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Brazil Prioritizes Dispute with Developed Countries at WTO

05/06/2013 - 09h21

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ISABEL FLECK
FROM SÃO PAULO

The final dispute over the Director General position at WTO (World Trade Organization), which will come to an end this week, will be between the advocate for a larger participation of emerging markets in the Geneva System and a representative aligned with wealthy countries, particularly the USA.

At the final stage of the campaign, Brazilian Roberto Azevêdo as well as Mexican Herminio Blanco tried to rid themselves of these labels. However, the division is there, and it could influence not only the voting, but also the term of French Pascal Lamy's successor

Azevêdo, Brazil's representative at the WTO since 2008, has his image tied up with that of a country which is combative to the economies developed in Geneva. Of the 26 motions put forward by Brazil in the Organization - the 4th highest number amongst all members -, 20 were against the USA, Canada and the European Union.

Conversely, most motions against Brazil were put forward by developed countries: of the 14 disputes involving Brasilia, 10 were started by the USA, Canada and Japan.

Azevêdo has two victories against the USA under his belt: one concerning American subsidies on cotton, and the other concerning anti-dumping taxes on orange juice from Brazil.

The explanation for these disputes would be the great volume of trade that Brazil maintains with developed economies. However, China, the country's main commercial partner since 2009, has never been targeted for a dispute by Brasilia.

In Mexico's case, the disputes are more balanced between developed and emerging countries. The country's proximity to the USA - final destination for 77% of Mexican exports - and Blanco's former position of Chief Negotiator for the creation of NAFTA (Agreement with the USA and Canada) makes him a safer choice for Washington D.C.

Fabrice Coffrini /AFP
Brazil's ambassador to the WTO, Roberto Azevedo on January 31, 2013.
Brazil's ambassador to the WTO, Roberto Azevedo on January 31, 2013.

TRUST

Despite being known as a good negotiator in Geneva, Azevêdo, if elected, will have to work hard to "establish trust" with developed countries, says Joshua Meltzer from the Brookings Institute from Washington D.C.

Last week, for exemple, the USA, the EU and Japan united in a WTO forum to question Brazil's tax incentive policies. "Azevêdo's challenge is that, as a representative of Brazil, he held a firm position in the Doha Round (for world trade liberalization) which the USA and other developed countries did not find constructive", Meltzer said to Folha.

When he was a representative of Brazil, Azevêdo never hesitated to blame the USA for the stagnation of the Doha Round, which according to Simon Evenett from St. Gallen University in Switzerland, was "counter-productive".

"There's a lot of blame surrounding Doha. The next Director General of the WTO will have to find a way to move on without dropping the negotiations", he says.

And he will not be able to escape the "north-south" division, which, according to David Rothkopf, editor for "Foreign Policy", is clearly the main division in world trade today.

"The developed countries fear that a Brazilian leadership might put their interests at risk", says Rothkopf, though he also believes that Azevêdo can bring "practical solutions" to both sides.

Fabrice Coffrini/AFP
Mexican economist, former minister Herminio Blanco and candidate for the post of WTO director general
Mexican economist, former minister Herminio Blanco and candidate for the post of WTO director general

THE ABILITY TO DISTINGUISH

Ambassador Roberto Azevêdo claims that Brazil's position regarding developed countries will not be a hindrance to his possible election at the WTO, since members are "perfectly able to distinguish a country from a candidate".

He believes he is not distrusted by wealthy countries. "There could be a distrust if it were a candidacy of the Brazilian government, but it isn't - it's Roberto Azevêdo's candidacy, and that is what is at stake", he tells Folha.

"I have worked with them [representatives of other countries] for decades; I've known them for a long time. There's no area of our relationship that is unknown." During his campaign, Azevêdo tried to separate himself from Brazil's protectionist image and highlighted the need for WTO to have an "impartial" Director.

As a representative of developing countries, Azevêdo would supposedly have an advantage over Blanco: about 75% of WTO's 158 votes belong to that block.

The Brazilian candidate has not said how many countries have promised to support him, but he implies to have the majority of them. "If it weren't over half the votes, I would already be desperate". The votes, which are confidential, will be taken by Tuesday. The formal announcement is expected to happen on Wednesday. It is a four-year term.

Translated by LUIZA LEVY

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