The Custom-House

Pascal Lamy is on the job

Pascal Lamy took over as Director-General of the WTO yesterday.  His team of four Deputy Directors-General comes to work at the start of October.

Everyone thinks he's capable.  Some have high hopes for what he might be capable of, others (Waldo Bello - see preceeding post) fear that.  It's important to remember that the WTO Director-General is a weak institutional position.  The member states are jealous of their decision-making responsibilities.  Lamy will be dependent on moral suasion.

Here's his short statement on taking office:

You want a job?

The World Trade Organization (WTO) Human Resources Department has posted a notice of openings for four Deputy Director-General postions: "HUMAN RESOURCES ANNOUNCEMENT BY WTO DIRECTOR-GENERAL DESIGNATE PASCAL LAMY ON THE SELECTION PROCESS FOR WTO DEPUTY DIRECTORS-GENERAL".  Get you application in by July 10.

Reuters ("Incoming WTO chief breaks with tradition on posts") and Bloomberg ("Lamy Breaks Tradition, Introduces Transparency to Key WTO Posts") both note this is a break with tradition.

Pascal Lamy takes office as Director-General on September 1.  The Deputy positions are to be filled on October 1.  This is only about eight weeks before the Ministerial conference in Hong Kong.  Given the time it takes to get up to speed, it may be hard for these Deputies to be a lot of help to Lamy in the run-up to the conference.

Now it is official, Lamy selected

The WTO General Council officially selected Pascal Lamy of France as the next Director-General of the WTO, effective September 1.

Thomas Kohlmann reports: "Europe's Lamy Named New WTO Leader". (Deutsche-Welle, May 26)

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).

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.

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.

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.

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)

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.

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".