June 3, 2020
The Geneva Observer
This article is a modified version of our newsletter briefings sent out on Thursday May 14, 2020, Tuesday May 26, 2020, and Thursday June 2, 2020. Sign up to our newsletter to get our content a day early and straight in your inbox.
Following the announcement on 14 May that he would be leaving his post a year early (31 August 2020, rather than 31 August 2021), the race to replace Roberto Azevêdo at the head of the WTO is getting underway.
Nominations will be open between 8 June and 8 July. If there is more than one candidate, several rounds of consultations will try and whittle down the list until one is chosen by consensus.
At The Geneva Observer, we know that what happens here can have global implications. Nowhere is this more true than at the WTO. A symbol of both the good and evils of modern economic globalization, the WTO has been under constant attack from the superpower most active in its creation. It’s predicament embodies one of International Geneva’s current meta questions: how long can you not be a solution before you become part of the problem?
It was perhaps after pondering this very question that the WTO’s Director-General decided to leave his post a year early. The surprise announcement comes at a critical time, and the choice of his successor will have an impact on the future of an organization already in difficulty, of US-China trade relations (as we transition to the Asian Century), and the modalities of post-COVID-19 globalization throughout the world.
It’s not me, it’s you …
In comments characterised as ‘throwing in the towel’, but that we find refreshingly honest (the type of honesty only someone leaving their post ever shows), Azevêdo told Bloomberg: “If I stay here will the virus go away? The virus will not go away. If I stay here will the US and China all of a sudden shake hands and say, ‘OK, let bygones be bygones’? No, that is not going to happen. Nothing is going to change if I stay here.”
He continued: “I’m just leaving because, frankly, I think it’s the best thing for me, my family and the organization.”
Azevêdo wants to move out sooner rather than later so that the politically charged appointment process doesn’t completely derail the next biennial ministerial conference currently slated for June 2021. A meeting he thinks would be critical to the WTO in any case, but that is even more so coming in the post-COVID (and potentially post-Trump) world.
Moreover, he suggested that this was a good time to go as the pandemic has halted much of WTO’s work: “We are doing nothing now—no negotiations, everything is stuck. There’s nothing happening in terms of regular work.” The pandemic offers the WTO a window “to launch the selection process with less impact than usual on our work.”
Asked if his early departure would increase the perception of the WTO as a sinking ship, Azevêdo responded: “It may contribute to that … But it’s basically not true.” Adding: “The ship is not going down. This ship is sailing fine and what I am doing is giving the command of the ship to somebody else.”
“The ship is sailing fine” is a rather optimistic view of an organisation most would describe as ‘embattled’ at the very least. The WTO deals with the rules of trade between nations, facilitating global trade negotiations, removing trade barriers and enforcing multilateral trade rules, but it has been in severe difficulties for a number of years.
The process of decision making by consensus has meant that updating WTO rules is extremely difficult and large sways of modern trade fall outside of its rules (like services trade and digital trade, for example). Adding to this recent waves of nationalism, increased protectionism and further accusations, and it’s become in the minds of many a byword for the ills and excesses of modern economic hyper-globalization.
The Trump administration has repeatedly criticised the WTO, opting to bypass it and fight its trade wars directly with China rather than through the WTO thereby increasing tensions by taking the acrimony outside of the proper channels and mechanisms meant to solve them. At the same time, the US has also blocked any nomination of new judges to the WTO’s appellate body, leaving it without enough judges to sit, and leaving the WTO without a functioning dispute settlement mechanism.
Finding the next DG? It's definitely someones' turn, but whose?
As ever with the heads of international organisations, successions are also a matter of rotation. But while there is a tacit understanding that it is probably ‘someone’s turn’, that certainly doesn’t imply consensus on whose turn it is.
Succeeding the GATT, in which Switzerland played an important role with two swiss nationals at the helm, the WTO was set up in 1995. Since then, its Directors-General have been, in order, from Ireland, Italy, New Zealand, Thailand, France and Brazil; all male.
According to the Europeans, this shows the D-G appointments rotating on the ‘developed’/’less developed’ axis… According to several African states however, the rotation is geographical. In no way coincidentally, the European suggestion would mean the next D-G should be from the ‘developed world’ and, given the impossibility of a candidate put forward by the Trump administration, this would probably mean a European. Similarly, the African suggestion would imply the next leader should be from the African continent (no African has ever been at the head of WTO or of GATT, its predecessor).
Irish EU Trade Commissioner Phil Hogan has confirmed his interest in the post and is facing competition from well-known Geneva fixture—Arancha González Laya, Spain’s Minister for Foreign Affairs and the EU. From 2005, González Laya worked at the WTO as then-DG Pascal Lamy’s chief of staff, as well as WTO’s representative to the G20, before joining the International Trade Centre as executive director between 2013 and 2020. Reportedly, Dutch Trade Minister Sigrid Kaag is also in the running.
On the African side, Kenya’s former trade minister Amina Mohamed is once again up for the post, with competition from Yonov Frederick Agah (Nigerian WTO deputy DG), Hamid Mamdouh (Egyptian lawyer and former WTO official), and Eli Laourou (Benin’s Ambassador to the UN).