Internal EU politics, Latest news, World Trade Organization, WTO crisis and reform

Opinion: The EU risks botching its WTO leadership bid

The European Union’s messaging ahead of the coming selection process for a new director-general for the World Trade Organization is cause for embarrassment, opines Iana Dreyer. But there is still time to change course. 

The rumour mill is abuzz in in the international trade community as more than 160 countries prepare to nominate a successor to Roberto Azevêdo. The Brazilian director-general of the World Trade Organization is stepping down from his post by the end of August 2020 – more than one year before his second term ends.

The move comes at a dramatic time in the world trading system. China’s rise, the United States’ hostage taking of the dispute settlement system and rising protectionism induced by a global pandemic are wreaking havoc with the multilateral trading order.

Given the defining moment we are in, one would have hoped to see the European Union rise to the occasion.

Sadly, everything that is coming out of some ministerial cabinets and the upper floors of the Berlaymont and Charlemagne building is leading many – including yours truly – to shake their heads.

Instead of coming from a position that shows caution, reflection and vision for a world trade institution EU leaders repeatedly say they want to safeguard and reform because its existence and functioning is part of the Union’s vital interests, one sees narrow careerism, internecine management and personnel tussles, and badly concealed power grab desires dictate choices.

There is still time to change course.

Insistence on a European

The first faux pas of the Europeans is to insist the next director-general needs to be a European.

The WTO needs first and foremost a figure that can unite a broad and varied WTO membership. The WTO and GATT already have a long history of – certainly highly respectable – Western White men leading the institution.

If multilateralism is to work, putting yet another such person in place will not necessarily help. We are in 2020. The world has moved on: sad to feel one still needs to break the news to some European leaders.

African countries say their time has come to lead the WTO. Why not start listening – if – and there seems to be a big if – the African group can come up with a credible nominee? There are excellent potential candidates from Africa out there.

It should now be well known and understood by now: nothing in the WTO will happen in future if Africa is not on board. Even thoughtful Commission personnel recognise this. Granted the current United States administration understands this even less.

The European insistence on a European heading the institution also adds to the suspicion that there is a desire to ‘take over’ and ‘dominate’ an institution instead of working with a broad set of countries to make sure the the Geneva trade body can work again normally as soon as possible.

Is nominating Phil Hogan a good idea?

The second faux pas by Brussels is the desire expressed by the European Commission to nominate its own brand-new trade commissioner to the job. This is a third element that can lead to people to thinking Brussels harbours a desire for a European take-over in Geneva.

More deeply, what does it say about Phil Hogan’s motivation for a job he has only held for a few months and for which he hasn’t yet had time to prove himself? It appears there is much support in various Commission ranks for his nomination for many other reasons than the trade portfolio and global trade politics – so much for a grand vision from a Commission that hopes to be “geopolitical”.

If media reports are correct, then Phil Hogan is sounding out other WTO members if there is potential support – not least from the United States. But who in their right mind genuinely believes the US will support Phil Hogan, their nemesis on agriculture and in many other areas? And what happens if the US do rebuff Hogan? Will he have his trade job secured back in Brussels, after having probably done internal damage to DG Trade by merely signalling a desire to leave?

The other European name circulating is Arancha González Laya. Her technical capacities and political charisma are beyond doubt. Ms González could probably even build bridges with many countries including the developing world. But she left the International Trade Centre earlier this year to become Spanish foreign minister. What is more, there is little doubt she will be rebuffed by the US – regardless of which is president sits in the White House. So: Est-ce bien sérieux?

The case for a consensus candidate with broad coalition

The EU actually still has time until 8 July 2020 to come up with a candidate that enjoys broad support among at least like-minded countries such as those from the Ottawa Group, the Friends of the System and among those who signed on to the MPIA – the alternative temporary WTO appeals mechanism – this spring.

A consensus candidate with this group could lead to a nomination that would even potentially pass the difficult hurdle of being accepted by the US administration – most likely the new administration we will see coming to power in 2021.

The new DG will be not be nominated in time for Azevêdo’s scheduled departure on 31 August. Any ‘strong’ WTO chief will most likely be rejected by the US government, especially before the November elections. So we might see a long vacuum. But this interlude might be a good moment to act more prudently and take time to build international consensus.

Catering to careerist urges and expedient internal Commission top echelon managament desires risks backfiring badly and genuinely leaving others to take their place in the WTO driving seat.

 

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