzalez of Costa Rica said that trade is a powerful instrument to foster growth and development. "We have been privileged to witness, in our lifetime, the ability of trade to lift millions of individuals out of poverty in so many parts of the world. But trade is equally key in transforming productive structures, increasing productivity, enhancing access to technology and fostering innovation, particularly when firmly embedded in broader national growth and development strategies."

"Let us never forget that trade liberalization is a means to development, not an end in itself."

She noted that the world economy still feels the headwinds of continued imbalances and uncertainty. Such uncertainty weighs on global trading volumes, which grew by a mere 2.5% last year. "We need more robust trade growth, not just because such growth will bring greater global prosperity but also because trade can help to generate more - and better - jobs."

"We need more trade for all countries. The fact that developing countries account today for about one-half of aggregate trade flows is unambiguously good news. Still, the distribution of that growth, welcome as it otherwise is, remains concentrated in too few nations. For many in the African continent and elsewhere, LDCs in particular, the challenge of integrating in the world economy remains daunting. High trade costs and supply-side constraints can durably hamper the ability of firms to take advantage of opportunities, sowing frustration and disenchantment towards the very idea of market opening. The WTO must be ready and properly equipped if it is to assume a key role in unleashing the potential of trade for all."

She further said that few periods in world history have witnessed such a real-time confluence of changes in the political, economic and technological fields, some of which exert influences way beyond the WTO and trade governance. Others are reshaping the geography and very nature of production and exchange. These include the global fragmentation of international production, the increase in South-South trade and investment activity, and the rise of international trade in services to cite just some of the most salient trends, bringing with them new questions and challenges that the WTO membership must contend with.

"While these changes are taking place at breakneck speed, progress in the Doha Round has been painstakingly slow, with negotiations reaching an impasse that could not be resolved in its original format, as recognized by Members at MC8. The process that has taken place in Geneva in the past few months inspires in me a renewed sense of optimism - cautious to be sure - that the Members will be able to produce concrete deliverables in Bali, in trade facilitation, some issues in agricultural trade, and on special and differential treatment - all topics of particular importance for least-developed countries. It is within our collective reach to do so. And this would make for a most welcome, and confidence-promoting, step forward in multilateral cooperation, reinvigorating the WTO as a negotiating forum."

She added: "But MC9 is not the end-game and we must continue to chart the best ways of delivering on the Doha mandate. This remains critically important, not least in terms of institutional legitimacy. We are all heavily invested in Doha and have put great efforts into it. Resolution of the DDA's agenda is long overdue, above all as a response to the trade needs of developing and least-developed countries. In listening closely to Members and working tirelessly to promote convergent viewpoints, the next Director General must have as a central priority to bring closure to the round and ensure that it fulfills its stated aims."

In addressing today's new challenges and thinking about the WTO of tomorrow, there is need to engage in a candid discussion about an immediate and medium-term agenda. Subjects as relevant and so closely intertwined as the relationship between trade and investment, climate change, natural resources and global value chains cannot be ignored or left for other institutions or agreements. Not all of these deliberations, of course, need to morph into a negotiating agenda.

"Let me be clear: I do not advocate that we put aside the DDA in favour of new topics, but I do believe that Members can both complete the tasks of today while keeping an eye on tomorrow's challenges."

In discussing trade in different formats, a diversified portfolio of trade partnerships is also useful in preventing protectionism, exploiting neighbourhood effects and boosting growth. PTAs (preferential trade agreements) can play a role in promoting further market opening - and regional markets are sometimes easier to access for developing countries. They may allow for useful experimentation with new rules in novel trade-related areas.

Moreover, in some instances, they may simply be the proper locus of trade governance as not everything needs to be defined at the global level, she said.

The downside, of course, lies in the dangers posed by the discrimination that is inherent in these agreements and in their potential to exclude others. The trade marginalisation of countries, particularly lesser developed ones, does not bode well for the system and may all too easily exacerbate frictions among nations.

In this context, said Ms Gonzalez, negotiations of plurilateral or critical mass agreements that are open to all Members and brought within the realm of the WTO, can and should provide a multilaterally friendly means for advancing the trade agenda.

"The WTO is a Member-driven organization and you, the Geneva ambassadors, are key in making it work on a day to day basis. In line with this basic principle, the Director General's task is to lead the institution under the guidance of Members so as to make sure it delivers on its mandate. Beyond its key roles in market opening and rule-making, the institution also dispenses important responsibilities in dispute settlement, monitoring and surveillance, capacity building - now significantly enhanced through the Aid for Trade initiative, research and information sharing, interaction with other organizations, and public outreach and advocacy of the values and principles of the organization. The Director General should be ready to work hand-in-hand with Members and the Secretariat in delivering on each of these functions in the best tradition of Chief Facilitator."

In her media briefing following her presentation, when asked about the fact that some countries are of the view that it should now be the turn of Africa and Latin America to head the WTO, Ms Pangestu of Indonesia believed that the Director-General of the WTO should be chosen based on merit, capability, capacity and competency, but also be based on their experience and skill and knowledge to understand the 157 members of this organisation, which come from different regions and levels of development.

In response to another question on the support she has for her candidacy, she referred to her President deciding to put forward Indonesia's name, adding that the ASEAN economies have indicated their tacit support. They had discussed this at an ASEAN senior officials' meeting as well as at the Ministerial level. "I do believe that we will get the support from ASEAN countries," she said.

On Wednesday, Mr Groser of New Zealand, Ms Mohamed of Kenya, Mr Hindawi of Jordan and Mr Blanco of Mexico were slated to make presentations at the General Council, with the meeting set to go on till evening.

In his media briefing following his presentation, Mr Groser of New Zealand, who chaired the agriculture negotiations in the WTO in 2004-2005, said that his presentation to members tried to address the central concerns of the membership, the first being the relevance of the WTO.

His view is that the WTO is not in a state of crisis but "faces a deeper slower moving problem of relevance, and if we never advance the frontier of the rules that we negotiated 19 years ago in Marrakesh, this institution will suffer the fate eventually that many multilateral institutions face, which is they don't disappear, they [are] just not the go-to place."

Other institutions or negotiating approaches that are capable of handling the issues that the institution in question can't will take over, he said, adding that this is a serious problem facing the membership.

Secondly, was the role of the WTO and what that meant for the position of the Director-General, he said, highlighting the issue of advocacy. Whoever he or she may be, they have to be deeply articulate and persuasive. Persuasiveness is not just a facility with words, but has to rest on personal credibility.

Groser also mentioned the Secretariat and the enormous respect he has for it. "So we have to establish a very direct linkage between using and resourcing them and the Director-General."

The Director-General must also be able to play in two fields - the political/Ministerial and with the ambassadors and senior officials. One without the other is only half the meal, he said.

The Director-General must be able to deal with ministers on a position of equality. The political element of this is undeniable. But if there is one fallacy that this institution hasn't quite absorbed, it is relying just on ‘political will', said Groser.

On the issue of this being the turn of the developing countries (to head the WTO), Groser said that "if this is a foreign policy question that we are trying to address in the choice of the Director-General, then I am not the answer to that question."

But if it is a deeper question around developing countries, which number 120 out of 157 members, that they are genuinely worried about this organisation, that if they made a choice that did not work, they have to live with that for a full four years, "can we afford a full four years of drift?"

If they are worried about getting the Doha Development Agenda done, "then I am not pretending I am the only answer to that question. That would be arrogant, but I absolutely would say I am a plausible answer to that question."

"So, the developing world needs to decide what is the real question we are trying to answer here. If it's a foreign policy one, then I am not the answer. If it's the second most substantive one, then I am a answer...," he said, adding that a Director-General who does not command the trust of all members will not be able to do this job.

Asked how he would handle the negotiations, Groser said that "he could be a trade journalist's nightmare", explaining that he deeply believes that the Director-General has to be a vigorous public advocate of the system at the level of principle. They have to stand alongside the heads of other major institutions and get out there and defend the basis for a liberal, multilateral rules-based system.

When it comes to the highly sensitive negotiating issues, he believes that the Director-General should say nothing in public.

Mr Bark of Korea and Mr Azevedo of Brazil are slated to make their presentations on Thursday. +