With the election of Brazil’s Roberto Azevedo as the next director-general of the World Trade Organization, it’s time to hope for a “Nixon goes to China” moment.
In 1972, President Nixon traveled to Communist China and met with Mao Zedong, marking a new and more productive phase for relations between the United States and China. It was also a diplomatic feat that only a political leader with Nixon’s anti-Communist credentials could have pulled off. Just about anybody else would have suffered dearly in the fallout.
Perhaps in the future, we’ll speak of “Azevedo goes to Geneva.”
That’s because the Brazilian, who will assume the position of Director General in September, may be just the person to revive the WTO at a turning point in its history.
Several commentators were quick to express skepticism about Azevedo. “Brazil has not been the most positive partner at the WTO,” said Ernesto Zedillo, former president of Mexico, in the Wall Street Journal. “Brazil doesn’t have the best credentials to lead the WTO. As a country that tends to be protectionist, it’s not a great champion of a multilateral trading system.”
The European Union favored a different candidate, Herminio Blanco of Mexico. The United States remained officially neutral, though many Americans also seemed to prefer Blanco over Azevedo because he helped negotiate the North American Free Trade Agreement.
Whereas Mexico appears to have embraced global free trade, Brazil recently has moved to protect its own favored industries, even though it already has one of the world’s lowest rates of trade to GDP.
Despite these concerns, Azevedo may have a tremendous upside: Developing countries trust him as a champion of their interests. This could prove important, because they’ve become an obstacle to completing a new multilateral trade agreement that improves the flow of goods and services around the world.
In 2001, the WTO launched the “Doha round” of world trade talks. Yet these negotiations quickly fell into a stalemate. For all practical purposes, Doha is dead–and it’s been dead for a long time.
Its failure springs from many sources and there’s plenty of blame to spread around. Yet developing nations may have presented the most significant hurdle. Many of them approached the talks looking for a handout, believing that wealthier countries should make concessions, almost out of charity. They didn’t seem to understand the importance of opening their own markets to competition–and that any successful agreement involves a give and take from both sides.
Brazil played a central role in all of this. As a result, many developing countries believe Azevedo will be an ally at the WTO.
And they may be right, though not in quite the way they expect. Rather than convincing wealthy nations to rethink their own Doha strategies, the main challenge for Azevedo will be to persuade developing countries to reconsider past approaches.
Success is essential. As Azevedo noted at a news conference last week, the WTO “is clearly stuck.” He must now get it unstuck–and it may take a figure with his special credibility among the leaders of developing nations to make it happen.
If the WTO doesn’t come unstuck, it will still serve the useful function of arbitrating disputes between its members. Yet it will have lost one of its chief purposes, which is to lower trade barriers.
It’s good to have big goals, but perhaps the WTO should think about playing small ball, at least for a short while. The Doha round was a swing for the fences. At this crucial juncture, however, it may be wiser to hope for a mere base hit–not a swing and a miss, but a solid knock that keeps the inning alive.
One idea may be to admit what everyone knows: Doha is dead, and it’s time to move on. Perhaps we need an entirely new round, with a new name.
That won’t magically change the geopolitical dynamics that caused WTO to reach its current impasse. Yet it could be an essential public-relations maneuver that revives global trade–and creates an opportunity for Azevedo to go to Geneva.
Dean Kleckner is Chairman Emeritus for Truth About Trade & Technology (www.truthabouttrade.org). Follow us: @TruthaboutTrade on Twitter / Truth About Trade & Technology on Facebook.