May 25, 2005

Tomorrow's the big day

Tomorrow, the WTO General Council will almost certainly select Pascal Lamy to be its new Director-General, with a contract beginning on September 1.

Richard Waddington reports for Reuters: "New WTO chief Lamy will face daunting challenges" (May 25).

May 18, 2005

Lamy's supporters in the third round

The International Centre for Trade and Sustainable Development (ICTSD) weekly newsletter Bridges has a report on the end of the third round of the WTO Director-General selection process (Vol 9, #17, May 18).

The story isn't posted to the ICTSD web site yet.  Here is a selection from the email version of the newsletter. (The Subscription to this very helpful weekly newsletter on trade issues is free: "Bridges Weekly Trade Digest").

Lamy apparently had overwhelming support - in numbers, geographic representation, and among countries at different levels of development - in this third round:

...Lamy was the favourite of almost four-fifths of the WTO's 148 Member delegations, attracting support from not only the EU's 25 constituent Members, but also from many African, Caribbean, and Pacific (ACP) country Members, several of which receive trade preferences from the EU.  The latter group had initially backed the candidacy of Mauritian Foreign Affairs and Trade Minister Jaya Krishna Cuttaree, who withdrew from the DG race in April (see BRIDGES Weekly, 4 May 2005, http://www.ictsd.org/weekly/05-05-04/story3.htm).  Some prominent developing country Members including India, South Africa, and Thailand also chose Lamy over the representative from their G-20 counterpart, Uruguay...

...Costa Rica was the only country to express qualms at the 13 May meeting.  The head of the country's delegation said that some Members had reservations about Lamy's candidacy, and that these dissenting views had not been reflected in Mohamed's statement. Sources report that these countries are primarily Latin American banana producers that had opposed Lamy's efforts to replace the EU's banana import quotas with what they saw as an overly high specific 'per tonne' tariff. Nonetheless, facing pressure from other Members to join the consensus, Costa Rica said that it would not veto his appointment.

May 16, 2005

What now?

Carlos Perez del Castillo has withdrawn from the WTO Director-General selection process, leaving Pascal Lamy of France as the only one of the four candidates nominated in December (in accordance with the WTO's selection guidelines) still under consideration. 

The WTO's General Council will meet on May 26 to make its formal choice - by consensus.  If he's chosen, as he is likely to be, Lamy will take office on September 1.

Assuming Lamy is selected later this month, he and the WTO are entering a transition period:

  • Between now and December, Doha Round negotiations will be intense. In December the member nation trade ministers meet in Hong Kong. They need to have substantial agreement on the general principles of the agreement by that point.  The negotiations that must take place between now and December are difficult.
  • To keep on track, member states need a first cut of the agreement by this July.
  • Lamy's contract won't begin until September 1. By then, the July target will be a month in the past, and the negotiations for December should be substantially advanced.
  • The WTO Director-General does supervise the WTO secretariat, but otherwise he has mostly a moral authority. He has limited formal authority for the negotiations.
  • Lamy must choose four Deputy Directors-General.
  • For over half the time between now and the early December Hong Kong meetings, Dr. Supachai Panitchpakdi, of Thailand, will remain the WTO Director-General. Will Lamy have a significant role between now and September? How will he interact with Panitchpakdi? Will Panitchpakdi find a way to use Lamy's talents to advance the Doha Round negotiations?

The selection committee of three ambassadors was technically just facilitating a decision; only the member nations can make the decision, and they can be sensitive about this.  Although likely, Lamy's selection is not certain, as Peter Gallagher reminds us: "A crafted consensus on WTO leadership". 

Recognizing these sensitivities and uncertainties, Lamy declined to make statements in advance of his formal selection by the WTO General Council, at a meeting on May 26. As Bradley Klapper reported for the AP:

Elisabeth Perennou, his assistant at the Our Europe think tank, said Lamy told her Friday that he will only comment after the General Council makes its formal decision May 26.

"He wants to respect the procedures," she said by telephone. "He will not be making any declarations."

"Pascal Lamy Wins Race to Lead the WTO" (via Forbes, May 13).

Lamy was the EU's trade negotiator for five years. Will he be able to move beyond his former role as an advocate, shake off his former positions, and be an honest broker? He was a little coy about his thinking in these comments in Georgetown, Guyana: "Lamy cautious on EU agricultural subsidies " (Bangkok Post, May 16).

Pascal Lamy defended his support for agricultural subsidies for European farmers but said the post he won on Friday to head the World Trade Organisation will force him to think differently.

Mr Lamy, who is French, said his track record of defending EU farm subsidies during his five years as European Union trade commissioner is on record for all to see.

``That was in my past. At this time I move to a different position,'' he said in brief remarks to reporters after meeting with Caribbean trade and agriculture ministers in Georgetown, Guyana.

``How much of myself I leave in the previous position and how much of myself I take to the new position is a sort of kitchen secret which I am not ready to disclose totally,'' he said.

The Times reports on the Georgetown comments as well: "Lamy takes charge at 'medieval' WTO", adding, among other things:

M Lamy appeared ready to seek a consensus. "The question is whether agriculture has to be treated in the same way as shirts, shoes, tyres or coal remains open," M Lamy said.

"If you put to the membership of the WTO this question, you will have different answers. Some will say it has to be run exactly the same way. Others will say agriculture has its specificities and this has to be taken into account in the way you frame the rules of world trade.

"I have my own views, but what I will have to do when confirmed is to respect the diversity of members' views and try to broker this into some kind of consensus. What the US and the EU did last year in accepting zeroing of export support is something they had to do and the rest of the members were asking from them and this I believe is going in the right direction."

It's note clear to me if these Georgetown comments were made just before, or just after, Friday's announcement by the selection committee.

May 13, 2005

Looks Like it's Lamy

Bradley Klapper reports for the AP, that: "Pascal Lamy Wins Race to Lead the WTO" (via Washington Post, May 13). 

Pascal Lamy of France has won the race to lead the World Trade Organization and should be appointed later this month, the head of the selection panel said Friday.

Kenyan Ambassador Amina C. Mohamed told delegations at the 148-member WTO that she would recommend the governing General Council appoint Lamy as director-general starting Sept. 1...

"The preferences and the breadth of support provided a very clear picture of the will of the members in this final round of the selection process," Mohamed said, adding that Lamy is the candidate most likely to attract consensus...

Elisabeth Perennou, his assistant at the Our Europe think tank, said Lamy told her Friday that he will only comment after the General Council makes its formal decision May 26.

In an earlier story today, Klapper reported that Carlos Perez del Castillo had withdrawn from the WTO Director-General race, after a briefing (before the news was released to the WTO membership later in the day) on the results of the consultation from the head of the selection committee.

He said he had learned from Guillermo Valles Galmez, the Uruguayan ambassador to the Geneva-based WTO, that Lamy had the strongest support among the 148 members of the body that supervises global trade.

Valles Galmez had just met Kenyan Ambassador Amina C. Mohamed to learn the results of the polling she has been conducting as head of a three-member panel at the center of the selection process.

"Uruguayan Candidate Yields to Lamy on WTO", (via Washington Post, May 13.)

A Klapper story on Saturday quoted former WTO Director-General candidate Jaya Krishna Cuttaree of Mauritius, raising concerns about the lack of information provided during the selection process.  Klapper reports that (among other comments) "...Cuttaree criticized the selection process that chose Lamy because the panel keeps its criteria secret." ("Pascal Lamy Wins Race to Lead the WTO" (May 14).   

Note that no tabulations of survey information on national preferences is released during the selection process. While the selection committee polled the member nations to learn their preferences, they don't use a known formula for aggregating the information, and they do not release information about the numbers of countries supporting the candidates. The Brazilians raised concerns about this after the first round.

Richard Waddington reports for Reuters: "Lamy set for top WTO job, rival pulls out" (via Washington Post, May 13).  Waddington noted that this is, technically, not the end of the selection process:

"The recommendation of the three-person panel, led by Kenya's ambassador Amina Mohamed, will be announced to trade ambassadors at 1500 GMT. But a formal decision on whether to give the job to Lamy will only be taken on May 26...

Although theoretically some states could attempt to block a consensus decision to support Lamy at the council meeting in two weeks' time, diplomats said this was unlikely."

Elizabeth Becker reports for the New York Times: "Europe's Ex-Trade Commissioner Is Picked to Lead W.T.O.".

Alan Beattie and Frances Williams reported in the Financial Times: "Lamy's last rival for WTO post withdraws" (May 13).

Mr Lamy's strongest opponents - Latin American banana-growing countries such as Costa Rica, which suspect he favours their Caribbean competitors - signalled they would drop their objections. Barring a last-minute hitch, Mr Lamy will be confirmed within two weeks and will replace Supachai Panitchpakdi, the incumbent, in September.

Why did India back Lamy? India's Financial Express explains: "Not India’s first choice".

India supported Pascal Lamy in the last round of the race as opposed to Uruguay’s candidate Perez Del Castillo. However, New Delhi would have been much more comfortable with either Jaya Krishna Cuttaree from Mauritius or Luiz Felipe de Seixas Correa from Brazil at the DG’s post. India supported Mauritius in the first round, but shifted support shifted to Brazil in the second round when Mauritius got eliminated.

Government managers here say that the decision to support Lamy was taken because with the exit of Cuttaree and Correa, the fight ceased to be between developed and developing countries. Castillo’s strong right-wing credentials, seen in Cancun ministerial, also weighed on India.

A DG from a developing country that is sensitive to the needs of India would have been particularly helpful especially when members are trying their best to conclude the on-going Doha development round by the end of 2006.

India’s slight discomfort with Lamy as the future WTO DG is due to the fact that India was engaged in a number of bitter trade disputes with EU during Lamy’s tenure as the EU trade commissioner...

Here are some more stories about Lamy:  Paul Blustein "Frenchman Set to Assume WTO Leadership " (Washington Post, May 14); Alan Beattie, Raphael Minder, and Frances Williams report for the: "Lamy to head WTO as rival withdraws" ( Financial Times, May 14);  Ambrose Evans-Pritchard : "Champion of EU superstate nears finish line for world trade job" (Telegraph, May 14); Evelyn Iritani "European Chosen to Head WTO"

Revised during the course of May 13, 14, 16.

May 12, 2005

WTO Race Winds Down

The third and final round of WTO Director-General consultations ends today (May 12).

The three news stories that I've seen point to a Lamy victory.

India's Financial Express reports "Lamy hot favourite for WTO post " (May 13). The Express reports that both India and China have chosen to back Lamy rather than his opponent, Carlos Perez del Castillo (who is from a developing country).

Former EU Trade Commissioner Pascal Lamy is emerging as a favourite for the post of the director general (DG) of the World Trade Organisation (WTO) with both India and China backing him instead of the developing country candidate Perez Del Castillo from Uruguay.

Speaking to FE, commerce ministry officials said that with India’s favourites Jaya Krishna Cuttaree from Mauritius and Luiz Felipe de Seixas Correa from Brazil dropping out of the race, the contest for the DG’s post had ceased to be one between developed and developing countries. "Uruguay is not the kind of developing country which can relate to the concerns of developing countries and LDCs in other parts of the world. So, it makes no sense for us to back it just because it is a developing country," an official said.

This is a short, but interesting story.

Australia's Melbourne Herald Sun reports that "Lamy leads WTO race".

Richard Waddington reports for Reuters that "Lamy battles to retain lead as WTO race nears end". Waddington points out that this decision is not made by a majority vote, but by consensus:

Lamy, a French socialist, took first place in both of the first two rounds of soundings. But despite this advantage, some developing state diplomats said the battle was far from over.

The successful candidate had to be the one most likely to get "consensus," meaning objections also had to be taken into account, they said.

"It will not be a simple decision; there are objections to one of the candidates," said a diplomat from a developing country opposed to Lamy. "It is not just a matter of who has most votes. There are members that will have very serious difficulties in joining a consensus (on Lamy)," he added.

Alan Beattie points out that although the consultation is ending, "The result...may still not be conclusive if there are strong objections from countries to one candidate...: "Fresh Doha debate looms for new WTO head" (Financial Times, May 13).

Zee News: " End in sight for WTO leadership duel " (India, May 13)

May 11, 2005

Waiting, waiting....

While we're waiting for the WTO facilitators to finish the third round of Director-General consultations:

EUbusiness provides a short story on the status of the race: "EU's WTO candidate Lamy puts Doha talks as top priority: interview" (May 11).

At a summit in Brasilia, 34 Arab and South American countries endorse Carlos Perez del Castillo: Invertia " South America, Arabs, back Uruguayan WTO candidate " (May 11).

The Thai Commerce Minister announced that Thailand supports Pascal Lamy of France for Director-General of the WTO. The AP reports via Business Week: "Thailand supports Lamy for WTO chief".

Mercosur says "Uruguayan feels he may have the edge".

"Canada picks its choice for WTO Directorship". They just won't say who yet.

The facilitators should finish the consultations on Thursday, May 12, and announce the results shortly after.

May 09, 2005

The last round of the WTO DG race starts today

The third and final round of the WTO Director-General selection process began today. The last round pits Pascal Lamy of France against Carlos Perez del Castillo of Uruguay.

The consultations should end this coming Thursday (May 12), with the results announced in the next few days. The Associated Press reports ("WTO Chief Negotiations Said to End Soon ") via Forbes.

See also this report from Agence France-Presse via EUbusiness: "World trade body leadership contest enters final round"

Lamy, of France, formally has the support of the 25 EU member states.

Paris has pressed francophone African countries to swing behind him, according to diplomats, and he is set to tour the continent this week.

Perez del Castillo is formally backed by most Latin American countries and members of the Cairns Group of major farm exporters, including Australia and New.

Richard Waddington reports for Reuters (via Toronto Metronews): "Race for top WTO job enters last lap".

May 06, 2005

Brazil's WTO candidacy annoyed the Argentines

Raymond Colitt and Adam Thomson describe the series of aggravations that have estranged Brazil from Argentina in recent years, in the Financial Times story: "Love sours for Latin America's Romeo and Juliet" (May 6 - subscription required)

It didn't help when Brazil fielded its own candidate for WTO Director-General:

Brazil's insistence on launching its own candidate for the World Trade Organisation's top job, in detriment to Carlos Perez del Castillo, Uruguay's candidate, drove a further wedge between Brazil and Argentina. “It's not that we're dissatisfied over Brazil's protagonism, there was a concrete episode where we had different opinions the WTO candidacy,” Mr Bielsa said. [Bielsa is the Argentine foreign minister - Ben]

Colitt and Thomson note that the Brazilian foreign minister has since announced Brazil's support for Perez del Castillo.

May 05, 2005

Strategic voting in the WTO DG race

The Bridges Weekly Trade News Digest for May 4 reports on the results of the second round in the WTO Director-General selection process.

The text isn't posted to the web site yet (it should appear shortly at "BRIDGES Weekly Trade News Digest ").

The story covers the basic details of the round.  It has information on speculation about EU strategic voting that's not in some other stories on the round:

Cuttaree had enjoyed the support of the 56 African, Caribbean, and Pacific (ACP) Group WTO Member countries, and had reportedly finished ahead of Perez del Castillo in the first round of consultations. Trade sources report some Cuttaree supporters as suggesting that the EU's 25 WTO Members had expressed secondary support for Perez del Castillo in the expectation that the ACP countries, which receive preferential access to the EU market, would transfer their support to Lamy in the Mauritian's absence...

The third and final round begins next week (on May 9).

May 04, 2005

Relative strengths of Lamy and Perez del Castillo

Forbes magazine runs a column from Oxford Analytica on the WTO's Director-General selection process (April 4): Another WTO Director-General Candidate Withdraws.   

The authors review the  process so far, and discuss the significance of the Director-General position. 

They finish by looking at the relative strengths of the two remaining candidates:

Four key factors are likely to decide who is chosen as the next DG: experience, North-South disparities, affiliations and personality.

Both candidates are very experienced.  Perez del Castillo is from a developing country; this will count with the developing countries who believe the WTO DG should come from a developing country (this is the north-south issue). 

With respect to policy affiliations:

The candidates' affiliations regarding policy also hold weight. WTO activities and negotiations are governed by the WTO agreements and the mandate established by joint decisions of the member governments. A successful DG must respect this mandate and also remain neutral between the differing aspirations of member governments. Nevertheless, members want to know that their concerns are fully understood. On the important current issue of agricultural liberalization, Perez del Castillo is backed by the G20 countries, which want to go as far as possible while members on the defensive may be more comfortable with Lamy. Furthermore, many G90 countries may support Lamy since their key trading relationships are with the EU.

Lastly, the candidates' personality traits. Lamy is dynamic, tough (legendarily so when he was chief of staff to EU Commission President Jacques Delors), an effective negotiator and known to be dissatisfied with WTO working practices.

Perez del Castillo's election to the leading WTO chairmanships shows that other WTO members trust his judgement, neutrality and effectiveness. He has also already headed an international organization, the Latin American Economic System (SELA).

Lamy is marginally the favorite, as he is more likely to generate the impetus needed to conclude the Doha negotiations...

April 29, 2005

It looks like Lamy vs Pérez del Castillo

The results of the second round of WTO Director-General selection committee consultations were announced today (Friday, April 29).  Frenchman Pascal Lamy was the leader, followed by Uruguayan Carlos Pérez del Castillo. 

Mauritian Foreign Minister Jaya Krishna Cuttaree was third of the three candidates (least likely to generate a consensus), and dropped out of the contest.

Richard Waddington reports for Reuters that: "France's Lamy stays on track to win WTO race".   Waddington points to reports of "tactical" voting by the European nations:

    "Diplomats said Cuttaree lost out because many European Union states had put the Uruguayan, a widely-respected former head of the WTO's executive General Council, as their second choice, preferring a run-off against him to the Mauritian."

Warren Giles reports for Bloomberg that "Lamy's Bid for Top WTO Job Buoyed as Rival Eliminated ". Giles reports that the next round is to begin on May 9, and is expected to lead to a selection by May 31.

Sam Cage of the Associated Press reports that "Cuttaree pulls out of race to be WTO chief". (via San Luis Obispo Tribune)

Frances Williams reports in the Financial Times: "Lamy the frontrunner to become world trade chief" (April 29).

Apparently the second place decision between Cuttaree and Pérez del Castillo was very close.  What will happen now?:

    "European diplomats said the latest round of consultations confirmed that Mr Lamy not only had the most support, first and second preferences combined, but also the broadest spread of support.

    Mr Lamy, who is French, can now expect to pick up backing from many ACP countries that previously stood behind Mr Cuttaree. They are likely to be more wary of Mr Peréz del Castillo, who is from a country committed to liberal farm trade policies that could endanger their preferential trade with the EU and other industrialised nations.

    But Mr Peréz del Castillo claims significant support in Asia as well as a solid base in Latin America. "

Revised several times during April 29

April 28, 2005

Either Lamy or Pérez del Castillo

Last week, two former Mexican representatives to the WTO argued that either Pascal Lamy or Carlos Pérez del Castillo would make a good WTO Director General:

    "Political correctness should not guide WTO race

    By Angel Lopez Hoher and Eduardo Perez Motta

    Published: April 23 2005 03:00 | Last updated: April 23 2005 03:00

    From Mr Eduardo Pérez Motta and Mr Angel López Hoher.

    Sir,

    As the race to succeed Supachai Panitchpakdi as director-general of the World Trade Organisation enters its final phase, it is important to take a step back to ponder what would be best for the organisation as a whole.

    In an article on the importance of choosing the heads of international organisations, Martin Wolf suggested that the next director-general needed to be "someone able to sell [the WTO's] mission, understand the detail and, where necessary, reach out to the governments on which agreements depend". To these criteria we would like to add two that should be obvious (but are not always): that the director-general has to be perceived as an honest broker, and needs to be someone who believes in free trade.

    We believe, unencumbered by the responsibility of trade-related public office, that both Pascal Lamy and Carlos Pérez del Castillo fulfil these criteria - each with an emphasis on different traits.

    The list of candidates has shrunk to three men. A choice will soon have to be made between them, to avoid repeating the unsavoury and debilitating experience of last time. It would be heartening if, for this choice, WTO members were guided not by regional or political considerations, but by the candidates' personal record and the work programme they have laid out before the General Council.

    In its hour of need - and this surely qualifies as such - the WTO should be headed by the best man, not by the most politically correct or the one least threatening to any member's position."

Letter to the editor of the Financial Times, published April 23. The Times noted that "Eduardo Pérez Motta, Former Ambassador of Mexico to the WTO Angel López Hoher, Former Deputy Permanent Representative of Mexico to the WTO").

Is it down to Lamy or Cuttaree?

Richard Waddington reports for Reuters South Africa that, as the second round of the WTO selection process comes to a close, it looks like French candidate Pascal Lamy, and Mauritian candidate Jaya Krishna Cuttaree are the leading candidates: "Lamy, Mauritian minister look set for WTO duel".

    "France's Pascal Lamy and Mauritian Foreign Minister Jaya Krishna Cuttaree seemed in pole position to head the World Trade Organisation (WTO) after the latest soundings of members' views, diplomats said on Wednesday.

    As the penultimate round of consultations drew to a close, Uruguay's former trade envoy Carlos Perez del Castillo, the only other contender, appeared to be trailing and was expected to have to drop out of the race, they said...

    ...However, some diplomats warned there could be a surprise given the complexity of the selection process, with the degree of opposition to a candidate also having to be weighed in addition to the support he receives..."

April 24, 2005

Is the WTO DG selection process transparent enough?

D Ravi Kanth reports that a "Divisive race starts for the top job " in the WTO (Deccan Herald of Bangalore, April 25).

This is an interesting column, treating several topics.  I'm going to focus on comments on the concerns raised about the "transparency" of the WTO Director-General selection process:

    " India and China, however, expressed concerns about lack of transparency in the selection process. The two countries supported the Brazilian demand that figures ought to have been indicated so that the losing candidate knew why he is being asked to leave. India's senior trade negotiator Gopal Pillai told Deccan Herald, “We didn't question the process but we feel there has to be greater transparency.”

    The WTO’s powerful General Council chairperson Ambassador Amina Mohamed turned down the Brazilian request for figures saying that she is not bound to reveal the confidential information shared by the members during confessions.

    The problem with the selection process is that there are no white and black rules. Rules framed in 2002 allow the triumvirate — the chairs of the General Council, the dispute settlement body, and the trade policy division — to arrive at a result based on their assessment. That assessment is based on geographical support-spread, preference for candidates from the industrialised, developing, and least-developed countries and so on. “I went by the rulebook,” Ambassador Amina Mohamed told Deccan Herald .

    But some countries strongly feel that the losing candidate at each round has to be justified by a clear explanation as to why he is being asked to vacate. “If you choose to not reveal figures as demanded by Brazil, why did the GC chair announce rankings among the candidates making it look so and so is the winner,” said an Asian trade envoy. “Obviously, she wants to tilt the balance in favour of one candidate,” the envoy argued, refusing to disclose the name of that one candidate..."

How Does New Zealand see the WTO DG Race?

Fran O'Sullivan, an Assistant Editor with the New Zealand Herald surveys the three remaining candidates, and reports on the thoughts of NZ Trade Negotiations Minister Jim Sutton: "Search for a WTO leader"

Who will NZ support:

Pascal Lamy:

"Trade Negotiations Minister Jim Sutton concedes Lamy has strong credentials for the top job and admires his undoubted Gallic charm.

But Sutton is also critical of the EU's protectionist approach to agriculture.

Like his Australian counterpart, Mark Vaile - who as far back as December said Lamy's campaign was unofficially being run by then US Trade Representative Bob Zoellick - Sutton would prefer a more obvious free-marketer in the job."

Carlos Perez del Castillo:

"Perez del Castillo is openly backed by New Zealand, Australia and other members of the Cairns group of agricultural exporting nations.

Trade Negotiations Minister Jim Sutton expects him to be in the final round."

Jaya Krishna Cuttaree:

"Trade Negotiations Minister Jim Sutton wants Perez del Castillo. But if the Uruguayan drops out after this conclave, as Cuttaree suggests, New Zealand is expected to fold its vote in Lamy's favour on the grounds of sheer managerial competence to get the Doha Round completed. "

April 22, 2005

Cuttaree visited Europe this week

Stefania Bianchi reports that: "Lamy Pulls Ahead in WTO Leadership Race".

But the real purpose of the story seems to be to report on Mauritian Foreign Minister Jaya Krishna Cuttaree's (one of Lamy's two competitors) meeting with EU parliamentarians earlier this week.

Who will Brazil support now?

Mario Osava (for Inter Press Service News Agency) wonders who Brazil will support, now that its candidate Luiz Felipe de Seixas Correa is out of the running for WTO Director-General. 

This is part of a longer piece on recent Brazilian foreign policy setbacks.   Osava describes Seixas Correa's required withdrawal as the "biggest" of several recent foreign policy "blows" absorbed by Brazil.   Then:

    "...Up until now, Brazil has enjoyed considerable influence in the WTO, which makes the fact that this was the setting for such a crushing foreign relations setback especially surprising. Lamy and Cuttaree are both defenders of agricultural subsidies, which have always been the main target of Brazil's battles in the WTO.

    Given that Brazil's own candidate is now out of the running, its backing in future rounds of voting should logically pass to Pérez de Castillo -- whose candidacy was upheld by the new leftist government that took office in Uruguay on Mar. 1 -- as a representative of Mercosur, who also has the support of Argentina (Paraguay is the fourth full member of this bloc).

    But backing the Uruguayan candidate will be a bitter pill to swallow for Brazil, which put forward its own candidate, Seixas Correa, precisely as a means of opposing Pérez Castillo, whom it accused of having presented a proposal that ”favoured the wealthy countries” in September 2003, as chairman of the WTO General Council.

    Pérez del Castillo's proposal, submitted to the WTO ministerial conference in Cancún, Mexico, was rejected by the majority of developing countries, with the end result being a breakdown in negotiations.

    Nevertheless, refusing to support the Uruguayan candidate is not a viable alternative either, since it would weaken Brazil's position as one of the coordinators of the so-called Group of 20, an alliance of countries -- of which Uruguay is also a member -- opposed to the agricultural subsidies implemented by industrialised nations, to the detriment of the developing world..."

This is an interesting article, placing Seixas Correa's candidacy in a wider political context. The Director-General selection isn't taking place in a vacuum. External events (the choice of a World Bank president) affect it, and it has implications for other things:

    "This does not bode well for Brazil's aspirations to U.N. Security Council permanent membership, while threatening its role as a leader or major player in a variety of political and trade negotiations, ranging from the forging of closer ties between South America and Africa and the Arab world to the Doha Round of negotiations in the WTO, initiated in November 2001."

Revised April 22. This was originally titled "A Brazilian Diplomatic Defeat" following the thrust of the Osava article. My interest is somewhat different, and I've retitled the post to reflect that.

April 21, 2005

Will India support Cuttaree for WTO DG?

The Business Standard of India passes on comments from an unnamed Indian official, who says that India will support Mauritian Foreign Minister Jaya Krishna Cuttaree for Director-General of the WTO.

The official indicates that India had supported the Brazilian candidate, Luiz Felipe de Seixas Corrêa, in the first round.  Seixas Corrêa had to withdraw last week, after the selection committee indicated that its survey suggested he was least likely of the four candidates to generate a consensus.

    "Brazil was India’s first choice followed by Mauritius,” an official said adding India’s support for Mauritius was in step with New Delhi’s close strategic and political ties with the island nation."

The story reports that "According to sources, the European Union appears to have voted strategically in the first round to oust Brazil from the race." But doesn't explain what this might mean.

"India backs Mauritius for WTO post".

    April 20, 2005

    More details on the first round of WTO DG consultations

    The April 20 issue of the Bridges Weekly Trade News Digest (published by the published by the International Centre for Trade and Sustainable Development) has a detailed report on the results of the first round of WTO Director-General consulations - with information on the number of countries identifying candidates as their first or second choices.

    Here's the text of this story:

      "DG RACE: SEIXAS OUT, LAMY 'ENJOYED HIGHEST LEVEL OF SUPPORT'

      Brazilian WTO Ambassador Luiz Felipe de Seixas Correa has become the first candidate to withdraw from the race to succeed Director-General Supachai Panitchpakdi. WTO General Council Chair Ambassador Amina Chawahir Mohamed of Kenya reported on the first round of the selection process she is leading to an informal 15 April meeting of heads of Member delegations, describing Seixas Correa as "the candidate least likely to attract consensus."

      The three remaining candidates are former EU Trade Commissioner Pascal Lamy of France, Mauritian Trade Minister Jaya Krishna Cuttaree, and former Uruguayan WTO Ambassador Carlos Perez del Castillo. Of the three, Mohamed told delegates that Lamy "enjoyed the highest level of support" among the 142 of the 148 WTO Members that took part in the consultations, followed by Cuttaree and then Perez del Castillo. She did not specify the level of support for each candidate.

      Trade sources, however, report that 60 Members reported a first preference for the Mauritian, compared to 40 for Lamy and 24 for Perez del Castillo. Fewer than ten said Seixas Correa was their candidate of choice. However, Lamy dominated second preferences among Members that made them known, with the support of over 40 delegations.

      Mohamed did tell delegates that "a very small number of Members expressed concern" over Lamy's ability to head the WTO, which could potentially affect his ability to become the most likely consensus candidate. She also announced that she would start a new round of consultations -- during which preferences voiced during the first round will no longer be valid -- on 21 April.

      Mohamed is assisted in these consultations by Dispute Settlement Body Chair Ambassador Eirik Glenne of Norway and Trade Policy Review Body Chair Ambassador Don Stephenson of Canada. A General Council meeting has been scheduled for 26-27 May to formally approve Supachai's successor. The next Director-General's four-year term will start 1 September.

      For more on the Director-General selection process, see BRIDGES Weekly, 26 January 2005, http://www.ictsd.org/weekly/05-01-26/story1.htm.

      ICTSD reporting; "Lamy ahead in WTO race, Brazil knocked out," REUTERS, 15 April 2005; "Brazilian Candidate Eliminated From WTO Leadership Race; Lamy Faces Veto Threat," WTO REPORTER, 18 April 2005."

    Here's the web page for this useful newsletter: "BRIDGES Weekly Trade News Digest ". The April 20 issue is not posted yet.

    The April 19 newsletter of the Trade Law Center for Southern Africa newsletter (Tralac) also has a short story on the results of the first consultations:

      "Brazil out of race for WTO Director General Topic: C - Ongoing Trade Negotiations - WTO Author: tralac Published: 19/04/2005 Region: WTO

      --------- World Trade Oragnisation (WTO) members are considering which candidate is to replace Supachai Panitchpakdi as Director General of the organisation in August this year. On Friday last week, General Council Chairwoman, Amina Chawahir Mohamed, asked Brazil?s candidate, Felipe de Seixas Correa, to withdraw as he has the least support of the four potential candidates.

      Brazil asked for time to assess the situation, but Mohamed refused, saying that the next round of consultations is due to start on April 21st. The new Director General has to assume his post by the end of August.

      The three remaining candidates, all said to have good support, are

      Pascal Lamy, former European Union Trade Commissioner, Jaya Krishna Cuttaree of Mauritius, and Carlos Perez del Castillo of Uruguay. Each candidate has presented himself as interested in promoting the needs of developing countries, but the term developing countries incorporates nations as diverse as Brazil, Rwanda and Dominica: each completely different in outlook, status and resources.

      Source: tralac http://www.tralac.org/scripts/content.php?id=3567"

    This is another useful newsletter, which may be found here: "tralac Newsletter".

    April 19, 2005

    Cuttaree feels good about the WTO DG race

    Nathalie Alphonse reports that Mauritian Foreign Minister, and WTO Director-General candidate, Jaya Krishna Cuttaree, is speaking to EU Parliamentarians today, on his vision for the WTO: "Jayen Cuttaree is over the first hurdle" (l'express of Port-Louis, Mauritius, April 19). 

    Alphonse also reports that the WTO selection committee will start its next round of consultations with member-state ambassadors on April 25  (other reports suggest it will start on Thursday, April 21).  A second candidate will be expected to drop out after this round.

    Cuttaree, who was second in the early-to-mid April consultation, sees the race as one between France's Pascal Lamy, and himself: "Two-horse race seen for WTO post, EU vs Mauritius" (Reuters, April 19).

      "The battle to head the World Trade Organisation will be a two-horse race between Europe and Mauritius after Uruguay drops out, the Indian Ocean island's candidate for the top post said on Tuesday...

      Mauritian Trade Minister Jaya Krishna Cuttaree said Uruguay's nominee Carlos Perez del Castillo, its former envoy to the WTO, would be eliminated in the next round on April 25.

      "The Uruguayan candidate is far behind Lamy and myself," Cuttaree told reporters in Brussels on the margins of a meeting with the European Parliament trade committee.

      "It would be logical to expect that Castillo moves out in the next round." "

    Meanwhile, speaking to a group of French economics and financial reporters, "Lamy says support for his WTO candidacy extends beyond developed nations". (but the report doesn't say that he went into any details) - via EU Business, April 19.

    Revised 4-20 with new information on start date for second round of consultations.

    April 18, 2005

    Brazilian objections to Pérez del Castillo

    Until this weekend, there were two Latin American candidates in the WTO Director-General race, a Brazilian and a Uruguayan. 

    This MercoPress story, on the results of last week's announcement of the results of the first round of consultations, mentions Brazilian objections to Uruguayan candidate Carlos Pérez del Castillo, and has some a short reaction from Pérez del Castillo: "EU candidate closer to becoming WTO head".

      "Mr. Pérez del Castillo has been repeatedly accused by Brazilian officials of having favoured the rich countries in the Cancun October 2003 negotiations when he was president of the WTO General Council.

      “Criticism is unfair and unfounded”, said the Uruguayan candidate who anticipated that if he is finally chosen he will coordinate WTO activities with the International Monetary Fund and the World Bank.

      “The Doha round, multilateralism and international trade are top of my agenda to as to ensure joint solutions for the world’s poor countries”, added Mr. Perez del Castillo who rebuked Brazilian criticisms arguing that the “agricultural countries supposedly affected by the Cancun document are the supporters of my candidacy”.

      Furthermore he argued that it’s useless for poor countries to have access to rich markets if they don’t have the funds or the means to solve other problems such as a competitive supply, “that is why I believe in a close coordination with the IMF and WB”. "

    Seixas Corrêa withdraws

    On Friday, the team surveying WTO members about their preferences for a new Director-General, announced that the person least likely to attract a consensus was Brazilian Luiz Felipe de Seixas Corrêa. Early reports indicated that the Brazilians wanted some time to get more information on the consultation, before withdrawing Seixas Corrêa's candidacy.

    Monday's Bangkok Post reports the Brazilian foreign minister has announced the Seixas Corrêa's withdrawal: "Brazil withdraws WTO candidate, Lamy still front-runner".

      "Brazil has withdrawn its choice to lead the World Trade Organisation but has not decided whom to support from the remaining field of threes, according to Foreign Minister Celso Amorim.

      Mr Amorim announced the decision to discontinue the candidacy of Brazilian WTO ambassador Luiz Felipe de Seixas Correa, a day after France's Pascal Lamy, the European Union's pick to head the 148-nation WTO, visited Sao Paulo...

      ...Mr Amorim criticised the way the selection takes place, saying countries should be given more information when their candidates fail to win enough support.

      ``It's one thing to have confidentiality, not saying who voted for whom, that's natural,'' he said. ``It's another thing not to give out the numbers.''

    The Brazilian foreign minister did not indicate which of the remaining candidates would get Brazil's support. China had supported Seixas Corrêa, and will now be looking for a new candidate.

    Alan Beattie reported on the post-Seixas Corrêa environment in today's Financial Times"Lamy takes narrow lead in race for top WTO job". The new round of consultations is to begin this week. France's Pascal Lamy is the favorite. Here are the odds according to the UK bookmaker Ladbrokes:

      "The odds against Mr Lamy, previously second favourite, shortened to 11-10. Carlos Pérez del Castillo, the Uruguayan former WTO envoy who used to chair the WTO's general council, was behind Mr Lamy at 5-4. Jaya Krishna Cuttaree, Mauritian foreign minister, was 8-1."

    P.S. April 19: I originally thought that Brazil waited a day or so before announcing the withdrawl of Seixas Corrêa, in order to learm more about the results of the consulation - which were not described in a lot of detail by the selection committee. However, this AP story, indicates that he withdrew later on Friday: "Brazil withdraws candidate to lead WTO but hasn't decided whom to support " (via Jamaica Observer, April 17).

    April 16, 2005

    Seixas Correa asked to drop out; Lamy in the Lead

    The WTO selection panel, which completed its first round of consultations with the national delegations on Wednesday, announced Friday (April 15) that Brazilian candidate Luiz Felipe Seixas Correa had the least support, and that French candidate Pascal Lamy had the most.

    Richard Waddington reports: "Lamy ahead in WTO race, Brazil knocked out" (Reuters, April 16). Agence France Presse reports here: "France's Lamy top candidate for WTO chief post" (via Channel NewsAsia, April 16).

    Seixas Correa will now be expected to drop out.

    MercoPress reports that Brazil has "Brazil requested a few more days to consider its position." ("EU candidate closer to becoming WTO head").  Prensa Latina out of Havana, reports "Brazil Criticizes Lack of Transparency in WTO Elections". The Associated Press reports that Brazil has asked for more information on the decision by the selection committee: "Lamy favored in race to lead WTO " (via International Herald Tribune, April 16)

      "Under WTO rules Seixas Corrêa would be expected to withdraw his candidacy, but Brazil's delegation asked for more time to consider its position and requested more information on backing for its candidate."

    The WTO selection committee ranked Mauritian Foreign Minister Jaya Krishna Cuttaree second, after Lamy, and former Uruguayan Carlos Perez del Castillo third. Assuming that Seixas Correa does drop out, a lot now depends on where Seixas Correa's support goes.

    April 13, 2005

    Pascal Lamy talks about his WTO DG candidacy (in French)

    Pascal Lamy talks about his candidacy for director-General of  the WTO with Pascal Airault, on March 27, 2005:

    Candidat à la Direction Générale de l’OMC, l’ex-commissaire européen au Commerce se dit fondamentalement attaché au multilatéralisme. Article publié dans "Jeune Afrique / L’Intelligent. Only in French

    Lamy is President of the think tank, Notre Europe.

    The end of the line for one of the WTO DG candidates

    Through early April, three ambassadors to the WTO have been quietly surveying their peers, trying to gauge the depth and breadth of support for, and the strength of the opposition to, each of the four candidates for WTO Director-General.   

    They finished their survey today (Wednesday, April 13).  Now they'll think it over for a couple of days, and then they will try to decide which of the four has the least, and weakest, support, which faces the strongest opposition.  Once they give their opinion, one of the candidates will be expected to withdraw.

    Richard Waddington reports for Reuters: WTO Heads For First "Conclave" (April 14).

      "...The decision on who falls at the first hurdle is complicated by the fact the selection panel, which also includes Canadian ambassador Don Stephenson and Norway's Eiric Glenne [as well as Kenyan ambassador, and General Council Chair, Amina Mohamed - Ben], cannot simply tot up votes.

      Because the aim is to find a consensus candidate, they must also take account of how widely support is spread across the various regions and how much opposition a candidate faces..."

     

    April 12, 2005

    Cuttaree says he's going to win

    Mauritian Foreign Minister Jaya Krishna Cuttaree is home after a campaign trip to Geneva, expressing confidence he'll survive the first round of WTO Director-General consulations.

    Pauline  Etienne reports in l'express.

    The OAS Secretary-General

    The Financial Times reports that the Organization of American States (OAS) failed to elect a new Secretary-General Monday (April 11), after four hours of voting.  A new election is scheduled for May 2: "OAS members fail to elect a new leader".

    The candidate backed by the U.S. bowed out on Friday, after failing to get enough support: "OAS race comes to head today". 

      "The withdrawal from the race of Francisco Flores, the candidate who was backed by the US, means that Latin American influence over a body traditionally dominated by Washington is likely to increase."

    Here's another sign, in addition to the Papal and WTO races, of the changing balance of influence between developed, and developing, countries.  "The Pope and the WTO Director-General".

    April 11, 2005

    The Pope and the WTO Director-General

    Martin Walker points to a similarity between the upcoming Papal election and the ongoing WTO Director-General selection process: the developing world is asserting its claims to both positions more strongly than ever before: ("The Pope Quota", Foreign Policy, April 2005, free registration required)

      "At first glance, the hushed deliberations of the 117 Roman Catholic cardinals who will elect the next pope don’t have much in common with the diplomatic jostling over the leadership of the World Trade Organization (WTO). Yet in both  cases, the traditional right of Europeans to lead international institutions—sacred   and profane—is under fire..."

      "...It is becoming clear that the governments of the approximately 150 countries that call themselves the developing world are no longer prepared to let the 30-odd rich nations dominate the top jobs..."

    One disturbing consequence:

      In practice, the rebellion against the rich means that many critical international institutions may soon have an informal quota system—a mixed blessing at best. The post of secretary-general of the United Nations has passed from one continent to another for decades now. Kofi Annan represents Africa’s turn at the helm. Before him was Boutros Boutros-Ghali, who represented the Arab world; Javier Pérez de Cuéllar of South America; the European Kurt Waldheim; and Burma’s U Thant. (Rumor has it that it will be Asia’s turn again when Annan’s term ends.) Reviewing this list, it must be said that the United Nations’ unwritten rule of quotas has not produced many outstanding figures."

    April 10, 2005

    What Lamy said about the Amazon

    In an interesting article on Brazilian contingency planning for the defense of the Amazon, Angus MacSwan cites comments by European Union WTO candidate Pascal Lamy: "Brazilian Army Worries Foreign Powers May Eye Amazon". (Reuters, April 10)

      "The perceived threat that lurks at the back of many Brazilians' minds is that outsiders covet the Amazon, a fear fanned whenever a foreign politician talks about the forest and its waters as an international resource.

      Indeed, former EU Trade Commissioner Pascal Lamy, now a candidate to head the World Trade Organization, in February proposed the Amazon should designated "global public goods" and be administered by the international community -- a proposal that drew a sharp rebuke from Brazilian government."

    I don't have a transcript of Lamy's remarks, and I don't know the context in which he made them.

    April 07, 2005

    Does the WTO Director-General Race Matter Very Much?

    Not very much, says Peter Gallagher:

    "The appointment of WTO’s Director General deserves yawns outside Geneva. It’s a spat for diplomats, not a policy decision. The Director-General unlike, say, the Pope or the President of the World Bank is not in charge, is not infallible and cannot even change much."

    The WTO DG Race and the Doha Round

    Australian Trade Minister Mark Vaile reiterates Australian support for WTO Director-General candidate, Uruguayan diplomat Carlos Perez del Castillo, and warns against letting, "continuing international divisions over the director-generalship of the WTO could become a "major distraction" " and allowing them to "seriously put in jeopardy the chances of concluding the (Doha) round".":

    Link: "Vaile warns of WTO row" (The Australian April 8).

    What Are the Implications of a Lamy WTO Victory?

    As part of a gloomy review of trade developments, Irwin M. Stelzer describes the implications of a Pascal Lamy victory in the WTO Director-General race: "Free Trade?" (Truth about Trade & Technology, April 6):

      "The Europeans and the developing nations profess horror at the appointment of Paul Wolfowitz to head the World Bank. They say he doesn't know anything about development, but really worry that he knows too much: that loans to undemocratic kleptocracies might fatten Swiss bank accounts, but do little to fatten starving citizens of so-called developing countries.

      But Gerhard Schr�der and his friends were reluctant to oppose the Wolfowitz appointment, lest they appear to be snubbing President Bush's recent friendly overtures. So they approved the appointment, and will seek a quid pro quo--the appointment of France's Pascal Lamy to fill the vacancy at the head of the World Trade Organization. Lamy is dedicated to the maintenance of the European Union's protectionist agricultural policy, which further enriches well-off French farmers at the expense of poor farmers in developing nations. If he is appointed, and spurns Bush's proposal to end both E.U. and U.S. export-inducing farm subsidies, the Doha round is doomed."

    Cuttaree to speak in DC

    Cuttaree to speak in DC

    Mauritian Foreign Minister Jaya Krishna Cuttaree will speak at the National Press Club on April 20: Jaya Krishna Cuttaree to Discuss 'Trade and Development: A Vision for a Better WTO' (U.S. Newswire, April 7)

    April 05, 2005

    What Does Jaya Krishna Cuttaree Think?

    Jaya Krishna Cuttaree, the Foreign and Trade Minister of Mauritius, is one of the four candidates for Director-General of the World Trade Organization (WTO).

    Here is a favorable profile from the Inter Press Service of Johannesburg, March 10, by Stefania Bianchi, "Trade: Poor Countries' Man Makes a Strong Case", and here is his biography from the WTO web site: "Jaya Krishna Cuttaree".

    Mauritius is a small island country in the Indian Ocean. A well governed democracy, it's had a remarkably good growth record. For some background, look at this article by Arvind Subramanian from the IMF magazine, Finance & Development: "Mauritius: A Case Study".

    Cuttaree's candidacy has been endorsed by the African-Caribbean-Pacific (ACP) grouping of countries. This is a group of smaller developing countries with historical colonial ties to Europe; they benefit from European tariff preferences (tariff breaks).

    In this post I've culled selections from a few of Cuttaree's speeches, to get a better idea of some of the things he stands for. The starting point for this post is a speech he gave to the Mauritius Chamber of Commerce and Industry this past March.

    In this speech, he points to the importance of trade to developing countries, points to the problems many of these countries may have in taking advantage of trading opportunities that may open up to them, and argues for the importance of various measures to help them out. I've used other speeches to flesh out some of his points, and to shed light on his negotiating philosophy.

    Trade is important to developing countries

    In the Chamber speech, he explained the importance of trade to developing country growth.

    He argues that trade isn't an end in itself, but promotes the underlying objective of better living conditions. From the point of view of the developing world, trade is one of several factors, which also include aid and debt-relief, for achieving sustainable development.

    However, trade is the most important of these factors: "Trade can be a catalyst in developing a country's productive capacity and growth and lift millions out of poverty and the shackles of marginalisation."

    So trade is extremely important to developing countries. The development of a rules-based trading system through the WTO may be more important to smaller developing countries, than to developed countries, or larger developing countries,

      "�an effective and equitable multilateral trading system is in the general interest of every Member. But it is even more vital for us, weak and vulnerable developing countries which have very little economic clout in the world economy. The major players have the option of negotiating bilateral FTA�s and choose those with whom they want to deepen integration. We do not have such options. Only a rule-based trading system will offer the best protection to the rights of small players� (quoting himself from an earlier speech)

    Developing countries may need special help to take advantage of trade opportunities

    In the same speech, he pointed out that more liberal trading rules will only help countries that have something to trade. Many developing countries, especially small ones, need help here. They can't "produce competitively"; they face "supply side constraints."

    On January 26, after addressing the WTO General Council, he participated in a question and answer session sponsored by a group of NGOs. One of his answers, summarized by session organizers ("Minutes of Civil Society Hearing for WTO Director-General Candidates"), gives a better sense of the "supply constraint" issue. It also indicates that some developing countries have more difficulty with supply contraints than others:

      "However one also has to be extremely careful about proposing liberalization of agriculture trade. Because when people talk of developing countries producing more agriculture products if trade liberalized we make a fundamental mistake because developing countries are not a homogenous group. You take a country like Brazil and Mali, both developing countries, however capacity to produce to take account of increased market access are completely different. Africa lives off agriculture. Mostly peasant farmers, and those proponents of liberalized agricultural trade use Africa as an example of a continent which can benefit from increased market access. He says there is a big flaw in that statement because of the capacity to produce competitively in Africa. No roads, ports, refrigeration, SPS problems. Unless these supply side constraints are actually addressed the liberalization of markets in agricultural products is going to benefit a certain number of countries and certainly not the majority of people who we think are going to benefit from that liberalisation...He can see very easily in the case of poultry some large developing countries killing the poultry industry in many parts of Africa."

    While small developing countries may need help with supply constraints, he says in his Chamber speech that, "...it is not WTO's role to address supply side constraints." The WTO does have a "duty to raise awareness of the problem..." and it is "imperative" to encourage meetings between the heads of WTO, the World Bank (WB), and the IMF, to encourage "collaboration" and program coherence. In the NGO session described above, he went on to discuss the role of the WTO, and that of other multilateral organizations, in addressing these supply constraints. From the minutes:

      "This is why he says that if you are looking at the liberalization of agriculture trade you must have a coherence between market access and capacity to produce, to have coherence between the WTO and institutions like the WB and development partners like the EU to ensure that the resources are there to build the capacity of these countries in Africa to be able to take account of this access..."

    Special and differential treatment for developing countries

    In the Chamber speech, he notes that countries differ, and the WTO should address the distinctive needs of developing countries. These countries need special and differential (S&D) treatment within multilateral WTO trade treaties.

    S&D means more than "a system where developing countries were simply given more time to adapt to negotiated trade rules through temporary exceptions and exemptions." "Temporary exceptions and exemptions" could be things like slower implementation of tariff reductions.

    Affirmative and longer term action is necessary. Measures are needed, "to establish rules that can foster development and to come up with measures that will enable developing countries to implement these rules and to reap the benefits of further trade liberalisation."

    Examples of of these additional measures may be inferred from these Cuttaree remarks, from 2002, ("Rules Issues and Special and Differential Treatment"):

      "There are several instances where the WTO Agreements impose onerous obligations upon developing countries and restrict them from taking initiatives and measures to achieve industrial development (e.g. Subsidies, TRIMs and TRIPS).

      The Agreement on Subsidies curtails the right of developing countries to extend assistance and support for industrialization. It eliminates the acceptability of subsidies as a tool for economic development programmes, which however has been agreed to during the Tokyo Round.

      The Agreement on trade-Related Investment Measures (TRIMs) imposes an obligation on developing countries to eliminate the type of investment promotion policies that developing countries could use to promote domestic industry (i.e. obligation on foreign investors to indigenize part of domestic production)..."

    Small developing countries need tariff preferences

    Many of the least developed countries depend on exemptions or partial exemptions from normal developed country tariffs (tariff preferences) to give them a competitive boost. Negotiations that reduce normal developed country tariffs, erode the effective size of these preferences, and the competitive advantages they provide ("preference erosion").

    An IMF publication titled, "Who Can Explain the Mauritian Miracle: Meade, Romer, Sachs, or Rodrik?" suggests that there is disagreement on the sources of Mauritian growth. However, this Cuttaree speech from the WTO Minister's meeting at Cancun in 2003, leaves no doubt that he attributes a lot of this growth to trade preferences granted to Mauritius: "Statement Circulated by the Honourable Jaya Krishna Cuttaree Minister of Industry and International Trade":

      "The positive economic development of Mauritius during the past three decades has been mainly due to a combination of factors, including a stable and democratic political system, good governance but above all due to the preferential market access that we have been enjoying on the EU and the United States markets both for agricultural and non-agricultural products. This access is absolutely essential to countries like mine which do not have the capacity to compete with larger, more resource-based countries.
      This preferential access has been instrumental in ensuring the economic development of Mauritius...

      From the Mauritian experience, it can be safely assumed that through the extension of preferential access, even the most vulnerable of countries can pursue a successful development and export oriented policy..."

    Helpful as preferences are, in March he told the Mauritian Chamber of Commerce,

      "We have consistently explained that preferences cannot permanently be part of a trading system which will ultimately lead to free flow of goods and services across national borders. However, given the disparity among levels of development of WTO members and the importance of preferences to weak and vulnerable economies, preference erosion needs to be carefully sequenced so that it does not signal the end of these economies..."

    If one point of the trade negotiations is to lower tariff levels, and if the preferences derive their value from the height of the tariffs, there is a problem. A 2003 Mauritian paper on preferences, submitted to the WTO, (TN/MA/W/21), suggests some ways out:

      "4. When examining the problem of preference erosion, it is essential to keep in view that, from the perspective of the exporting country, preference erosion would be particularly serious where exports are concentrated in a limited number of products on very few export markets. As a matter of fact, this is the most important feature characterising exports under preferences. While preference schemes, in principle, could cover most, if not all the chapters and tariff lines..., in practice, however, exports are limited to very few products and a limited number of tariff lines.

      5. Consequently, addressing preference erosion would effectively mean maintaining tariffs over a certain level for a very narrow range of products, especially since the export basket of the preference beneficiary countries is almost the same...

      6. ... products which are of specific interest to the preference beneficiary countries, in particular textiles and clothing, leather products, footwear and fish and fish products. ..only a limited number of specific tariff lines within these broad product categories are of direct concern to these countries. It is proposed that these tariff lines be identified by the countries concerned and a list compiled by the WTO Secretariat. It is further proposed that such tariff lines be either excluded from tariff reduction or that a maximum tariff reduction of 10% on each tariff line so identified be staggered over 10 annual instalments on developed country markets...

      8. Necessary technical assistance should urgently be provided, particularly in regard to the identification of the tariff lines referred to...

      9. We are further reiterating our proposal for the setting up of a competitiveness fund in the context of global coherence policy making by international financial institutions in order to assist the industrial restructuring and adjustment of countries most affected by the reductions/phasing out of tariffs."

    One advantage of this approach is that, "the momentum of tariff liberalisation would not be disturbed since only a very narrow range of products would be excluded from the process..."

    Approach to negotiations

    I thought these remarks to the ACP country trade ministers, shortly before the July 2004 Geneva meetings suggested an attractive combination of principle, pragmatism, and respect for other parties to the negotiations. They're not connected to the Chamber speech, but I'll pass them along: "Speech at the Opening Ceremony of the 8th Africa-Carribbean-Pacific Trade Ministers� Meeting, 11 July 2004":

      "A negotiation has two dimensions � it involves a process and it has a substance...As regards our negotiating substance, I shall refrain from making any elaborate comment at this stage...

      ...I would like to make a few comments on the process, a consideration that is often neglected although the process may have a significant bearing on the substance. First, at our own level, it is important that we understand that a negotiation is a dynamic process and in a multilateral setting, it will demand constant adjustment and trade-offs. It is therefore important that we transcend our declaratory postures to move into a negotiating mode. It is important that we learn from the lessons of Cancun so as not to be pinned down in the blame game once again. We have the numbers but this is not enough. We must know how we utilise our strength and how we might bargain and persuade and avoid being only negative. We must also learn to seek and broaden our alliances at the WTO so as not to remain isolated.

      It is therefore important that we infuse in our stance the right measure of tactical flexibility that will avoid us becoming prisoners of our strategy thus preventing us from participating meaningfully in the negotiations. Of course we must define the red lines below which we are not prepared to cross. But at the same time we must be aware that our partners have their compulsions as well. It is therefore important that we adopt a problem-solving approach as a negotiation cannot be a one track affair nor can there be a winner-takes-all outcome.

      Another important aspect is how we focalise on our core issues and prioritise our concerns. In this regard we must put to profit our meeting here to-day. We know what our concerns are and as I said earlier, we have spelt them out in several declarations. As we move towards the writing of the Framework Agreement, it is important that we prioritise those issues, prepare fallback positions and trade-offs and most importantly request our trade experts to develop the sort of language that we would like to see on our concerns in the framework text. It is important that in so doing, we do not open the pandora�s box. Whatever be our convictions, the point of departure of these negotiations remains the Doha mandate to which we have all subscribed. It is important for us to be credible and not to seek to unravel a document which is a delicate compromise and to which we were a party. Success for us will depend on the perception that we are not a Group that just has the numbers to block consensus but, on the contrary, that we have in us the capacity for constructive engagement to put forward ideas and solutions.

      As we engage in our deliberations at the level of the ACP, we must be conscious how our meeting dovetails with other processes in which we will be involved. In two days time, we shall move into the larger G-90 Group and from there on we must interface with the larger process on-going in Geneva. In both these instances, we shall have to integrate the concerns of other negotiating groups which may have the same defensive interests as ours but also certain offensive interests which may not be quite ours. We must be able to reconcile those contradictions in a creative manner so that we ensure a balanced outcome with no losers.

      In the final analysis, however, I would also like to make one thing clear. In as much as we would like to be constructive and show the required flexibility, we cannot be flexible or be constructive in a process if it is not transparent. We can only do so if the bigger process at the WTO is an inclusive one and we are allowed to participate."

    More coverage of Zoellick remarks on Lamy

    U.S. Deputy Secretary of State Robert Zoellick has been in Europe for several days. On Monday and Tuesday (April 4 and 5) he answered interview questions about the WTO DG race. I've posted transcripts of his answers here and here.

    The posts above link to early coverage of the story. Here's some links to additional coverage. The Calcutta Telegraph headlined a Reuters story, "US to back Lamy as next WTO chief". MSNBC's headline on an AP story read, "U.S. supports EU's pick to head WTO". EUobserver.com: "US supports Lamy for head of WTO". The National Business Review of New Zealand: "World Trade: Lobbying starts for next leader". The stories themselves show that Zoellick stopped just short of a formal endorsement of Lamy over the other candidates.

    Bloomberg News (via India's Financial Express, April 6): Lamy is `Strong Candidate' for Top WTO Job: Zoellick supplemented the story with two paragraphs on potential congressional opposition to Lamy:

      "The Bureau of National Affairs last month reported that Lamy faces ``substantial opposition on Capitol Hill'' for his decision during his final days as European Union trade commissioner in November to take the U.S. to the WTO over tax legislation...

      Citing unidentified staffers for Senate Finance Committee Chairman Charles Grassley of Iowa and House Ways and Means Committee Chairman William Thomas of California, BNA said the two legislators ``are angry with Lamy over his decision'' to challenge the U.S. over a tax law that replaced earlier legislation that had been deemed illegal by the WTO. "

    Revised 4-6-05

    Transcript of Zoellick's April 5 remarks on Pascal Lamy's WTO DG candidacy - transcript

    Deputy Secretary of State (and former US Trade Representative) Robert Zoellick is traveling through Europe this week.

    Today, in a press conference with Elmar Brok, the Chairman of the European Parliament's Foreign Affairs Committee, he was asked about Pascal Lamy's candidacy for WTO Director-General.

    Here are the question and the answer (from "Press Availability With Elmar Brok, Chairman, European Parliament Foreign Affairs Committee. Deputy Secretary Robert B. Zoellick. European Parliament. Brussels, Belgium. April 5, 2005" ):

      "Question: ...And my second question to you as well: The European Union has nominated Pascal Lamy as a good chief of the WTO. With your personal experience of dealing with Mr. Lamy, do you think he�s a candidate that the United States could back as well, and what do you think the developing world will think about that?

      Deputy Secretary Zoellick: ...As for your comment about Commissioner Lamy, I obviously consider Commissioner Lamy both a friend but more importantly a very accomplished trade leader. And so I have said all along, and the United States has said, that we believe that he would be a very strong candidate for that position.

      The process for the WTO selection is different than some other processes. What is happening is that the chairman of the general council, who is actually a chairwoman � she�s ambassador from Kenya -- is undertaking consultations with the help of a Canadian official and one other with all of the member states. Now the United States is a big player in the WTO process. Sometimes our support helps; sometimes it doesn�t help. In this case we�re just one vote of many. But we�ve made very clear that we�d be very comfortable with Commissioner Lamy and that I think that he could play a strong role. There are other good candidates as well.

      Now, I spoke with Commissioner Lamy shortly before I took this trip, and I know he�s also planning to visit the United States, which I encouraged him to do. The other candidates have done that, and this would give him an opportunity to talk to members of our Congress, meet some of the officials in the executive branch and others. But I think the WTO would be very well served by his candidacy, but there are some other good candidates as well."

    Zoellick was also asked about Lamy's candidacy on April 4, in Portugal.   This post has a transcript of his comments there:"Zoellick remarks on Lamy".

    Zoellick remarks on Lamy

    Deputy U.S. Secretary of State (and former U.S. Trade Representative) Robert Zoellick commented on Pascal Lamy's candidacy earlier today.  Aine Gallagher and Marie-Louise Moller report in this story:"U.S. says Lamy 'strong candidate' for WTO top post" (Reuters, April 5).

      "Former EU trade chief Pascal Lamy is a strong candidate to head the World Trade Organisation but there are also other good candidates, the United States said on Tuesday..."

    Among other things, Zoellick told a news conference that Lamy would be a "strong candidate," that "The WTO would be very well served by his candidacy but there are other candidates as well," and that "we have made very clear that we'd be very comfortable with (former) Commissioner Lamy and that I think he could play a strong role."

    The day before, on April 4, Zoellick was interviewed by the Portuguese newspaper P�blico ("Zoellick, in Portugal, Discusses Mideast, Russia, Airbus, China"). Here are related remarks on this issue:

      "P�BLICO: Last questions. Is the Administration prepared to support the European candidate to WTO Pascal Lamy? To kind of reciprocate the European support of Wolfowitz?DEPUTY

      SECRETARY ZOELLICK: There's no reciprocity on Wolfowitz. Now Commissioner Lamy and I work very closely together. I consider him a personal friend. And, you know, we have, you know, interviewed all four candidates. But in the discussions, I've emphasized how I think Commissioner Lamy would be a very strong candidate, and I have no doubt that he would be able to rise above the European perspective and serve the overall WTO. Now there are other good candidates as well. The way that process is working, is, in Geneva, in the WTO, countries are having consultations with the Chair of the General Council from Kenya and expressing their preferences. But you know, we made very clear that we'd be very comfortable with Commissioner Lamy, or Pascal Lamy as the WTO Director General. And in part, I think whoever the WTO chooses, we need to have somebody who is strong, intelligent, can work with diverse groups to help get the Doha round done. That's the key objective here as we go forward."

    April 04, 2005

    Not all developing countries are alike

    Alan Beattie and Frances Williams look at key differences between developing countries, and the implications of these for the WTO Director-General race, and the Doha Round trade negotiations: "Who's for the WTO?" (Financial Times, April 4)

    Many of the least developed countries depend on tariff breaks or preferences from more developed countries, to give them a competitive boost. Trade negotiations that reduce normal developed country tariff barriers will reduce the effective size of these preferences, and the benefits they provide ("preference erosion").

    Beattie and Williams point out that:

      "...those developing countries that benefit from special preferences allowing them easier access to rich markets are concerned that a general liberalisation deal - even one in which they were asked to cut their tariffs by less than rich countries - would see the value of those preferences fall. This would hand export gains to other countries, particularly G20 developing nations such as Brazil, South Africa and Argentina that have relatively efficient and competitive agricultural exporters.

      Such "preference erosion", which sets developing countries against each other, has become a large issue in the Doha round. Some aspects of the issue have been around for years - the most obvious one being the Caribbean banana-producing nations that have privileged access to the EU market at the expense of mainland Latin American growers and are seeing the value of those preferences reduced by a reform programme. But a swath of poor nations, in other groupings such as the G33, which brings together countries wanting to protect particular agricultural products, or the G90, which includes the world's poorest countries, share similar concerns about protecting their farmers from the onslaught of low-cost competition...

      There is a sense among some other nations that countries such as Brazil and India that dominate the G20, although they are frequently regarded as bellwethers for the developing world, also have their own sectional interests. Together with Australia, the EU and the US, Brazil and India made up an ad-hoc grouping of "five interested parties" that was instrumental in pushing through the agricultural part of last August's framework agreement. But Mr Mel�ndez says other nations, particularly those that are net importers of food, were resentful at the lack of communication and consultation from that small group...

      These tensions spill over into the race for the director-general position. Any candidate wishing to be seen as the champion of the developing world has to make clear that he can bridge the divisions. Mr Cuttaree, whose country [Cuttaree is the Foreign Minister of Mauritius - Ben] is one of the most prominent beneficiaries of preferences and whose core support comes from mostly very poor African, Caribbean and Pacific (ACP) nations, has argued for preference-dependent countries to be given more time to adjust. He complains that this has led to him being caricatured as a defender of special treatment...

      ...He sees no contradiction between his position and support for more open global trade, saying his commitment to the Doha round was amply demonstrated by his role in bringing the G90 developing countries back to the negotiations after the collapse in Canc�n.

      From the other side of the divide, Mr Seixas Corr�a denies developing countries are split into irrevocably warring camps. Brazil and other competitive exporters recognise the concerns of preference-receiving countries, he says. "We have stated clearly that this is a problem that has to be resolved."

      Mr P�rez del Castillo's home country, Uruguay, is in a similar position to Brazil, having recently joined the G20 and also belonging to the "Cairns Group" of farm exporters, which favours agricultural liberalisation. Several such nations, including Australia and New Zealand, have declared their support for his candidacy. But Mr P�rez del Castillo stresses the breadth of his support from developing countries in order to insist that he will not be beholden to any single group. "I also have Indonesia on board, which is a net food importing country, and Singapore, which doesn't have any agriculture," he says...

      Countering the factors dividing the developing world, there are some that bring them together. Developing countries generally maintain a public stance of solidarity against rich countries in the WTO, for example..."

    The WTO Race - Who's Ahead and the Wolfowitz Factor

    Patrick Baert of Agence France-Presse reports on the state of the WTO Director-General race, a day or so into the consultations process: "Shadow of Wolfowitz hangs over WTO amid US-EU bargain fears" (via MENAFN.com, April 4).

    Consultations began Monday. Baert passes on one diplomat's conjecture that Lamy and Perez del Castillo are the frontrunners, but that a lot will depend on fluctuations in support as Seixas Correa and Cuttaree withdraw.

    Baert's assessment the sources of support for the different candidates:

      "Lamy formally has the backing of the 25 EU member states, which traditionally tries to perform in unison at the WTO.

      Perez del Castillo, a former Uruguayan diplomat, has support from some Latin American countries -- with the notable exception of Brazil, Cuba and Venezuela -- and major farm exporters like Australia and New Zealand.

      Cuttaree has official support from the 56 countries in the African, Caribbean and Pacific (ACP) grouping, but Paris has pressed francophone African countries to swing behind Lamy, according to a European diplomat.

      Seixas Correa has received the support of China, a fellow heavyweight in the G20 group of developing countries that opposes farm subisdies."

    The nomination of Paul Wolfowitz continues to loom in the background as a potential source of resentment and contention:

      "Developing countries have raised concerns about the United States and European Union tacitly sharing out the top posts at the major international financial institutions, including the WTO...

      Media reports have suggested that the appointment of Wolfowitz... was backed by the Europeans in exchange for US support for Lamy at the WTO.

      "I hope there is no truth in this story of an understanding: if everything is shared between a few players, it means there is no space for other people," an ambassador for an Asian country at the WTO commented..."

    April 03, 2005

    Do 60 countries support Perez del Castillo?

    The Chinese news service Xinhua passes on Uruguayan press reports that the Foreign Minister is claiming that 60 countries support Perez del Castillo for WTO Director-General: "60 countries back Uruguayan candidate for WTO head"  (dated April 2).

      "Some 60 countries support the Uruguayan candidate Carlos Perez del Castillo to be the next general director of the World Trade Organization (WTO), local press quoted Uruguayan Foreign Minister Reinaldo Gargano as saying on Saturday."

    The story also indicates that Uruguay's new left-wing government continues to support Perez del Castillo, a candidate originally put forward by a government to its right:

      " "Uruguay keeps on supporting Perez del Castillo. This has been said before, by the president (Tabare Vazquez) to his Brazilian counterpart, Luis Inacio Lula da Silva, and in a very clear form we keep that position," Gargano told a press conference Friday evening upon his return to Montevideo from Brazil, where he accompanied the president on a visit."

    April 01, 2005

    Crowell and Moring's "Doha Developments Update"

    The Crowell and Moring law firm publishes a weekly web newsletter on the Doha Round negotiations, the: "Doha Development Update"

    Recent issues have been carrying short updates on the week's events in the WTO Director-General race.   The most recent issue (March 25) talks about the lobbying efforts of the Brazilian candidate, Luiz Felipe da Seixas Correa, at this month's meeting of the G-20 developing countries in New Delhi: "Seixas Correa Garners Support at New Delhi Meeting"

      "Indian trade minister Kamal Nath indicated to Brazil's Amorim during the G-20 conclave in New Delhi that India planned to support the candidacy of Brazil's nominee, Luiz Felipe da Seixas Correa for the WTO's Director General post. China and South Africa also indicated support for Seixas Correa, although Pakistan was more guarded (and may throw its support, at least initially, to Pascal Lamy). Mauritius candidate Jaya Krishna Cuttarree also attended the New Delhi meeting and sought support from attendees for his bid. The four candidates have about another week to firm up support from Members before the General Council chair Amina Chawahir Mohamed (Kenya) begins her canvassing of delegations for their formal positions in the winnowing-down process that is set to begin in April."

    March 31, 2005

    Getting down to business in the WTO DG race

    Several news stories marked the start of the WTO's two month consultation process, meant to lead to a consensus among member nations on the choice of a new Director-General.

    The stories

    • point to the failure of the last selection process in 1998-1999 (The WTO failed to reach a consensus on a candidate, the process was controverial and caused a lot of hard feelings, and a preoccupation with it prevented adequate preparation for the Seattle Ministers' meetings later in the year, contributing to the failure to lauch a new trade round there.),
    • give some details about this year's selection process,
    • talk about the sources of each candidate's support,
    • and notice the lack of a frontrunner.

    Allen Beattie reports, in the Financial Times that "Selection of new world trade chief too close to call".

    Beattie briefly describes the process,

      "Rather than a formal election, the selection process, which is due to finish by the end of May, involves repeated consultations among WTO members to try to reach a consensus. In a first stage, the chair of the WTO's general council, Kenyan ambassador Amina Mohamed, will consult members of the Geneva-based trade body over the next couple of weeks, after which at least one of the candidates is likely to drop out..."

    and then quotes John Weekes, a former Canadian ambassador to the WTO, and the Chair of the General Council at the start of the last selection process, on possible process dynamics:

      �Quite a few countries have been hanging back and will only reveal their preference to the general council chair at this stage,� said John Weekes, a former Canadian WTO ambassador who is now senior policy adviser at the international law firm Sidley Austin Brown & Wood in Geneva. �There may well be some who support one candidate in one round of selection and another in the next one.� "

    Tom Wright reports in the International Herald Tribune, that "For WTO members, it's 'confession' time".

      "Countries are saying little for now, but most are expected to broadly back candidates from their own regions in the first round...

      As candidates drop out, things could get more complex, said Sergio Marchi, a former Canadian trade minister and chairman of the WTO General Council in 2002. "Some candidates may be short of votes today, but on a subsequent ballot be more acceptable," he said...

      Next week, the ambassadors are supposed to winnow out one candidate, who should in theory gracefully bow out, and this process is meant to continue until a winner emerges before May 31.

      In case no consensus is reached by then, the organization has put in place a voting system to ensure that there is no repeat of last time. But it has not yet been decided how to weight the voting. Industrialized countries are uncomfortable about a one-ballot-per-member system, in which they would be outnumbered by developing countries, Marchi said."

    Member countries could have voted last time, it was discussed.

    During the consultations, Amina Mohamed will likely be polling delegations on their first and second choices. Keep an eye on the second choices. As candidates drop out, their supporters have to go somewhere. In 1999, Mike Moore of New Zealand was in last place in mid-January, but was one of the two finishers in July.

    Chakravarthi Raghavan describes the January results ("Trade: Another term for Ruggiero?" ):

      "The new head count made public in press briefings by the WTO, (and the detailed statement of Rossier that was made available to the members, but withheld from the media, unlike the earlier two reports by Celso Lafer and Rossier Celso Lafer and Rossier conducted the consultations - Ben) brought out:

      * the Thai Deputy Prime Minister, Supachai leading with 40 first preferences, followed by 23 for Abouyoub of Morocco, 15 for MacLaren of Canada and 13 for Mike Moore of New Zealand;

      * on basis of second preferences, Moore edged forward to the top of the list with 26 votes, Supachai with 19, Abouyoub with eight and Maclaren with five.

      * while the great majority were willing to join the consensus whatever the final choice, a "not negligible number" said they would not be in a position to join automatically in a consensus if it formed around a candidate other than those for whom they have indicated a first or second preference.

      Of the 133 members, 28 (12 with offices in Geneva, and others outside) did not respond to contacts by Rossier."

    At Reuters India, Robert Evans ("Haunted WTO aims to name new leader by end of May" ) briefly describes the process:

      "...three envoys will begin consulting the 148 WTO member countries on which of four candidates they would prefer as the next director general.

      The leader of the team, Kenya's ambassador Amina Mohamed who chairs the WTO's ruling General Council, told delegations on Thursday that the three aim to find a consensus around one figure in the hope of having him approved by the end of May..."

    and speculates about a Lamy for Wolfowitz deal:

      "The United States -- which like all other WTO members could block any candidate by refusing consensus -- has yet to indicate which of the four it will support.

      This has led to speculation in some capitals -- but muted in Geneva where the changing dynamics of the 10-year-old WTO are better understood -- that Washington and Brussels may have done a deal involving the WTO and the World Bank.

      The speculation intensified on Wednesday when the EU gave the green light for controversial U.S. nominee Paul Wolfowitz to take over as head of the World Bank, sparking suggestions that Lamy would now get U.S. support for the WTO.

      But diplomats in Geneva said that even if the United States did back the Frenchman, a socialist committed to a liberalised global trading system, that was far from meaning he was certain to get the job.

      Some envoys suggest that any such railroading by the two top trading powers would lead developing countries, now better organised to promote their own interests than some years ago, to dig in their heels and insist on one of their candidates."

    P.S. (April 1) Add these two AP stories (via BusinessWeek): "WTO leadership race enters final stretch" and "Bios of WTO leadership candidates".

    March 30, 2005

    The Making of the WTO Director-General, 2005, #3

    With the WTO Director-General (DG) selection process about to move into a new, "consultation and consensus phase", its time to pull together the posts of the last few months. This post updates a February 15 collection of links on the WTO DG selection process: "The Making of the WTO Director-General, 2005, #2".

    What does it matter

    I'll accumulate "So what, why does this race matter?" posts here. Why does free trade matter? Why does the WTO matter to free trade? Why does the DG matter to the WTO? What about the General Council Chair?

    The WTO is a "member-driven" organization, and, according to John Jackson, member of a recent commission on the future of the WTO, the DG position is institutionally weak: "The Director-General in a Member Driven WTO".

    What does the WTO Director-General do? Here's Candidate Pascal Lamy's articulate explanation: "What does the Director-General of the WTO do?".

    How are Directors-General chosen?

    This post links to the WTO DG selection rules, and to a newspaper article providing a summary description of the process: "The Rules for Choosing a Director-General of the WTO".

    Miles Kahler critiques the methods used to choose leaders at the World Bank, IMF, and the WTO in the Institute for International Economics book, Leadership Selection in the Major Multilaterals. The chapters can be read online (but cannot be downloaded). I learned about this from Daniel Drezner.

    There have been two WTO DG contests before this one. Renato Ruggiero was selected as the first WTO DG in 1995: "How Renato Ruggiero Became the First Director General of the WTO".

    A Claude Barfield Financial Times column, arguing that a WTO DG should have considerable political stature (selected from among former heads-of-state), was the subject of this post: "What Should We Look For In a WTO DG?".

    Early Maneuvering

    Nominations had to be made by December 31. But the race began before then. Who might have been in? Why did some drop out while other stayed in?

    Early on, Jagdish Bhagwati suggested, in the Jan/Feb 2004 Foreign Affairs, that the South African Trade Minister Alex Erwin was considered a leading contender. Bhagwati's article was titled : "Don't Cry for Canc�n". "...Alec Erwin, South Africa's trade minister and a favorite to become the next director-general of the WTO..." This was quickly denied.

    A lot of people thought about running for DG: "People who might have run for WTO Director-General, but did not". In October, Brazilian and Uruguayan representatives met in Montevideo, without reaching joint agreement on a Latin American candidate: "Why are there two Latin Americans in the WTO race?". In December, Kenyan Trade Minister Mukhisa Kituyi almost entered the race: "There was another candidate".

    And then there were four

    When the sun came up on January 1, there were four candidates. Felipe Seixas Corr�a of Brazil, Carlos P�rez del Castillo of Uruguay, Pascal Lamy of France, and Jaya Krishna Cuttaree of Mauritius. Who are these men? What strengths and weaknesses do they bring to this office?

    This Jan 2 survey post linked to pages with biographical information on each candidate: "Race for WTO Director-General". The Economist also surveyed the four candidates on January 7: "The Race for WTO Director-General".

    Here is a report of an interview with Mauritius Foreign Minister Jayakrishna Cuttaree: "Jayakrishna Cuttaree". Here is a post on a Financial Times column that discussed Pascal Lamy: "The pros and cons of Pascal Lamy".

    Alan Oxley, former Australian Ambassador to the GATT explains: "What's Wrong With Pascal Lamy". Peter Gallagher, an Australian trade consultant, discussed P�rez del Castillo and Lamy: "Advice on who to pick as the next WTO Director-General". Both Oxley's column and Gallagher's post offer much more.

    Michael C. Boyer, James G. Forsyth, Jai Singh survey the four candidates, and their chances, in the February 2005 issue of Foreign Policy, "Who Gets to Run the WTO?". Very good. I learned about this from Daniel Drezner. Here's a February 19 survey of the four candidates from the International Herald Tribune: "The WTO Director-General Race Candidates".

    The race itself

    How do you campaign to be Director-General of the WTO? Mike Moore, a former Prime Minister of New Zealand, was DG from 1999 to 2002. He described his race for DG in his 2003 book on the WTO, A World Without Walls. This post has an extract from the book, describing the race: "What's it like to run for WTO Director-General".

    The selection rules call for the presentation of the candidates to the General Council soon after the nominations end. In 2005, this presentation took place on Wednesday, January 26: "This Wednesday�s WTO General Council meeting" and "The next step in the WTO race". A group of NGOs took advantage of the General Council meeting to schedule its own "public hearing" with the candidates on the evening of January 26: "Public Hearing for WTO Candidates". And another post: "Meet the WTO Candidates".

    Once the presentations were completed, the texts were posted to the WTO website, and there was a spate of stories: "WTO DG Candidates Address the General Council". In a first, three of the candidates answered questions at an NGO sponsored "public hearing" on January 26. Here is a transcript: "Minutes of Civil Society Hearing for WTO Director-General Candidates". The NGO "public hearing" was a new element in a WTO DG race; the article highlighted in this post points to it as an example of the increasing influence of NGOs: "The NGOs' New Influence".

    The candidates have been running hard. Brazilian Felipe Seixas Corr�a traveled to South Africa � another G-20 member: "The Brazilian visits South Africa". South African news reports suggested that South Africa was torn between its ties with Brazil and its connections with other African countries. Its choice is described in the post "Seixas Corr�a, or Cuttaree?". In early March, he took his campaign to Washington: "Seixas Corr�a Visits Washington". In late March, China endorsed him: "China Endorses Seixas Correa".

    Newsweek interviewed Pascal Lamy in late January: "Newsweek Interviews Pascal Lamy". Here's another interview from the Financial Express: "Interview with Pascal Lamy". Here is a February article on Lamy based on German sources: "Does Pascal Lamy have a good chance?". In February, Brazil became indignant about Lamy remarks about the public international public good nature of rain forests: "The Brazilians Are Not Happy With Pascal Lamy". In late-February, Lamy took his campaign to India: "Pascal Lamy Turns Up In India". In March there was a strange story about Nigerian support for Lamy "Nigeria's Position on the WTO Director-General Race".

    In mid-March, the Bush Administration proposed Deputy Defense Secretary Paul Wolfowitz as the U.S. candidate for the next President of the World Bank. From that point on, there was persistent speculation about a deal between the U.S. and Europe: the U.S. would support Pascal Lamy in exchange for European support for Wolfowitz at the World Bank: "Wolfowitz for Lamy?"; "Persistent speculation on Lamy for Wolfowitz deal"; "Wolfowitz/Lamy Gossip". The blog "World Bank President" has been covering the World Bank race. It's a potentially useful reference on the inter-relationship between the two races.

    Early on, Uruguayan P�rez del Castillo traveled to Australia to meet with the trade minister there: "What will Australia do?�. In early February, the Australians endrosed him. Stories about that time tied Australia's selection decision (which was said to be between P�rez del Castillo and EU candidate Lamy) to recent EU decisions on wheat subsidies "Which Candidate Will the Australian's Choose?"; "The Australians Opt for P�rez del Castillo". This post links to a set of stories on P�rez del Castillo's claims about the division of Latin American support between himself and Seixas Corr�a: "Latins for P�rez del Castillo". In mid-February P�rez del Castillo campaigned in Washington: "Perez del Castillo in Washington in February", and in mid-March, in Brussels: "P�rez del Castillo goes to Brussels". In late March, he was endorsed by New Zealand: "New Zealand Endorses Perez del Castillo". P�rez del Castillo was nominated by a moderate government; in the Spring, a government of the left came to power. Would it continue to support him: "Will Uruguay's New Socialist Government Continue to Back P�rez del Castillo?"?

    Mauritius Foreign and Trade Minister Jaya Krishna Cuttaree sought support among the Indian diaspora: "Cuttaree plays the ethnic card". The Cuttaree campaign has a web site: "Jaya Krishna Cuttaree" (I learned about this from Daniel Drezner). Cuttaree got the endorsement of the Southern Africa Development Community (SADC): "Endorsements for Jaya Krishna Cuttaree". In early March, Cuttaree was in Brussels: "Jaya Krishna Cuttaree Visits Brussels". In mid-March he attended the G-20 developing country meetings in New Delhi ("Cuttaree goes to New Delhi"), where he thought he found Indian support: "Cuttaree and India". However, this later story from Mauritian sources expresses frustration over India's failure to back him: "India, Mauritius, and the WTO Director-General contest". Here is an early post linking to, and quoting from, an Indian column surveying the candidate-set from the Indian point-of-view: "An Indian View of the WTO-DG Candidates".

    The Choice

    At the end of March, start of April, the selection process changed. Candidates were no longer just making themselves known, now the General Council would begin a process of consultation, meant to lead to consensus around a single candidate: "Change of Pace Coming in the WTO Director-General Race".

    On March 30, on the eve of this process, the odds on the candidates were available from the bookmaker, Ladbrokes: "Here are the odds on the WTO DG candidates:".

    The Transition

    What is involved in settling in to the office? Mike Moore of New Zealand, was selected for DG in 1999. His book on the WTO, A World Without Walls, sheds light on some of the problems he faced: "You Win the WTO DG Race. What Do You Do First?".

    Last updated March 30, 2005

    Here are the odds on the WTO DG candidates:

    For what its worth, from the bookmaker Ladbrokes (via this March 30 story in Bloomberg.com - "Uruguay's Castillo Is Top Contender for WTO Job, Ladbrokes Says" ):

      " ``Castillo looks like the compromise candidate, but I expect the odds on Lamy to shorten,'' said Warren Lush, a spokesman for Ladbrokes in London. ``We're expecting to take some more money soon, but they're the only two to have had much backing so far.''

      Four candidates are competing for the four-year job that starts Sept. 1. Perez del Castillo, 60, a former ambassador to the WTO, is quoted at 5/4 odds, meaning a $5 wager would yield a profit of $4. Lamy's odds are 5/2, with Brazilian ambassador Luiz Felipe de Seixas Correa and Mauritian Foreign Minister Jaya Cuttaree both at 4/1. .."

    The story also notes that the WTO ambassadors (the General Council) "meet tomorrow in Geneva to discuss the selection process."

    March 29, 2005

    Cuttaree and India

    Mauritian WTO candidate, Jaya Krishna Cuttaree, has angled for India's backing, as a representative of another developing country, as a citizen of nearby country with economic connections to India, and on the grounds of ethnic ties ("Cuttaree plays the ethnic card").

    He was present at the G-20 meeting of developing countries in New Delhi in mid-March, where he lobbied for support (The Financial Express, March 19, "Race for WTO D-G post hots up" )

      "NEW DELHI, MARCH 18: Competition for the post of the World Trade Organisation (WTO) director general is intensifying with Mauritius claiming India�s support for the coveted chair. Speaking to mediapersons on the sidelines of the G-20 ministerial meeting in New Delhi on Friday, Mauritian candidate Jayen Cuttaree said that top leaders of the ruling United Progressive Alliance (UPA) have promised to support his candidature.

      Commerce ministry officials, however, said that India was yet undecided on whether it should support Mauritius or Brazil. �We want to support Mauritius as we are politically close. At the same time we are also keen on Brazil as it has emerged as a sharp negotiator forwarding the cause of developing countries,� an official said.

      Former EU trade commissioner Pascal Lamy, who is the EU candidate for the DG�s post, too, was in New Delhi last month to lobby for India�s support. Giving his arguement on why developing countries should support him, Mr Cuttaree said that there was an increasing feeling among developing countries that their concerns have not been taken on board at the WTO.

      At the same time, developed countries too were showing political will to take care of devepment issues along with trade, he said. �My job would be to act as a bridge between developed and developing countries,� he said.

      On the issue of attempts made by some developed countries to divide developing countries on the basis of their level of developement, the Mauritian minister said that he did not believe in such categorisation. �If India and China become stronger it is good for us as they will pull other developing countries with them,� he said."

    (l'express.mu of Mauritius, March 22, "Successful Lobbying for WTO Directorship"):

      Jayen Cuttaree�s campaign to become the new director of the World Trade Organisation (WTO) seems to be going well. Last week, he paid a visit to the president of the Indian Congress Party, Sonia Gandhi, who gave the guarantee that she supports his application for the post. In about a week, the WTO general council will start its first consultations with the member states. Jayen Cuttaree appears to be among the favourites though former EU commissioner Pascal Lamy is a serious contender."

    March 28, 2005

    New Zealand Endorses Perez del Castillo

    tvnz.co.nz reports (March 29) that New Zealand has endorsed Uruguayan Carlos Perez del Castillo for WTO Director-General: " NZ backs Castillo for WTO post".

    The Director-General in a Member Driven WTO

    The WTO is a member driven organization - decision making authority is vested in its General Council of national ambassadors, and is jealously guarded. The Director-General position is not clearly defined in the treaties setting up the WTO, and is not, institutionally, very powerful.

    The relationship between the Director-General and the General Council came up in a recent American Enterprise Institute discussion on the WTO:

      "WTO Director-General Dr. Supachai Panitchpakdi's three-year term will be coming to an end this year amid serious institutional structure problems, according to the board. With a new director-general to be chosen by the members of the WTO in the coming months, the board asserts that it is important and timely to address these challenges.

      "The way the system treats its officials, its secretariat, and its director-general is nothing short of disgraceful," Jackson [John Jackson, a Georgetown University law professor] said.

      Jackson explained that the mantra of the organization, that it is "member-driven," tends to be an excuse for ambassadors to "flex their power muscles and to prevent adequate operation of the secretariat and the director-general." "

    Future challenges for WTO" (UPI via the Washington Times)

    The panel's topic was the January "Sutherland Report" on the future of the WTO. Jackson was one of the co-authors of the report. The report devotes a chapter to the role of the Director-General and the Secretariat. Here are some extracts:

      "...for some years, the mutual confidence between delegations and WTO staff has been less obvious than in the past...The deeper problem appears to be a view that, in a "Member-driven organization", the Secretariat's role must be solely one of support, not of initiative or even of institutional defense of the WTO system...

      The role of the Director-General is not defined in the Marrakesh Agreemetn. Article VI(2) calls on the Ministerial Conference to appoint the Director-General and "adopt regulations setting out powers, duties, conditions of service and term of office...". aside from determining conditiosn of service, this mandate has never been fulfullied...

      There is the question of the Director-General's duty to manage the Secretariat. In recent years, there has been a tendency towards micro-management by Members, particularly through the Budget Committee..."

    Wolfowitz/Lamy Gossip

    Speculation about a Wolfowitz for Lamy trade abounds: Here's a UPI item via the March 28 Washington Times "UPI Hears..."

      "...The only person outside his immediate Washington circle with whom Bush shared his plan to appoint Deputy Defense Secretary Paul Wolfowitz to run the World Bank was his closest ally, Tony Blair. Bush consulted Blair a month before the Wolfowitz name first surfaced -- but Blair kept the secret from his own Cabinet... Above all it has infuriated Gordon Brown, the powerful Chancellor of the Exchequer and Blair's most jealous and most dangerous rival. Brown... takes the way Blair kept Bush's little secret as a personal slight... Brown also thinks Blair was very dumb not to hold out for a big fat favor in exchange for his support for Wolfowitz. After all, the French and Germans have told Bush that they will swallow Wolfowitz -- but only if Bush accepts former European Union trade commissioner Pascal Lamy as the next head of the World Trade Organization. Funny, but Bush doesn't yet seem to have shared the news of this bargain with his own Cabinet, nor with Congress. Will the deal hold?"

    Developing countries are a majority of WTO nations, they have a lot at stake in trade negotiations, they think fairness requires that the Director-General be from a developed country, and they think they were denied their opportunity in 1999. A developing country coalition could prevent consensus around a given candidate.

    I'd guess that many developing countries would react badly to an apparent backroom North Atlantic deal, with U.S. support for Pascal Lamy exchanged for European support for Wolfowitz.

    In 1998-1999, a deadlock between developed and developing country candidates for Director-General led to a prolonged contest, a failure to reach consensus around any candidate, and a lot of anger. The preoccupation with the race interfered with the preparations for the meeting of WTO member country trade ministers in Seattle, and contributed to the failure of those meetings. The start of the current round of trade negotiations was delayed for two years.

    Another bad outcome may be possible if the speculation about a Wolfowitz/Lamy deal turns out to be right. I'm not sure the speculation is right. But, if Pascal Lamy is going to win, and his tenure is going to be productive, it will help if he can win in a way that minimizes the antagonism of developing countries. I don't think that road runs through Washington first. If there is a deal, it would help if implementation were contingent on Lamy's demonstrated ability to attract significant developing country support.

    Minor revisions 3-29-05

    Perez del Castillo in Washington in February

    I didn't catch it at the time, but Uruguayan candidate for WTO Director-General, Carlos Perez del Castillo campaigned in Washington in February: "Benefits of Market Access Should Guide Trade Negotiators in 2005, Not Specifics, Top Trade Official Says"

    March 26, 2005

    India, Mauritius, and the WTO race

    Mauritian's are perplexed about India's failure to endorse Mauritian Foreign Affairs and Trade Minister Jaya Krishna Cuttaree for the WTO Director-General position.

    It comes out in this March 24 Webindia123.com report on a visit by the Indian Prime Minister to Mauritius: "Agreement to expand air services during PM's visit to Mauritius" In among the descriptions of various economic agreements under discussion during the visit, there's this:

      "Mauritius, however, is peeved at India cold-shouldering its candidature for the WTO Director General's post. Despite its close political links and common kinship and its open support to India at all international fora, New Delhi has not given any commitment so far to the candidature of its Foreign Minister Jaya Krishna Cuttaree for the top WTO post. "We have always vociferously supported India, by name," lamented the official."

    March 23, 2005

    Change of Pace Coming in the WTO Director-General Race

    The pace of the WTO Director-General selection process should change next week.

    The WTO adopted procedures for selecting Directors-General in 2002: "Procedures For The Appointment of Directors-General".

    Following the procedures, the candidates were nominated in December, given an opportunity to make a presentation to the WTO General Council in January, and spent the last two months campaigning for office.

    The final decision has to be made three months before the term of the current Director-General ends. Since his term ends at the end of August, the decision has to be made by the end of May.

    During the last two months, the procedures require consultations among the members of the General Council (the Council of the ambassadors to the WTO), facilitated by the Council's Chair (and selected assistants), aimed at bringing about a consensus decision in favor of one of the candidates.

    The procedures describe how it should work:

      "17. The Chair, with the assistance of the facilitators, shall consult all Members, including non-resident Members, in order to assess their preferences and the breadth of support for each candidate. The ultimate aim of the consultation process shall be to identify the candidate around whom consensus can be built. In order to do this, it may be necessary to conduct successive consultations to identify the candidate or candidates least likely to attract such a consensus.

      18. The outcome of the consultations shall be reported to the membership at each stage. It is understood that the candidate or candidates least likely to attract consensus shall withdraw. The number of candidates expected to withdraw at each stage shall be determined according to the initial number of candidates, and made known in advance. This process shall be repeated in successive stages on the basis of a revised slate of candidates each time, with the aim of establishing consensus around one candidate.

      19. At the end of the final stage of the consultative process, the Chair, with the support of the facilitators, shall submit the name of the candidate most likely to attract consensus and recommend his or her appointment by the General Council."

    We'll see. This is delicate work for the Chair. The Council has to be brought to settle on one of the four candidates by consensus. The Chair can't be unduly assertive in eliciting this choice, and can't be seen as pushing any candidate.

    The last time the WTO tried this (under somewhat different procedures) things went wildly awry. The Council failed to reach a consensus, split the term between two candidates, angered many members, and contributed to the wreck of the WTO Ministers' meeting in Seattle.

    The winnowing process begins next week.

    The WTO web page on the race is here: "WTO Director-General selection process".

    Persistent speculation on Lamy for Wolfowitz deal

    Since the Bush Administration selected Paul Wolfowitz as its choice for the President of the World Bank, there has been persistent speculation that the Administration would support Pascal Lamy as Director-General of the World Bank in exchange for European support for Wolfowitz.

    Here are a couple of stories that mention this in passing. Marie-Louise Moeller reports for SwissInfo, "EU seeks talks with Wolfowitz" and Aine Gallagher reports for Reuters, "Europe Buries Qualms Over Wolfowitz".

      ""...The realpolitik of the situation is that in all likelihood Mr Wolfowitz will be appointed as chairman of the bank," Irish Finance Minister Brian Cowen told a news conference after a summit of European Union leaders in Brussels on Wednesday...

      Others at the summit indicated there would be no objections to Wolfowitz's nomination, which comes at a time when Europe is seeking to heal rifts with the Bush administration and wants U.S. backing for former EU Trade Commissioner Pascal Lamy's bid to head the World Trade Organisation..."

    The Reuters story points to another potential tradeoff: "Few obstacles for Wolfowitz in World Bank campaign".

      "Many European officials are fuming privately, diplomatic sources say. The sources said European angst has remained unexpressed in large part because many countries have candidates in the running for top international posts.

      Britain, Norway and the Netherlands are vying for the helm of the U.N. Development Program, which has an annual budget of nearly $3 billion. Meanwhile, the European Union has nominated former EU trade chief Pascal Lamy of France for the top job at the World Trade Organization, which comes open in August."

    There has been a fair amount of speculation that the U.S. may back Pascal Lamy. Much of it has centered around the close working relationship Lamy had with former US Trade Representative (USTR) Robert Zoellick. More recently a possible Wolfowitz/Lamy exchange has been bruited. Lamy is certainly extremely capable, and has the necessary WTO background.

    But here are some counterarguments:

    • The articles cited above suggest that many European states will already back Wolfowitz. Unless this is due to US commitments already privately made, to back Lamy as a quid pro quo, it doesn't sound like the US will have to back Lamy to get Wolfowitz.

    • Lamy and Zoellick worked well together. But Zoellick isn't USTR anymore. As Deputy Secretary of State he has a much wider range of issues, and won't be the lead on US trade negotiations.

    • Lamy is a French Socialist. There may be ideological objections within the Administration.

    • An apparent Lamy for Wolfowitz exchange, placing a European as Director-General of the WTO, would create enormous antagonism among the developing countries that have been pressing more and more insistently for a leadership position at the WTO.

    • The US has traditionally objected to WTO Directors-General from large European nations. Under the GATT, most DGs were from smaller European states. In the 1994 selection campaign, the US backed Mexican President Carlos Salinas, and did not agree to the selection of an Italian candidate until there was no alternative - and even then, not readily. There were no European candidates in 1998-99.

    China Endorses Seixas Correa

    Taiwan's The China Post reports that China has endorsed Brazilian Luiz Felipe de Seixas Correa in the WTO Director-General race: "China supports Brazilian candidate to lead WTO? "

      " China on Wednesday threw its support behind Brazil's candidate to lead the World Trade Organization....

      "China supports Brazil's ambassador to the World Trade Organization Luiz Felipe Seixas Correa to run for the post of WTO's director-general," the government's Xinhua News Agency said, citing Commerce Ministry spokesman Chong Quan."

    Here's a report from Xinhuanet, "China supports Brazilian candidate to run for the WTO chief"

      "...It is the first time that China expresses its support to a candidate for WTO director-general.

      According to Chong, China has informed the decision when Commerce Minister Bo Xilai's met with visiting Brazilian Vice Foreign Minister Clodovaldo Hugueney Monday in Beijing..."

    and the Associated Press, via BusinessWeek, "China supports Brazilian candidate for WTO".

    Revised March 23, 2005

    February 26, 2005

    The Brazilians Are Not Happy With Pascal Lamy

    According to MercoPress, a few days ago WTO Director General candidate Pascal Lamy proposed, at a UN conference, declaring "the Amazon region and other rain forests as 'global public assets' subject to world management.

    Brazil, with its own DG candidate, sees the potential for interference in its affairs. The MercoPress report is here: "Brazil reacts angrily to Amazon proposal"

      "Brazil reacted angrily to former European Union Trade Commissioner Pascal Lamy's proposal to declare the Amazon region and other rain forests as "global public assets� subject to world management

      The proposal, which revived Brazil�s fears that rich countries pretend control over the Amazon region was harshly condemned in a release from the country�s Foreign Affairs Ministry.

      Mr. Lamy�s statements "are evidence of a prejudiced view underestimating the ability of developing nations to manage their natural resources in a sovereign and sustainable manner", said the release. "Such statements are incompatible with the post of director-general of the World Trade Organization (WTO) to which Mr. Lamy aspires".

      The statement refers to the current competition for the WTO chair between five candidates, including Mr. Lamy and Brazilian Ambassador Luiz Felipe de Seixas Correa.

      The Brazilian press speculates that Brazil will use Mr. Lamy�s Amazon proposal to influence the votes of other countries with tropical rainforests, such as the seven other South American countries that share the Amazon region. "

    Right now there are only four WTO DG candidates.