Is Brazil’s WTO win bad news for Washington?

Several media outlets are reporting that Brazil’s Roberto Azevêdo has been selected as the next director general of the World Trade Organization. He will replace Pascal Lamy, the French diplomat who has led the Geneva-based organization since late 2005. Azevêdo bested Mexico’s Herminio Blanco, a former trade minister, for the top spot.

I argued earlier this week that the chances that the leadership selection will significantly impact the troubled organization are slim. The WTO director general has a limited capacity to budge states on issues as well-worn and highly sensitive as trade. But there were notable differences between the final two candidates. A career diplomat, Azevêdo has been Brazil’s man at the WTO for years. He knows the institution and its dynamcs well and so there may be less of a learning curve than would have been the case with Blanco. During the selection process, the Brazilian highlighted his inside knowledge. "The most distinguishing trait between my candidacy and the candidacy of Mr. Blanco…is that I come from within," he told Agence France Presse.

The men also had quite different policy profiles, in large part derived from their backgrounds and home countries. Blanco, a University of Chicago-educated economist, had negotiated dozens of free trade agreements during his time in government, including NAFTA. Mexico has generally been free-trade oriented. The Economist this week described the country as "one of the most open manufacturing economies in the world…" Azevêdo has a less sparkling record in brokering trade agreements and hails from a country that has at times tilted toward protectionism. For that reason, former Mexican president Ernesto Zedillo suggested to the Wall Street Journal that a Brazilian might not be the best choice for an organization devoted to free trade:

"Brazil has not been the most positive partner at the WTO," said former Mexican President Ernesto Zedillo, who is now director of Yale University’s Center for the Study of Globalization. "Perhaps Brazil doesn’t have the best credentials to lead the WTO. As a country that tends to be protectionist, it’s not a great champion of a multilateral trading system."

In fact, Brazil has struck several blows for free trade in recent years, although it’s not likely Washington remembers those fondly. Brazil challenged U.S. subsidies on agricultural products, including cotton and orange juice. The cotton case, in particular, has often been cited as an example of how emerging powers can use the WTO mechanism to force change from more established powers. 

While U.S. officials were exceptionally tight-lipped about the race, the history of testy trade relations between Washington and Brasilia produced speculation that the United States preferred Blanco while most developing contries were keen on the Brazilian. If so, Azevêdo’s selection would constitute a mild but still unusual rebuff to the United States. For all the talk of rising-power influence, the United States has done well recently in multilateral leadership races and isn’t used to coming up short.

Despite a new and more open selection process, it got Jim Kim through as World Bank president without too much trouble. The United States was pleased to see Fatou Bensouda selected last year as chief prosecutor of the International Criminal Court (though as a non-member, the United States had no formal say in that process). And U.S. officials were quietly happy to see Europe — in the person of Christine Lagarde — retain leadership of the International Monetary Fund after Dominique Strauss-Kahn’s implosion and subsequent resignation.

The past friction between Brazil and the United States on trade likely won’t impact Azevêdo’s ability to get along with the superpower. By all accounts, the Brazilian is affable and diplomatic. What’s more, the United States has seen former trade adversaries ensconsed in Geneva before. Pascal Lamy himself had been Europe’s point person on a series of tense trade disputes with the United States (including the interminable Airbus-Boeing fight) before taking the WTO helm. But if Lamy’s record is encouraging in terms of comity, it’s sobering from a results perspective. All Lamy’s smarts and diplomatic finesse weren’t enough to spark the stalled Doha round negotiations.