Published: 20:17, August 31, 2020 | Updated: 18:39, June 5, 2023
Damaged WTO now leaderless as chief Azevedo steps down
By Reuters

This July 23, 2020, photo shows the empty seat and desk of the World Trade Organization (WTO) director-general prior to a general council in Geneva. (FABRICE COFFRINI / AFP)

GENEVA/BRUSSELS - The World Trade Organization’s director-general Roberto Azevedo steps down on Monday, leaving the already-damaged global watchdog leaderless as it faces the biggest crisis in its 25-year history.

As the WTO’s influence seeps away, rising international tensions and protectionism during a COVID-induced slowdown make reform of global trade rules ever more urgent

As the WTO’s influence seeps away, rising international tensions and protectionism during a COVID-induced slowdown make reform of global trade rules ever more urgent.

“This is indeed a new – though alas not unsurprising – low point for the WTO,” said Rohinton Medhora, president of the Centre for International Governance Innovation. “The organisation has been directionless for some time, several years in fact, and will now be functionally leaderless.”

In particular, the WTO appeals court, which rules on international trade disputes, has been paralysed by Washington’s blockade on the appointment of new judges.

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Azevedo, a Brazilian, is heading for a job at PepsiCo Inc and eight candidates are vying to replace him.

In 1999, a four-month gap leadership vacuum was widely seen as damaging, and guidelines to prevent a repeat envisaged the 164 members selecting a temporary replacement from among four current deputies. But Washington’s insistence on its candidate prevented agreement, leaving a vacuum that will last for months.

US election

In theory, a winner should be selected by Nov 7, under an agreed elimination process that seeks to have a new director-general appointed by consensus.

In practice, trade sources say the uncertainty around the presidential election on Nov 3 in the United States, which has not said publicly which candidate it prefers, could delay matters further. The 2021 budget, due to be set at the end of the year, which Washington might question, could also be a hurdle.

US President Donald Trump has suggested quitting the WTO, although no firm plans have been announced.

Peter Ungphakorn, a former WTO staff member who now writes blogs on trade, said there was a risk of a similar “messy selection” of the next full-time chief, citing trade tensions and members’ unwillingness to compromise over the acting director-general.

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In theory, day-to-day operations can be handled by the deputies, including the director-general’s key role of selecting panellists to adjudicate on trade disputes.

Negotiations to reduce fishing subsidies in particular are supposed to conclude by the end of the year.

But David Tinline, a former adviser to Azevedo, noted that the red-tape-cutting Trade Facilitation Agreement had needed Azevedo’s interventions to get over the line in 2013.

“What we are not going to have is that galvanising force of the DG (director-general), pushing people to solve specific problems,” Tinline said.