Sergio Marchi served as Canada’s international trade minister and ambassador to the World Trade Organization, including as chairman of its General Council.
With the sudden announcement by the Director-General of the World Trade Organization (WTO), Roberto Azevedo, that he is leaving a year earlier than the end of his mandate, the 164 members must immediately prepare to choose his successor.
Given the failure of the WTO’s most recent attempts to establish new international trade rules – in Seattle in 1999, and the Doha Round of talks that began in 2001 and has yet to be concluded – and a world economy just beginning to emerge from COVID-19 lockdowns, many see this election of a new leader as the most important one since the General Agreement on Tariffs and Trade (GATT), the WTO’s predecessor, was established in 1947.
The WTO is crucial for Canada. We depend on trade to sustain our economic prosperity, and we need effective, fair rules. Without them, the world would be dominated by the big powers at the expense of countries such as Canada.
Our federal Minister of Trade must therefore take an active role in the selection. Our government has been leading a WTO reform process among like-minded members, so it is all the more logical to do so.
The trade organization faces an unprecedented number of challenges. We must insist that the campaign foster an intelligent discussion on the issues that matter the most. In this regard, I urge our minister to champion five strategic objectives.
First, we require a director-general who will lead the Doha Round to a successful conclusion. It has gone astray amid member divisions and a chronic lack of political will. This negotiating breakdown has been costly.
The next director-general must start anew. The new leader must bridge the major gaps, address the huge issues of agricultural and fisheries subsidies, narrow the scope of the negotiating platform if need be and appeal to developed and developing countries to help pull the agenda forward.
The new head must pursue an outcome that is positive and balanced for all countries involved. Bringing an appropriate close to the round is not only a matter of credibility for the WTO, it would also provide a much-needed boost to the world’s economic prospects.
Second, the next director-general must be tougher in countering protectionist forces. These were regrettably alive and well before the pandemic. But now, as countries loosen their lockdown criteria and try to reboot their economies, there is a dangerous risk that leaders will retreat into a deeper protectionist mode as they attempt to satisfy local fears over job losses. Ironically, erecting higher trade walls would only exacerbate the economic pain. The WTO must fight isolationism with all its might.
Third, the dispute settlement body (DSB) needs urgent fixing. The “jewel” in the WTO crown has been paralyzed by the refusal of the United States to appoint new adjudicators. While the DSB needs legitimate reforms, it is sad that the U.S. administration insists on killing it to fix it. Moreover, since the GATT’s establishment, the U.S. has been its unrelenting locomotive. I saw this leadership close up during my five years as Canada’s ambassador. Now, the U.S. has become the caboose, slowing down progress. This needs to change.
Fourth, it follows that the WTO’s new leader must be able to get the U.S. back in the tent. To persuade Washington’s political class that the WTO is not the enemy of economic growth and development. But rather that a well-functioning multilateral system based on rules is indispensable to economic stability for all countries.
At the same time, the new director-general must also reconcile the growing gulf between the U.S. and China. If the WTO is to succeed, these two giants must be on the same page.
Finally, Canada should encourage a broader discourse on the reform agenda that it has been leading with a small group of members. Reforms are never easy. Yet, the need has never been greater.
I believe a renewal package should be focused. It is more important to usher in incremental gains than to endlessly debate an overly ambitious plan that goes nowhere. Build it around several pillars – ensuring greater transparency, better integrating trade and environmental issues, enhancing the engagement of leaders in business and non-governmental organizations, and strengthening the capacity of smaller members to better participate in the negotiations.
Past WTO elections have been heavily weighted on process and diplomacy, effectively ensuring an alternation of directors-general from developed and developing countries.
But given the importance of this momentous time in the life of the WTO, which this year is celebrating its 25th anniversary, there should be one, single overriding requirement – to choose the best and most credible candidate. The person best positioned to offer fresh, decisive leadership. Period.
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