What Does the WTO Need From its Next DG?
The WTO is going through a leadership transition. After 8 years the incumbent Director-General (DG), Pascal Lamy, steps down on September 1, 2013. Who replaces him matters. First, because the WTO is not generating the trade liberalization and policy reforms that will stimulate investment and job creation—a key issue given the grim economic situation today. Second, to safeguard past achievements: the rules-based multilateral regime was created to help prevent a recurrence of nationalistic trade policies and conflict. It provides a platform for communication and for nations to sit down together to agree on rules of the game and resolve disputes in a peaceful manner. It is critical there be a strong voice that reminds all stakeholders why the system was created.
The WTO is going through difficult times: after 12 years of talks the Doha round is deadlocked; the US and the EU, traditionally bulwarks of trading system, are pursuing regional agreements to address issues that are (should be) on the table in the WTO. Prominent examples are the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership talks; others have followed down this road as well. The proliferation of preferential schemes is a major challenge and raises legitimate doubts whether the WTO can deliver trade opening deals.
We believe the WTO continues to have a vital role to play. Although the DG cannot force governments to do anything, s/he should help the membership identify options that can promote growth in ways that do not undermine the multilateral trading system. On many issues the world can gain more from multilateral deals than going plurilateral: regulation of subsidies, trade facilitation and trade and development are obvious candidates that are on the Doha round agenda; the same applies to “new” areas such as trade measures aimed at environmental objectives.
In our view the next DG must get members to go beyond “business as usual”. The WTO needs to engage more directly with two key constituencies – the business community and regulators – to ensure that its work on trade issues addresses priorities that will have a significant economic impact.
In Race for the WTO Director-General Job: Seven Candidates Speak, seven contenders for the job discuss the challenges confronting the WTO and their vision for moving forward. Their views are summarized succinctly by Rob Howse [here]. Now that we have a set of views from the candidates we are interested in hearing what others think. Some questions that come to mind:
- Should the DG be an experienced politician or does the organization need a leader with business or non-government management experience? Would for example a former CEO of a multinational be better able to ensure that WTO activities address priority policy issues that matter for job creation and economic growth?
- Should the DG spend his/her energy on trying to conclude the Doha round or try to manage a process that leads to an alternative agenda for the organization?
- Should the WTO (and its DG) be more pro-active in reaching out and engaging with business and other stakeholders?
- Should the new DG maintain the role the WTO has been playing in initiatives such as Aid for Trade, or should it rethink this involvement? Was the move to focus more on development issues a mistake in diverting the focus from its core business or is this an essential element for making progress in extending the rules-based trade regime?