Roberto Azevedo, Mari Pangestu, Bark Taeho, Herminio Blanco, Tim Groser
As candidates drop out of the race for the director general of the World Trade Organization, possibly leading to a race between Brazil and Indonesia, U.S. officials said this week said that WTO member countries must work quickly if there is to be an agreement to be considered by trade ministers at a meeting in Bali in December.

Of the nine original candidates to replace Pascal Lamy, the current director general, three have dropped out and the race may be whittled down this week to Roberto Azevedo of Brazil and Mari Pangestu of Indonesia, Inside U.S. Trade reported on Friday.

The other three candidates still in the contest at this point are Bark Taeho of South Korea, Herminio Blanco of Mexico, and Tim Groser of New Zealand.

Last week Anabel Gonzalez of Costa Rica, Alan Kyerematen of Ghana and Amina Mohamed of Kenya were eliminated, although Mohamed at least initially declined to drop out.

According to media reports, the race is coming down to a battle over whether it is time for a Latin American or a woman to lead the WTO. No one from Africa or Latin America has led the WTO, but with the African candidates eliminated, only the Latin American candidates have claim to making geographic history. At the same time, Pangestu could become the first female director general.

The WTO member countries choose the director general through a consensus process. As it becomes clear that a candidate is unlikely to gain the support of a majority of members, that candidate is expected to drop out. The race is supposed to be settled by May and the new director general is expected to take office in September, three months before the trade ministers are expected to meet in Bali for what is agreed will be a make-or-break meeting on the Doha round of trade negotiations.
Demetrios Marantis
Acting U.S. Trade Representative Demetrios Marantis issued a news release from the Asian Pacific Economic Partnership conference in Indonesia.

“APEC economies cautioned this week that there must be a course correction if the WTO is to produce any results on trade facilitation and other key priorities at the Bali ministerial this December,” he said.

“We share the determination of our fellow APEC members to work together and shape a realistic package in Geneva now. This is necessary not only to produce economic opportunities for members, especially developing countries, but also to restore faith in the WTO’s ability to deliver multilateral results.”
Michael Punke
Earler in the week, Michael Punke, the U.S. ambassador to the WTO, noted to the APEC delegates in Indonesia that he had recently said in Geneva that “Absent a course correction, the current path of multilateral talks will lead directly to failure at Bali.”

“If Bali fails, it is hard to imagine how Doha can succeed. And that has serious implications for the WTO and for all of us, far beyond Indonesia’s host year.”

Punke noted that he had urged Geneva-based ambassadors to consult with capitals, conveying the depth of the current crisis while at the same time seeking new ways to contribute toward consensus.

“Today, we have the potential for our discussion to brighten prospects for the WTO,” he said.

Punke said the G-33 proposal on price supports for the purpose of public stockholding of agricultural products “is widely acknowledged — even by many G-33 members — as being outside the bounds of what is ‘doable’ on agriculture by Bali.”

“But more disturbingly, the proposal asks WTO members to sacrifice a primary discipline on agriculture subsidies from the Uruguay Round,” he said. “This would make Bali a step backward from the current disciplines of the WTO, from the principles that we have all agreed will benefit the broadest number of our citizens with more food through efficient and effective markets."

“No one in the WTO, and certainly not the United States, is saying that food security is not a legitimate concern, or that the Uruguay Round agreement does not already allow purchases for public stockholding,” Punke continued.

“What many in the WTO are saying is that this proposal, which would effectively lift limitations on trade-distortive purchases, is not the appropriate way to deal with it. And even if it were, the proposal presents issues that cannot be resolved in the Bali time frame.

Punke added that he considers the proposal essentially “a single-country proposal being promoted under the aegis of the G-33”— a veiled reference to India.

“Only two or three WTO members have explained how they could or would use this mechanism if made available,” Punke said. “The creation of a new loophole for trade-distorting practices, by contrast, would certainly have a negative effect on global prices and food security for a far broader swath of members, especially developing countries.”

Punke also said that there is a lack of consensus on trade facilitation, a WTO term for making borders and customs procedures easier and more efficient.