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TWN Info Service on WTO and Trade Issues (Apr16/06)
13 April 2016
Third World Network

Azevedo soft-pedals on US trade policy after elections, and WTO
Published in  SUNS #8218 dated 11 April 2016


Geneva, 8 Apr (D. Ravi Kanth) -- In the face of growing anti-trade sentiment and opposition to bilateral and regional trade deals in the United States, evident in the current phase of Democratic and Republican party primaries in the US, the World Trade Organization director-general Roberto Azevedo on Thursday (7 April) sought to soft-pedal, if not pussyfoot, around likely US trade policy after the US Presidential elections, saying that he cannot comment on the statements made by the candidates.

At a press conference, after release of the latest world trade figures issued by the WTO, Azevedo said he was ready to answer a question on the US Presidential elections, and the Brexit or Britain's referendum to decide whether to stay in the European Union or exit.

Having opened himself to questions on the US Presidential elections that have generated considerable debate around the prevailing anti-NAFTA (North American Free Trade Agreement) and TPP (Trans-Pacific Partnership) agreements, Azevedo said: "As far as the US elections [are concerned], if you are referring to what candidates are saying, I cannot comment on candidates' statements."

He then went on to add, "candidates can say anything [and] officials cannot do anything."

"So, we have to see what becomes of [the] US trade policy once the change of government is effected," Azevedo said.

"We have to wait before we comment on anything regarding the particular positions on the multilateral process," the director-general said.

Given the opposition to bilateral and regional trade agreements concluded by the successive US administrations, voiced by both Democratic and Republican contenders in party primaries for the Presidential elections in November, it remains unclear whether the US trade policy will pursue an aggressive trade liberalization agenda, according to several analysts.

Clearly, Azevedo preferred caution before identifying with any one party in the US, according to trade envoys.

According to several trade envoys who asked not to be identified, Azevedo has begun campaigning for his second term before the election for the director-general begins later in December.

He has recently visited a dozen countries in Africa, Asia, Caribbean, and South America, ostensibly for providing advice on how to overcome economic and trade problems. However, his visits have really to do with his re-election campaign, trade envoys said.

Azevedo's leanings towards Washington and his efforts at the WTO to advance only the US agenda have raised scepticism in a major European capital, a Western trade envoy told the SUNS.

"I'm not sure that the EU is ready to support him for the second term," the envoy said, preferring to voice his view in anonymity.

The EU had been divided in its support for Azevedo in 2013 as a majority of countries supported the Mexican candidate Herminio Blanco and some 13 countries supported Azevedo.

As for the referendum in the UK on the continuation of Britain's membership in the European Union, Azevedo said trade has always been a very important component of the British economy and the United Kingdom has always relied on trade in goods and services.

"Therefore, (Britain) leaving the EU will have important consequences," he said. Azevedo said how it would affect the UK and its relations with other countries is a matter of speculation at this juncture.

It would also depend on the terms, if the separation happens, and it would depend on the relationship that would ensue between the UK and the EU, he suggested.

Further, the Brexit also depends on the negotiations that Britain would have with WTO members to clarify the rights and obligations at that point of time, Azevedo said, suggesting that the whole issue needs to be looked into carefully.

Ultimately, "it is the sovereign decision of the UK government and I would withhold my comments," he said.

As for world trade, it is clear that 2015 has struck a serious blow to developing countries, particularly commodity exporting nations as the value of their exports, particularly oil and iron ore among others, dropped precipitously.

Indeed, world trade nearly collapsed in value terms last year due to a drop of 13% to $16.5 trillion, from $19 trillion in 2014.

Developing countries are forced to sell much more in volume terms to stay afloat.

World trade is expected to grow by 2.8% this year and 3.6% next year subject to several downside risks. The risks include the slowing Chinese economy, continued volatility in the financial market, and persisting negative business sentiment.

The divergent movements in volume and value remain a source of concern which "could undermine fragile economic growth in vulnerable economies," Azevedo acknowledged.

The drop in dollar value of world trade was largely due to strong fluctuations in commodity prices and exchange rates, "which were in turn driven by slowing economic growth in China", resilient oil production in the US, and divergent monetary policies across leading economies. +

 


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