Monday, January 28, 2013


It’s not exactly a horse race – selecting the head of the World Trade Organization. It’s more like the popular American television show "Dancing With the Stars" where contestants are sequentially eliminated.

As with everything in the WTO – and perhaps it is a flaw, according to one contestant for the seat who wants a United Nations-style one-nation, one-vote – the selection process for the next Director General will be tedious and slow because it will require the consensus of all 159 members.

The nine candidates come from all regions of the globe and a several-step selection process will eliminate all but a final couple on a rotating basis.

There are two candidates from Africa – former Ghana trade minister Alan Kyerematen and Kenya’s Amina Mohamed, who is executive director of the United Nations Environment Program. There are two candidates from South/Central America – Costa Rica’s trade minister Anabel Gonzalez and current Brazilian chief envoy to the WTO, Roberto Azevedo. Former Mexican trade minister Herminio Blanco also is in the contest.

From Asia comes Indonesia’s former trade minister and current tourism and creative economy minister Mari Pangestu along with South Korea trade minister Bark Taeho.

Jordan has put up former trade minister Ahmad Tougan Hindawi.

New Zealand nominated its current trade minister, Tim Groser.

The fun of guessing who will come out on top – hopefully by mid-summer – has already begun. Speculation and rationales are running wild in Geneva. And, in fact, it has gone beyond the Geneva trade capital. On-line betting houses are also getting into the game.

In Dublin, the Paddy Power betting parlor is in the game – but it is way off on a prospective winner. Leading the pact as of January 25, according to Paddy Power, is Kenya’s Mr. Kyerematen with nine to four odds. He was the first candidate to announce in December. He is followed by New Zealand’s Mr. Groser and Costa Rica’s current trade minister Anabel Gonzalez – both with 11 to four odds to win.

The riskier bets – according to Paddy Power – start with Indonesia’s Pangestu with six to one odds; Brazilian Robert Azevedo with eight to one odds and Kenya’s Ms. Mohamed with 12 to one odds.

From far behind comes Mexico’s Blanco with 16 to one odds followed by Jordan’s Hindawi and Korea’s Bark trailing each with 20 to one odds.

(IRELAND SHOULD STICK TO HANDICAPPING HORSE RACES) Everybody but Americans – where on-line betting is outlawed – can bet and perhaps make some money.

Here is where Washington Trade Daily comes out – and why (although we are not putting any money on the line):

Winning will be Indonesia’s Ms. Pangestu – a veteran trade negotiator who has a wealth of experience representing her own country and coordinating various alliances of developing countries. Over the years she also has shown her ability to stand up to economic giants like the United States and the European Union while also developing strategic alliances with both.

The United States and the EU, however, will likely stick to the Indonesian candidate for more pragmatic reasons. Selecting an Asian for the top slot will mean that the four deputy Director Generals would have to come from other regions of the world. That precludes China from taking up a leadership post.

(ps – US Trade Representative Ron Kirk was spied last week in Davos at the Indonesia Night party).

South Korea’s Bark, so far, has taken a low profile in the debate. He was in Davos too last week.

As for the two African candidates, the United States is likely to stand steadfast against both, given Washington’s less-than-enthusiastic – and sometimes antagonistic – stances toward Africa. The Obama Administration also has looked askance at important African trade policy demands, including insistence that the United States change its cotton support policies for the benefit of small producers in West Africa. The United States also strongly opposes another major African trade tenet – that industrial nations eliminate all tariff and nontariff barriers to imports from least-developed countries.

As for the three-way South/Central America/Mexico grouping, Washington probably will like to support Mexico’s Mr. Blanco, but the rest of the world would go against that selection – benefiting Brazil’s Azevedo or Costa Rica’s Gonzalez. Mr. Blanco apparently has been "singing the US song" to delegates in Geneva, but offset by a reputed offer to China that it would be given a Deputy Director General post.

Given its long history of policy disagreements with Brazil, Washington will not want a Mr. Azevedo at the helm.

Ms. Gonzalez could be a strong candidate, lasting until the final elimination rounds. Costa Rica is a member of the Central American Free Trade Agreement with the United States and has been a staunch supporter of the United States in the WTO on a number of controversial issues.

Central America also has a free trade arrangement with the European Union.

One "dark horse" in the contest is Jordan’s Mr. Hindawi. But he too could become a viable alternative in a deadlock, gaining support from the United States and the EU. Both have free trade agreements with the country.

New Zealand’s Mr. Groser has very little chance, but could emerge from a seriously deadlocked process – which nobody expects. Traditionally, the Director General has been held by a developed-country representative, alternating with someone from a developing country. The rule, however, is not chiseled in stone, as emphasized by current Director General Pascal Lamy – a Frenchman.

But New Zealand has had a turn when former Prime Minister Mike Moore held the post in the 1990s.

Mr. Groser has already told envoys in Geneva that he expects to be eliminated in the first round of decisionmaking.

There is an inordinately large number of candidates in the contest. So the WTO is grappling with how to make the process shorter. A three-member selection team headed by General Council Chair Elin Østebø Johansen of Norway is holding consultations with members now on how to reduce the number of rounds and speed up the process.

"Horse-trading" for the appointment of the four Deputy Director General posts also could become a major tool in the campaigns.

The selection team is made up of the General Council chair, Dispute Settlement Body head Shahid Bashir of Pakistan and the chair of the Trade Policy Review Body, Muñoz Gómez of Colombia.

In the last contest in 2005, which ended in the endorsement of EU trade commissioner Pascal Lamy, there were only four candidates.

One official in Geneva suggested there would be at least eight consolation rounds between the selection committee and members to eliminate one candidate each time. Another suggested that the process would have to be shortened even more – perhaps to two months.

It is expected at this point that at least four candidates would be eliminated in the first round, culling another three in the second, with perhaps as few as two left standing in the final round. Much will depend on the modalities for elimination and whether each member will have three or four equal choices.

The candidates will show up in Geneva on January 29, 30 and 31 for a formal exposition of their views followed by questions from the audience of envoys.

According to one knowledgeable speculator in Washington, running for the WTO top post is made difficult by members quietly courting US support – but trying to keep it under wraps. Outright endorsement by Washington is the "kiss of death" for any candidate. The easiest way to gain more credibility from members is to get surreptitious support from Washington and then start criticizing the United States.

Several of the WTO candidates were in Washington over the past several weeks, but those visits were kept secret. Washington Trade Daily only found out about them after the fact – sometimes within a couple of hours.

Jim Berger