The World Trade Organization (WTO) is an integral part of the global economic governance structure envisaged by world leaders at the Bretton Woods conference in the 1940s. Although not formally established until 1995, the WTO formalized a series of ad hoc trade agreements forged in the 70 years since World War II. In its 25-year history, the WTO has made slow progress in establishing and reinforcing a rules-based trading system that “help[s] producers of goods and service, exporters, and importers conduct their business” (WTO website). The WTO has a wide membership, including many developing countries and is thus an integral part of the global effort to foster economic development.
The last Director-General of the WTO, Robert Azevêdo, a Brazilian national, stepped down from his post on August 31, 2020, and a search for his successor has begun. There are eight candidates currently vying for the post, and in July and August, candidates consulted with WTO member countries informally. The official rounds of consultations began September 7, with the expectation that WTO members will gradually winnow the field and make a final choice by consensus in the fourth quarter of 2020. To help inform that process, CGD has engaged in a series of conversations between CGD president Masood Ahmed and the Director-General candidates, with a focus on the candidates’ views for how the WTO can amplify developing country voices in global trading systems.
It is widely recognized that the stakes for the new Director-General of the WTO are very high. The organization is facing a turbulent period, with increasing assaults by major economic powers on the global trading system and a “turning inwards” by many countries. Many political leaders feel that their countries need to rely more on their own productive capacity rather than trade within a rules-based system. This perceived need to be self-sufficient has been firmly reinforced by the COVID-19 pandemic, during which countries have found themselves with shortages of critical medical supplies. International commerce is increasingly in “non-tangible” goods, such as software, and the source of products is less visible as internet-based trade takes hold. Trade is taking place in the most contested environment since before World War II, with less credence given to the notion that free trade, in a rules-based system, benefits all.
The WTO is critical for developing countries to relaunch their progress towards the Sustainable Development Goals, through sustained growth and poverty reduction. For most developing countries, exports are the major engine of economic growth and, in order for them to develop their export markets, they would greatly benefit from a consistent and predictable set of rules that establishes a level playing field for selling their products. When unequal trade preferences and trade barriers—be they tariffs or regulation—get in the way, developing countries are at a distinct trading disadvantage. Many developing countries do not have the necessary scale of operations to exert any market power.
Unfortunately, the prospects of developing countries have not been the focus of discussions about who should lead the WTO, which instead have mostly considered how to resolve tensions between the major trading blocs of the world (the US, China, the European Union, for example). But, as the African proverb goes: when elephants fight, it is the grass that gets trampled. And the WTO is one of the principle organizations that can effectively give voice to developing country concerns in the ongoing battle among the trade powers. And the key to making sure that the voices of developing country are heard will be the Director-General, who sets the agenda and modalities for negotiation. While all members of the WTO have a seat at the table in negotiations, the Director-General and their staff are the only assurance that all voices are heard. They are also crucial in ensuring that the results of any negotiations are equitable not only to today’s economic powerhouses, but to the countries that depend on global trade to accelerate growth and improve the lives of their people.
In the interviews below, the candidates for the Director-General give their views on the issues developing countries face in today’s complex and contentious trading environment, and how she or he will ensure developing countries’ views are heard at the WTO. As of September 7, we have interviewed three of the candidates, whose interviews are below. We will be adding interviews from other candidates as they become available.