How the WTO can stay relevant

Ambassador Roberto Azevedo has been elected as the new Director-General of the World Trade Organization, succeeding Mr Pascal Lamy. He will be formally appointed on 1 September 2013.

The challenges faced by the new Director-General of the World Trade Organization (WTO), Ambassador Roberto Azevedo, are absolutely monumental. The WTO is at risk of becoming the League of Nations of the 21st century economy, and its biggest hurdle is to convince policy and opinion makers that the organization remains relevant. After the failure of the Doha Round, the WTO needs to find a way to meaningfully move forward. One of the constraints is that the United States chooses not to focus energy and effort on the WTO, instead concentrating on agreements like the Trans Pacific Partnership (TPP), which are more suited to its purposes. Even the general public and “protest community” have lost interest – we don’t see rallies and demonstrations surrounding the WTO meetings as we used to.

Besides the external challenges mentioned above, the new Director General will also have to tackle important internal fissures that impact the effectiveness of the organization. There has historically been a clear split between North and South – something which was brought to the forefront with the selection of the new Director General. The North was supporting the Mexican candidate, Herminio Blanco, who has strong ties with the US, while the South pushed for Mr Azevedo. And of course, the protectionism and trade barriers that the North has been accused of constructing against the South are famously widening this divide.

However, more importantly, there is also a South-South division, which is less obvious but equally hindering. The agriculture policies of India are very different from those of Brazil for example, and even though five key leading emerging nations (Brazil, Russia, India, China and South Africa) are classified as the BRICS, I see very little in common within these countries. We have the emerging power and economic strength of Brazil, China and India, but they need to lay aside their differences in order to progress and benefit from their combined assets.

The most important thing for the new Director General to do would be to rethink the organization’s raison d’être – what it stands for and what it is trying to achieve. The organization emerged after the trade and military wars of the 20th century, and at that time, it had a very clear objective: to establish global governance. Perhaps there is a similar need now, but in a very different way.

Mr. Azevedo should use his soft power and persuasion skills to strengthen the public relations of the organization. He should meet with and spend quality time with the various critical stakeholders – representatives from the private sector in Europe and the US, from the BRICS countries, and other key players. It is important for him to get businesses to understand the importance of the WTO, and for it to remain central in future trade negotiations. I still have a strong interest in the WTO, but that interest is not shared by many.

Led by Mr Azevedo, the organization has to rebuild bridges, bring countries together in a shared mission and create value for those who have lost confidence. To achieve this, Mr. Azevedo needs support from his constituents, and time to build his reputation and put his diplomacy into action.

Author: Jean-Pierre Lehmann is Professor Emeritus of International Political Economy at IMD, Switzerland, and Founder of The Evian Group. He is a member of the Global Agenda Council on Global Trade and FDI.

Image: Names of countries taking part to the 8th World Trade Organization Ministerial Conference are pictured on the chairs for delegates. REUTERS/Denis Balibouse