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TRADE: WTO Leadership Race Now a North-South Contest

Gustavo Capdevila

GENEVA, May 9 2005 (IPS) - The final stage in the process of appointing a new World Trade Organisation (WTO) chief kicked off Monday with two candidates virtually from opposite ends of the world, in terms of both geography and level of development: Uruguay’s Carlos Pérez del Castillo and France’s Pascal Lamy.

The chair of the WTO General Council, Amina Mohamed of Kenya, began the process of consultations with representatives of the 148 WTO member states. She will be assisted by the chairs of the Dispute Settlement Body, Eirik Glenne of Norway, and the Trade Policy Review Body, Canadian Don Stephenson, who will act as facilitators.

The outcome of the selection process, to be announced by May 31, will determine the fate of the only major international economic or financial institution that is not currently subject to the political control of countries of the industrialised North.

The outgoing director-general of the WTO, whose term ends Aug. 31, is Supachai Panitchpakdi, an economist from Thailand.

In the meantime, the other two most influential international institutions are headed up by representatives of the industrialised world.

World Bank president James Wolfensohn of the United States will be handing over the reins on May 31 to another U.S. official, Paul Wolfowitz, while the managing director of the International Monetary Fund (IMF) is Rodrigo Rato, from Spain.

In the case of the multilateral trade system, in the entire time since the creation of the General Agreement on Tariffs and Trade (GATT) in 1947 through the history of its successor, the WTO, established in 1995, Supachai has been the only representative of the countries of the South to occupy the top leadership post, during his three-year term.

In view of this fact, Pérez del Castillo asked the representatives of the African WTO member states during a Monday meeting in Geneva, “Are we going to let the developed countries have a complete monopoly on conducting the destinies of three institutions? Is that the multilateral system we want to promote our interests?”

“I know it is not,” he declared.

The Uruguayan candidate will be staying in Geneva, where the WTO headquarters are located, until the leadership decision is announced, since he cannot afford to travel to other countries and campaign for support. On Tuesday, he will meet with representatives of the least developed WTO member countries.

For his part, Lamy flew to South Africa on Monday, and will head next to the Caribbean, to meet with ministers in a number of countries in that region. For the last three weeks, he has been serving as a special advisor to European Union Trade Commissioner Peter Mandelson of Britain; Lamy himself held this post from 1999 to 2004.

The Financial Times has speculated that Lamy’s designation to this advisory role is a way for the EU to provide support and funding for his WTO electoral campaign.

Lamy and Pérez del Castillo are the last remaining contenders for the organisation’s leadership, since the other two candidates were forced out of the race after receiving less backing from their fellow member states. The first to drop out was Luiz Felipe de Seixas Correa, the Brazilian representative to the WTO, followed by Jayen Cuttaree, the trade minister of Mauritius.

Cuttaree, caught up in a bitter dispute with Lamy, immediately announced that he would throw his support behind Pérez del Castillo and called on the developing countries, particularly those of Africa, to follow suit. For its part, the Brazilian government also stated last week that it was backing the Uruguayan candidate.

Mohamed told IPS that consultations with member states would continue through Thursday, but added that it was not certain if the process would conclude this week, or would need to be extended for several more days.

The consultations are aimed at identifying a candidate who can obtain consensus support. In accordance with the procedures established for the designation of a WTO director-general, it is only as a “last resort” that the decision can be reached through a vote – a mechanism practically alien to the organisation’s decision-making processes.

The first WTO director-general was Italian Renato Ruggiero (1995-1999). The election of his successor sparked a sharp division within the organisation, with the battle lines clearly drawn between the blocs representing the North and South. The dispute was resolved through the establishment of a six-year term shared between Mike Moore of New Zealand (who served from 1999 to 2002) and Supachai.

Candidates for the top WTO post are expected to have extensive experience in international relations, encompassing economic, trade and political affairs, as well as being committed to supporting the work and objectives of the organisation.

Pérez del Castillo is backed by an international relations career spanning over 30 years, much of it devoted to the concerns of developing countries, particularly in Africa and Latin America. During 2003 he served as chair of the WTO General Council, the body that directs the organisation in the periods between ministerial conferences.

While occupying this post, he earned the enmity of the Group of 20, an informal grouping of developing countries opposed to agricultural trade subsidies, for putting forward what these nations deemed a proposal that favoured the wealthy nations at the disastrous September 2003 ministerial conference in Cancún, Mexico.

For his part, Lamy was a staunch defender of European protectionist measures in agricultural trade during his time as EU trade commissioner.