Azevêdo leaves behind a mixed legacy and his successor faces huge challenges.
The World Trade Organization needs a new director-general after the recent resignation of Roberto Azevêdo, effective this August, a full year before the end of his term.
Azevêdo leaves behind a mixed legacy. The Trade Facilitation Agreement, implemented in 2017, is one success. “He was able to marshal the ambassadors to deliver on the first multilateral trade agreement since 1993,” says Simon Evenett, professor of international trade and economic development at the University of St. Gallen in Switzerland.
However, during his tenure, trade tensions increased with no major breakthrough on further tariff reductions. “That was largely due to the disinterest and actual hostility of the United States under [President Donald] Trump and China’s use of trade diplomacy—One Belt One Road—to gain influence through bilateral trade deals,” explains Gavin Graham, a London-based financial analyst.
Achieving consensus on Azevêdo’s successor won’t be easy. “Given the Trump administration’s dislike of the WTO and the ongoing China-US trade battle, it will be difficult to get agreement on someone, especially since Azevêdo’s successor will need to be perceived as in neither camp,” Graham explains.
The new director-general will have a full agenda, but may be constrained in tackling it. “The WTO director-generalship was always a relatively weak position. It’s a system where the [member governments] are in charge,” Evenett explains. “The job is to herd cats, and if the cats don’t want to play, then you have a mess.”
Moreover, since the pandemic exposed the fragility of global supply chains and the risks of being dependent on potential rivals for supplies, it is possible that additional regional trade blocs like the European Union and the United States/Mexico/Canada agreement will further fracture the global free-trade regime.
On the other hand, a serious global recession or depression could serve to increase support for the WTO, and thereby boost the political strength of Azevêdo’s successor.