LexisNexis(TM) Academic - Document
Copyright 2005 The Financial Times Limited
Financial Times (London, England)

February 15, 2005 Tuesday
London Edition 1

SECTION: COMMENT; Pg. 19

LENGTH: 1092 words

HEADLINE: The cause of world trade demands a powerful patron: CLAUDE BARFIELD:

BYLINE: By CLAUDE BARFIELD

BODY:


Over the next several months, the members of the World Trade Organisation will choose a new director-general to lead the organisation through the crucial end game of the Doha Round and beyond. The exercise is likely to be seen in retrospect as a missed opportunity. Although the candidates - Carlos Perez del Castillo of Uruguay, Jaya Krishna Cuttaree of Mauritius, Luiz Felipe de Seixas Correa of Brazil and Pascal Lamy of France - are distinguished and able diplomats and negotiators, they lack the political stature and international standing that are requisite for leading the WTO in the future. This is true even of Mr Lamy, the brightest intellect among them. It is time for the WTO to aim higher, both in the profile of the person chosen and in the powers he or she is granted.

In a widely quoted analysis several years ago, Robert Keohane and Joseph Nye, the political scientists, described postwar global co-operation under the Bretton Woods agreement as a "club" model, composed of a small group of developed countries, staffed by bureaucrats, organised according to specific programme areas (trade, development, global financial flows) and characterised by closed door negotiations.* Though quite successful for four decades, steeply reducing border barriers and tariffs, the "club" model for trade contained the seeds of its own obsolescence.

First, the General Agreement on Tariffs and Trade/WTO expanded from a dozen or so developed countries to almost 150 nations, 80 per cent of which were developing countries. It was no longer possible for a tight clique of US and European diplomats to dictate outcomes. Of equal importance, beginning with the Tokyo Round but advancing dramatically with the Uruguay and Doha rounds, trade negotiations moved inside borders to encompass issues that struck deep into the social and regulatory fabric of member states. These included financial and telecommunications regulations, intellectual property rules, health and safety measures, taxation and the environment. This meant that trade ministers in member states could no longer dominate national decisions but often had to defer to other ministries. Concomitantly, the broad new remit of Gatt/WTO obligations resulted in demands by large numbers of interest groups and non-governmental organisations - from business associations to environmental, consumer and labour organisations - to be included in the process.

All of these new pressures culminated in the fiasco at Seattle, where a dysfunctional set of negotiating rules and practices (labelled by Mr Lamy as "medieval") proved wholly incapable of resolving matters within the WTO, or providing an effective counter to the anti-globalists who dominated both the streets outside and press accounts. Although a new round has been launched since Seattle, fundamental structural and negotiating flaws remain. As a result of their own lack of international standing and the tight reins placed on the WTO director-general, neither Michael Moore nor Supachai Panitchpakdi, his successor, emerged as powerful voices in defence of the multilateral trading system.

This brings us to the importance of the current process of selecting a new director-general. In their analysis, Keohane and Nye identify "the lack of intermediating politicians (as) the most serious 'democratic deficit' of international organisations in general and the WTO in particular". More broadly, they point to the "insufficient politicisation of these organisations - their lack of effective politicians linking organisations to constituencies". One means of remedying the "democratic deficit" would be the creation of a strong office of the director-general.

Such an empowered position would include additional political authority to take the lead in setting priorities and fashioning compromises in the ongoing Doha Round negotiations. This would entail working directly with negotiating committee chairmen and seeking large compromises to finish the round in 2006-07. Down the road, it would include the authority to knock heads together and deflect potentially crippling disputes among member states. Of critical importance would be the mandate to become the spokesman for the multilateral trading system in contentious ideological battles over globalisation, and the ability to reach out to different constituencies and interest groups.

If the director-general is to be granted increased authority and stature, the bar must be set higher in terms of personal background and qualifications. The ideal candidate would be a current or former elected head of state, from at least a mid-sized developing democracy. There is such a candidate waiting in the wings - Ernesto Zedillo, the former president of Mexico. In addition to expertise in trade matters, Mr Zedillo's political credentials are impeccable: he guided Mexico through the difficult economic debacle that he inherited from his predecessor without reverting to traditional protectionism. More important, he presided over the first successful transfer of democratic authority to an opposition party.

If one wanted truly to jolt the system, there is Bill Clinton. Whatever the judgment of his US presidency overall, he has proved to be a defender of free trade, even against the dominant trends in his own party, and he retains a towering respect and influence in international circles, particularly among developing countries. President George W. Bush has demonstrated a new confidence in his own judgment and a willingness to take chances with his political capital - supporting his predecessor for this key position would affirm in the strongest possible terms the US commitment to the multilateral system.

An enhanced role for the director-general, one that is transparent and clearly demarcated, would minimise the WTO's risk to national sovereignty. The result would be far less likely to alter the rights and obligations of member states than is the case with the unchecked power of the organisation's dispute settlement bodies.

Ultimately, the democratic legitimacy of the WTO would be immensely strengthened if the member states chose a politically astute director- general of high international stature and then gave him or her a more powerful mandate to lead.

The writer is resident scholar at the American Enterprise Institute and author of Free Trade, Sovereignty, Democracy: The Future of the World Trade Organisation (AEI Press, 2001)

*Robert Keohane and Joseph Nye, The Club Model of Multilateral Co-operation and Problems of Democratic Legitimacy, (Brookings, 2001)

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