Brazilian diplomat Roberto Azevêdo wins WTO leadership battle

Brazil’s Roberto Azevêdo has emerged as the new director-general of the World Trade Organisation after seeing off Herminio Blanco of Mexico, the favoured candidate of the US and EU, according to officials familiar with the contest.

Both Latin American rivals coveted the WTO position as a means to elevate their countries’ influence and cement their status as rising powers.

The competition to succeed Pascal Lamy, the Frenchman who has presided over the WTO since 2005, had also been seen by some as a proxy for wider trade battles between the developed and developing worlds.

Mr Azevêdo faces a major challenge to restore the credibility of an organisation that has failed to conclude the Doha round of global trade negotiations.

Although votes in the WTO selection process are secret, the US was said to have backed Mr Blanco, though it was not opposed to Mr Azevêdo. The EU’s 27 member states on Tuesday also decided to back Mr Blanco en masse, though they, too, did not object to Mr Azevêdo. Before the final vote, Mexican officials claimed the backing of Japan and South Korea, while Brazilian officials said China was on their side.

Mr Azevêdo, whose victory is due to be confirmed officially by the WTO on Wednesday, will take the helm of the grouping in September at a time of huge challenges for the global trade body. He will be the first WTO chief from Latin America.

Many of the traditional engines of global trade – such as the US and the EU – have moved to undertake bilateral and multilateral trade agreements of their own outside the WTO framework.

Mr Azevêdo is a career diplomat and Brazil’s current WTO ambassador. Supporters say his knowledge of the institution and broad backing across many emerging markets could help bridge the north-south split within the WTO and reinvigorate talks ahead of a December ministerial conference in Bali.

However, Mr Azevêdo has often defended positions adopted by Brazil that were seen as obstructing progress in multilateral negotiations, particularly compared with Mr Blanco and Mexico, a strong proponent of trade liberalisation. This raised red flags among Mr Azevêdo’s detractors who claimed that the institution would continue to lose relevance under his leadership.

Ed Gerwin, a trade policy analyst at Third Way, a Washington think-tank, suggested those worries may be overblown and most people were “relatively happy” with the choice of the Brazilian candidate. “He has a reputation for being open-minded,” says Mr Gerwin. “He has vast experience at the WTO and that is important because it’s a difficult place to navigate and has the potential to make north-south discussions a bit easier.”

Over the past six weeks a three-person panel of WTO ambassadors has been responsible for the selection of the new director-general. Candidates initially numbered nine, then five then two. Mr Azevêdo had always been seen as a strong contender, while many were surprised that Mr Blanco made it as far as he did.

Mr Azevêdo will not be the first WTO head from the developing world: Supachai Panitchpakdi of Thailand held that distinction between 2002 and 2005. But his ascension to the top job in global trade will still be cheered in Brazil as recognising its stature in the global economic hierarchy. It also signals that when the leadership of international economic institutions is picked by consensus, rather than quotas, the EU and the US are no longer in a position to impose their will.

“There was a day when the US and Europe would sit in a room and say this is our guy – and nobody else had any meaningful say in the process – that certainly has changed and that’s a good thing,” says Mr Gerwin. “If we really want to bring rules-based trade to the entire globe, everybody has to feel that they’re bought into the process,” he adds.

The last time WTO members came close to a sweeping multilateral trade deal was in 2008. After those talks collapsed and the global recession took hold, WTO negotiations ground to a halt.

But recently the WTO has been trying to muster consensus for a small package of measures – including smoother customs rules and procedures known as “trade facilitation” – by the end of the year.

Even a limited agreement along those lines would be seen as a win for the WTO at this stage.

Additional reporting by Claire Jones in London and Joshua Chaffin in Brussels

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