World Trade Organization chief Roberto Azevedo says efforts to salvage last year's global trade deal will inevitably founder, leaving the institution adrift after nearly 20 years of failed deal-making.
Negotiators from Canada and other countries have been scrambling to broker a compromise since July, when India walked away from a sweeping agreement to simplify and standardize customs rules around the world in a dispute over food subsidies.
But Mr. Azevedo, a Brazilian diplomat who took over as WTO director-general last year, acknowledged Thursday that a compromise remains elusive and no agreement is in the offing.
"We will inevitably reach the conclusion that we have not found a solution to the impasse," Mr. Azevedo said in interview in Ottawa, where he met with Trade Minister Ed Fast and other top Canadian officials. "It would be a dream come true, but right now it doesn't look like much more than a dream."
More importantly, the deal's collapse will leave the 160-country WTO facing an existential crisis, Mr. Azevedo said. And unless member countries agree to overhaul and rethink the organization's trade-negotiating mandate, the Geneva-based group will be relegated to a regulatory role, he said.
"We have to recognize that we have failed for 20 years and we can't fail for another 20 years, in terms of negotiations," he said. "We have to find a way forward."
The United States, for example, has suggested that countries go ahead and implement the deal without India, abandoning the organization's consensus-based decision-making model.
India has refused to ratify the deal, which would have saved the global economy an estimated $1-trillion, in protest over WTO efforts to limit countries' ability to stockpile food and subsidize domestic prices.
The so-called "trade facilitation agreement" was held up as a test of the WTO's relevancy as a trade negotiating forum in the face of proliferating regional and bilateral trade deals, such as Canada's free trade agreement with Europe and the 12-member Trans-Pacific Partnership.
Mr. Azevedo that the process of reshaping the WTO must begin at two pivotal meetings later this month – an Oct. 16 meeting of its trade negotiations committee and an Oct. 21 general council meeting.
"We can't be forever waiting," he said. "We have to move on and we have to begin to think of alternatives."
Mr. Azavedo did not explain how the WTO can successfully negotiate new trade rules without abandoning the need for unanimity, which has been its hallmark. But he said the WTO must find a way to "salvage" things that have already been negotiated.
"When we can't reach a deal, then what? Do we just stop everything? Do we start from scratch?" he asked. "This type of conversation has to be had seriously among members."
Mr. Azevedo pointed to problems that have emerged between Canada, Europe and the United States over investor-state rules as an example of why the world needs the WTO.
"That's where we come in," he said. "The WTO helps harmonize these things by imposing disciplines across the board to 160 members."
Some German officials have expressed concern about provisions negotiated into the Canada-Europe free trade deal that allow companies to sue governments, worried they will become a model for its deal with the U.S.
Mr. Azevedo added that if trade negotiations continue to "migrate out of the WTO" – to deals such as the TPP and the Canada-EU agreement – the biggest losers will be the world's smallest and weakest countries. "The ones who don't shape the international agenda will lose their voice at the table," he said.