Wanted: New head of WTO

World Trade Organization Director General Roberto Azevedo (left) will leave behind multiple issues, including an increasingly belligerent trade war between the US and China. (AFP)
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Updated 22 May 2020

Wanted: New head of WTO

  • Requirements: Must thrive under global pressure, embrace conflict resolution, and be able to handle big egos

GENEVA: Against the backdrop of a pandemic, recession, US-China tensions and rising protectionism, the World Trade Organization (WTO) needs a new leader. Only the resilient should apply.

Brazilian Director General Roberto Azevedo surprised the WTO’s 164 members last week by announcing he would quit at the end of August, a year earlier than expected, adding to the tumult facing global agencies amid a backlash against globalization.

The Geneva-based body needs a successor by the time Azevedo leaves, or at least by December, when it is set to go into overdrive on a series of issues ahead of its biennial conference in 2021.

That’s a tall order for an organization that hasn’t produced any major international accord in years and decides its chief by consensus.

Even though the WTO is member-led, a strong, charismatic leader is seen as crucial, particularly when the global coronavirus-hit economy faces its worst recession in almost a century and US-China tensions are resurgent.

“These are unprecedented times and the WTO will need a new playbook if it wants any serious role in rebuilding the global economy,” said Kelly Ann Shaw, a partner at Hogan Lovells and a former senior White House official who worked for the US Trade Representative during Azevedo’s selection. “What the WTO really needs is a reformer.”

Over 100 trade barriers have been erected since the coronavirus outbreak. Some states are questioning their reliance on other countries, notably China, for supply. US President Donald Trump has ramped up his criticism of the WTO and the World Health Organization (WHO), which he says are too favorable to China. He described the WTO last week as “horrible.”

The WHO has rejected criticism it is too close to Beijing. The WTO has not commented.

The US and China, which reached a “Phase 1” trade deal in January, appear back at war, with Washington seeking to block chip supplies to blacklisted telecoms giant Huawei.

The US already crippled the WTO’s ability to intervene in trade wars in December after blocking appointments to the WTO body that rules on appeals in disputes.

Spokesman Keith Rockwell admitted the Director General’s role was “one of the most difficult and demanding jobs there is” with a “daunting dossier” of issues.

“But we have clear procedures and I’m sure we will get some outstanding candidates so hopefully things will go smoothly,” he said.

With three of the previous six incumbents from Europe, and the others from Thailand, Brazil and New Zealand, there is pressure to choose a leader from Africa.

Bill Reinsch, a former US Commerce Department official now with the Center for Strategic and International Studies, said there were four possible contenders from Africa: Hamid Mamdouh, an Egyptian attorney at King & Spalding LLP and former WTO official; Yonov Frederick Agah of Nigeria, a WTO deputy director-general; Eloi Laourou, Benin’s ambassador to the UN, and Amina Mohamed, a former Kenyan ambassador to the WTO and now the country’s sports minister.

Agah, Laourou and Mohamed did not immediately respond to requests for comment. Mamdouh confirmed his candidacy to Reuters, saying it was backed by Egypt’s government.

“The issue, as always with Africa, will be whether they can unify behind a single candidate,” Reinsch said.

Previous selections for WTO boss have involved what some former officials describe as a “beauty pageant” involving public events and visits for members to vet candidates.

The coronavirus makes such in-person meetings difficult and virtual meetings in the past month at the WTO have suffered from frozen screens and garbled messages.

Other global bodies like the UN have switched to written votes, but WTO members have thrown in the towel, saying formal decisions can not be made online or in writing.

The formal nomination of candidates has not yet begun but the WTO will wants to avoid a repeat of 1999, when New Zealander Mike Moore and Thailand’s Supachai Panitchpakdi split the vote.

Rohinton Medhora, president of Canada-based think tank the Center for International Governance Innovation, said there would be a “tremendous clash” if Washington and Beijing proposed candidates or sought to play prominent roles in the selection.

A spokesman for China’s foreign ministry said it would defer to “the relevant departments” on the specific task of searching for a new chief and would “maintain close communication and coordination” to ensure a smooth handover.

The US Trade Representative’s office declined to comment, referring to a previous statement from representative Robert Lighthizer saying the US looked forward to participating in the process.

The divisions are not only between Washington and Beijing.

Europe is challenging import tariffs on steel and aluminum imposed on the basis of “national security” by Trump.

National security has also been invoked by Japan in curbs of high-tech exports to South Korea, in a trade dispute between Russia and Ukraine, and a WTO case brought by Qatar against Bahrain, the United Arab Emirates and Saudi Arabia.

 


Bailout will keep Air France-KLM afloat for less than year: CEO

Updated 21 September 2020

Bailout will keep Air France-KLM afloat for less than year: CEO

  • ‘If we base it upon the past few weeks, it is clear that the recovery in traffic will be slower than expected’
  • Governments are coming under pressure to tie airline bailouts to environmental commitments

PARIS: Bailouts provided to Air France-KLM by the French and Dutch governments will keep the airline flying less than a year, its CEO Benjamin Smith said Monday and evoked the possibility of injecting new capital.
In an interview with the French daily l’Opinion, Smith also warned that calls for airlines to contribute more to fight climate change could be catastrophic for their survival which is already under threat due to the coronavirus pandemic.
When countries imposed lockdowns earlier this year to stem the spread of the coronavirus airlines faced steep drops in revenue that have claimed several carriers.
A number of countries stepped in with support, including France which provided $8.2 billion to Air France and the Netherlands which received a $2.9 billion package.
“This support will permit us to hold on less than 12 months,” said Smith.
The reason is that air traffic is picking up very slowly as many northern hemisphere countries are now fearing a second wave of infections.
“If we base it upon the past few weeks, it is clear that the recovery in traffic will be slower than expected,” according to Smith, who said when the bailout was put together the airline was expecting a return to 2019 levels only in 2024.
Smith said discussions were already underway with shareholders on shoring up the airline group, and steps would be taken before the next regular annual meeting in the second quarter of next year.
“One, three or five billion euros? It is too early to put a figure on a possible recapitalization,” he said.
The airline group had $12.12 billion in cash or available under credit lines.
Major shareholders include the French government with a 14.3 percent stake, the Dutch government at 14 percent, as well as Delta and China Eastern airlines which each hold an 8 percent stake.
Governments are coming under pressure to tie airline bailouts to environmental commitments.
One proposal that has come from a citizen’s convention convoked by President Emmanuel Macron would cost airlines an estimated $3.6 billion.
Smith said the imposition of environmental charges on the industry would be “irresponsible and catastrophic” for Air France-KLM.