WTO Director-General Roberto Azevêdo after the Bali agreement was announced on December 7, 2013. Photo: Reuters
After becoming Director-General of the World Trade Organization (WTO) in September, Brazil’s Roberto Azevêdo took it upon himself to save the multilateral agency and its mission to reach a new set of global trade rules. He reversed the negotiation death-spiral that both the WTO and the Doha round of trade talks had been stuck in since the WTO was founded in 1995 by championing a package of acceptable interim trade reforms. Azevêdo’s capability to reinvigorate a multilateral institution that had lost much of its political and economic force was the subtle way the Director-General choose to present his credentials.
Azevêdo proved to have the disposition and willpower, or perhaps just the fresh face, to broker a deal between the WTO’s 159 disparate members. In Bali, on December 7, the WTO agreed to lower trade barriers by making it easier to transport goods around the world and lessen customs’ red tape. Estimated to add $1 trillion in trade to the global economy, the deal led Azevêdo to declare: “We have put the ‘world’ back into the World Trade Organization.”
It also opened the door to the possibility that the WTO can finally accomplish its barely alive Doha Round, launched in 2001. However, skeptics say the Bali agreement is just another step in killing off Doha for good.
While in the global trade world, the Bali agreement is rightly seen as a victory for Azevêdo and the WTO, it has a handful of lingering issues. First of all, the deal still needs to be ratified by two-thirds of member states, a process that is likely to take several years.
Second, while the Bali reforms are more beneficial for developing economies than earlier WTO proposals, there are big issues that have been left out of the agreement. Among those that are particularly contentious for developing nations: agricultural and non-agricultural market access; the highly distortionary agricultural support policies (aka subsidies) of the E.U. and U.S.; technology transfers; and aid-for-trade.
Third, as the WTO seeks to reinforce its centrality in the world’s trading system, the current trade tides are carrying countries towards regional and bilateral agreements, which are seen as easier to make beneficial for their economies.
Azevêdo is left stuck between a rock and a hard place. Especially threatening are the efforts of the largest economy in the world, the U.S. to strike two huge regional trade treaties: the 12-nation Trans-Pacific Partnership (TPP), which could be finished in the first months of 2014, and the Transatlantic Trade and Investment Partnership (TTIP) which would bring together the European Union and the U.S. in a free trade agreement.
A global trade deal was a daunting task but one that Azevêdo envisioned in the leading up to his appointment at the head of the Geneva-based WTO. As an insider — he had been Brazil’s ambassador to the WTO since 2008 — Azevêdo campaigned on the promise of continuity within the organization and of being more inclusive to developing countries. In a tight race he beat his regional colleague Herminio Blanco to succeed Pascal Lamy, who had held the position the organization since 2005.
While global trade brings growth and employment worldwide, Azevêdo sees success in pursuing modest achievable deals rather than grand global agreements. Bali, for one, was just that and a platform from which to build others, and perhaps even draw a conclusion of the Doha Round. If nothing else, Azevêdo has made the WTO — and himself — a player in the global economy again.
