Ben Muse

Economics and Alaska

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What Are the Implications of a Lamy WTO Victory?

As part of a gloomy review of trade developments, Irwin M. Stelzer describes the implications of a Pascal Lamy victory in the WTO Director-General race: "Free Trade?" (Truth about Trade & Technology, April 6):
    "The Europeans and the developing nations profess horror at the appointment of Paul Wolfowitz to head the World Bank. They say he doesn't know anything about development, but really worry that he knows too much: that loans to undemocratic kleptocracies might fatten Swiss bank accounts, but do little to fatten starving citizens of so-called developing countries.

    But Gerhard Schröder and his friends were reluctant to oppose the Wolfowitz appointment, lest they appear to be snubbing President Bush's recent friendly overtures. So they approved the appointment, and will seek a quid pro quo--the appointment of France's Pascal Lamy to fill the vacancy at the head of the World Trade Organization. Lamy is dedicated to the maintenance of the European Union's protectionist agricultural policy, which further enriches well-off French farmers at the expense of poor farmers in developing nations. If he is appointed, and spurns Bush's proposal to end both E.U. and U.S. export-inducing farm subsidies, the Doha round is doomed."

Cuttaree to speak in DC

Mauritian Foreign Minister Jaya Krishna Cuttaree will speak at the National Press Club on April 20: Jaya Krishna Cuttaree to Discuss 'Trade and Development: A Vision for a Better WTO' (U.S. Newswire, April 7)

Offshore Outsourcing of Medical Services to India

This sounds like a good thing: "Low Costs Lure Foreigners to India for Medical Care" (New York Times, Saritha Rai, April 7).
    "BANGALORE, India, April 6 - Until recently, Robert Beeney, a 64-year-old real estate consultant from San Francisco, lived in pain. But when he finally decided to do something about the discomfort, he spurned all the usual choices.

    His doctors advised that he get his hip joint replaced, which his insurer would pay for, but after doing some research on the Internet, he decided to get a different procedure - joint resurfacing - not covered by his insurance. And instead of going to a nearby hospital, he chose to go to India and paid $6,600, a fraction of the $25,000 he would have paid at home for the surgery..."
Offshore outsourcing of medical services could play an important role in helping us cope with rising medical costs.

UK Congestion Pricing

John Palmer, at The Eclectic Econoclast, provides an update on London's program of using prices to address congestion externalities: "Congestion and Price Elasticity of Demand" .

Here are links to earlier posts: "The London Congestion Charge is Working".

Two good reads

Two years ago, Kevin Brancato of Truck and Barter scanned and posted a 1948 essay on rent control, by Milton Friedman and George Stigler. Brad Delong found it and linked to it: "Roofs or Ceilings?"

More recently, Ben Bernanke (late of the Federal Reserve Board, recently appointed Chairman of the Council of Economic Advisors), explained "how monetary policy is actually conducted." Brad linked to it: "Implementing Monetary Policy".

Medieval public choice theory

Alex Tabarrok (at Marginal Revolution) points to a paper on "Voting in Medieval Universities and Religious Orders" by Iain McLean and Haidee Lorrey :"Electing a Pope".

The abstract:
    "We report work in progress, not polished findings. As is now popular in political science, we wish to take institutions seriously as both a rational response to dilemmas in which rational agents found themselves and a frame to which later rational agents adapted their behaviour in turn. Medieval corporate agents knew that they needed choice procedures. Although the social choice advances of ancient Greece and Rome were not rediscovered until the high middle ages, the rational design of choice institutions predated their rediscovery and took some new paths. Both Ramon Lull (ca 1232-1316) and Nicholas of Cusa (a.k.a Cusanus; 1401-64) made contributions which, until we rediscovered their work in social choice, were believed to be centuries more recent. Lull promoted the method of pairwise comparison, and proposes the Copeland rule to select a winner. Cusanus proposes the Borda rule, which should properly be renamed the Cusanus rule.
    Voting might be needed in any institution ruled by more than one person, where decisions could not simply be handed down from above. Medieval theologians no doubt believed that God’s word was handed down from above; but they well knew that they often had to decide among rival human interpretations of it. Even if the western Catholic Church be regarded as a single authoritative institution, in which rules were handed down from on high, it faced its own decision problem every time a new Pope needed to be elected. Bodies not directly in the hierarchy of the Church had to evolve their own decision procedures. The chief such bodies were commercial and urban corporations; religious orders; and universities."

What Does Jaya Krishna Cuttaree Think?

Jaya Krishna Cuttaree, the Foreign and Trade Minister of Mauritius, is one of the four candidates for Director-General of the World Trade Organization (WTO).

Here is a favorable profile from the Inter Press Service of Johannesburg, March 10, by Stefania Bianchi, "Trade: Poor Countries' Man Makes a Strong Case", and here is his biography from the WTO web site: "Jaya Krishna Cuttaree".

Mauritius is a small island country in the Indian Ocean. A well governed democracy, it's had a remarkably good growth record. For some background, look at this article by Arvind Subramanian from the IMF magazine, Finance & Development: "Mauritius: A Case Study".

Cuttaree's candidacy has been endorsed by the African-Caribbean-Pacific (ACP) grouping of countries. This is a group of smaller developing countries with historical colonial ties to Europe; they benefit from European tariff preferences (tariff breaks).

In this post I've culled selections from a few of Cuttaree's speeches, to get a better idea of some of the things he stands for. The starting point for this post is a speech he gave to the Mauritius Chamber of Commerce and Industry this past March.

In this speech, he points to the importance of trade to developing countries, points to the problems many of these countries may have in taking advantage of trading opportunities that may open up to them, and argues for the importance of various measures to help them out. I've used other speeches to flesh out some of his points, and to shed light on his negotiating philosophy.

Trade is important to developing countries

In the Chamber speech, he explained the importance of trade to developing country growth.

He argues that trade isn't an end in itself, but promotes the underlying objective of better living conditions. From the point of view of the developing world, trade is one of several factors, which also include aid and debt-relief, for achieving sustainable development.

However, trade is the most important of these factors: "Trade can be a catalyst in developing a country's productive capacity and growth and lift millions out of poverty and the shackles of marginalisation."

So trade is extremely important to developing countries. The development of a rules-based trading system through the WTO may be more important to smaller developing countries, than to developed countries, or larger developing countries,
    "“an effective and equitable multilateral trading system is in the general interest of every Member. But it is even more vital for us, weak and vulnerable developing countries which have very little economic clout in the world economy. The major players have the option of negotiating bilateral FTA’s and choose those with whom they want to deepen integration. We do not have such options. Only a rule-based trading system will offer the best protection to the rights of small players” (quoting himself from an earlier speech)
Developing countries may need special help to take advantage of trade opportunities

In the same speech, he pointed out that more liberal trading rules will only help countries that have something to trade. Many developing countries, especially small ones, need help here. They can't "produce competitively"; they face "supply side constraints."

On January 26, after addressing the WTO General Council, he participated in a question and answer session sponsored by a group of NGOs. One of his answers, summarized by session organizers ("Minutes of Civil Society Hearing for WTO Director-General Candidates"), gives a better sense of the "supply constraint" issue. It also indicates that some developing countries have more difficulty with supply contraints than others:
    "However one also has to be extremely careful about proposing liberalization of agriculture trade. Because when people talk of developing countries producing more agriculture products if trade liberalized we make a fundamental mistake because developing countries are not a homogenous group. You take a country like Brazil and Mali, both developing countries, however capacity to produce to take account of increased market access are completely different. Africa lives off agriculture. Mostly peasant farmers, and those proponents of liberalized agricultural trade use Africa as an example of a continent which can benefit from increased market access. He says there is a big flaw in that statement because of the capacity to produce competitively in Africa. No roads, ports, refrigeration, SPS problems. Unless these supply side constraints are actually addressed the liberalization of markets in agricultural products is going to benefit a certain number of countries and certainly not the majority of people who we think are going to benefit from that liberalisation...He can see very easily in the case of poultry some large developing countries killing the poultry industry in many parts of Africa."
While small developing countries may need help with supply constraints, he says in his Chamber speech that, " is not WTO's role to address supply side constraints." The WTO does have a "duty to raise awareness of the problem..." and it is "imperative" to encourage meetings between the heads of WTO, the World Bank (WB), and the IMF, to encourage "collaboration" and program coherence. In the NGO session described above, he went on to discuss the role of the WTO, and that of other multilateral organizations, in addressing these supply constraints. From the minutes:
    "This is why he says that if you are looking at the liberalization of agriculture trade you must have a coherence between market access and capacity to produce, to have coherence between the WTO and institutions like the WB and development partners like the EU to ensure that the resources are there to build the capacity of these countries in Africa to be able to take account of this access..."
Special and differential treatment for developing countries

In the Chamber speech, he notes that countries differ, and the WTO should address the distinctive needs of developing countries. These countries need special and differential (S&D) treatment within multilateral WTO trade treaties.

S&D means more than "a system where developing countries were simply given more time to adapt to negotiated trade rules through temporary exceptions and exemptions." "Temporary exceptions and exemptions" could be things like slower implementation of tariff reductions.

Affirmative and longer term action is necessary. Measures are needed, "to establish rules that can foster development and to come up with measures that will enable developing countries to implement these rules and to reap the benefits of further trade liberalisation."

Examples of of these additional measures may be inferred from these Cuttaree remarks, from 2002, ("Rules Issues and Special and Differential Treatment"):
    "There are several instances where the WTO Agreements impose onerous obligations upon developing countries and restrict them from taking initiatives and measures to achieve industrial development (e.g. Subsidies, TRIMs and TRIPS).

    The Agreement on Subsidies curtails the right of developing countries to extend assistance and support for industrialization. It eliminates the acceptability of subsidies as a tool for economic development programmes, which however has been agreed to during the Tokyo Round.

    The Agreement on trade-Related Investment Measures (TRIMs) imposes an obligation on developing countries to eliminate the type of investment promotion policies that developing countries could use to promote domestic industry (i.e. obligation on foreign investors to indigenize part of domestic production)..."
Small developing countries need tariff preferences

Many of the least developed countries depend on exemptions or partial exemptions from normal developed country tariffs (tariff preferences) to give them a competitive boost. Negotiations that reduce normal developed country tariffs, erode the effective size of these preferences, and the competitive advantages they provide ("preference erosion").

An IMF publication titled, "Who Can Explain the Mauritian Miracle: Meade, Romer, Sachs, or Rodrik?" suggests that there is disagreement on the sources of Mauritian growth. However, this Cuttaree speech from the WTO Minister's meeting at Cancun in 2003, leaves no doubt that he attributes a lot of this growth to trade preferences granted to Mauritius: "Statement Circulated by the Honourable Jaya Krishna Cuttaree Minister of Industry and International Trade":
    "The positive economic development of Mauritius during the past three decades has been mainly due to a combination of factors, including a stable and democratic political system, good governance but above all due to the preferential market access that we have been enjoying on the EU and the United States markets both for agricultural and non-agricultural products. This access is absolutely essential to countries like mine which do not have the capacity to compete with larger, more resource-based countries.
    This preferential access has been instrumental in ensuring the economic development of Mauritius...

    From the Mauritian experience, it can be safely assumed that through the extension of preferential access, even the most vulnerable of countries can pursue a successful development and export oriented policy..."
Helpful as preferences are, in March he told the Mauritian Chamber of Commerce,
    "We have consistently explained that preferences cannot permanently be part of a trading system which will ultimately lead to free flow of goods and services across national borders. However, given the disparity among levels of development of WTO members and the importance of preferences to weak and vulnerable economies, preference erosion needs to be carefully sequenced so that it does not signal the end of these economies..."
If one point of the trade negotiations is to lower tariff levels, and if the preferences derive their value from the height of the tariffs, there is a problem. A 2003 Mauritian paper on preferences, submitted to the WTO, (TN/MA/W/21), suggests some ways out:
    "4. When examining the problem of preference erosion, it is essential to keep in view that, from the perspective of the exporting country, preference erosion would be particularly serious where exports are concentrated in a limited number of products on very few export markets. As a matter of fact, this is the most important feature characterising exports under preferences. While preference schemes, in principle, could cover most, if not all the chapters and tariff lines..., in practice, however, exports are limited to very few products and a limited number of tariff lines.

    5. Consequently, addressing preference erosion would effectively mean maintaining tariffs over a certain level for a very narrow range of products, especially since the export basket of the preference beneficiary countries is almost the same...

    6. ... products which are of specific interest to the preference beneficiary countries, in particular textiles and clothing, leather products, footwear and fish and fish products. ..only a limited number of specific tariff lines within these broad product categories are of direct concern to these countries. It is proposed that these tariff lines be identified by the countries concerned and a list compiled by the WTO Secretariat. It is further proposed that such tariff lines be either excluded from tariff reduction or that a maximum tariff reduction of 10% on each tariff line so identified be staggered over 10 annual instalments on developed country markets...

    8. Necessary technical assistance should urgently be provided, particularly in regard to the identification of the tariff lines referred to...

    9. We are further reiterating our proposal for the setting up of a competitiveness fund in the context of global coherence policy making by international financial institutions in order to assist the industrial restructuring and adjustment of countries most affected by the reductions/phasing out of tariffs."
One advantage of this approach is that, "the momentum of tariff liberalisation would not be disturbed since only a very narrow range of products would be excluded from the process..."

Approach to negotiations

I thought these remarks to the ACP country trade ministers, shortly before the July 2004 Geneva meetings suggested an attractive combination of principle, pragmatism, and respect for other parties to the negotiations. They're not connected to the Chamber speech, but I'll pass them along: "Speech at the Opening Ceremony of the 8th Africa-Carribbean-Pacific Trade Ministers’ Meeting, 11 July 2004":
    "A negotiation has two dimensions – it involves a process and it has a substance...As regards our negotiating substance, I shall refrain from making any elaborate comment at this stage...

    ...I would like to make a few comments on the process, a consideration that is often neglected although the process may have a significant bearing on the substance. First, at our own level, it is important that we understand that a negotiation is a dynamic process and in a multilateral setting, it will demand constant adjustment and trade-offs. It is therefore important that we transcend our declaratory postures to move into a negotiating mode. It is important that we learn from the lessons of Cancun so as not to be pinned down in the blame game once again. We have the numbers but this is not enough. We must know how we utilise our strength and how we might bargain and persuade and avoid being only negative. We must also learn to seek and broaden our alliances at the WTO so as not to remain isolated.

    It is therefore important that we infuse in our stance the right measure of tactical flexibility that will avoid us becoming prisoners of our strategy thus preventing us from participating meaningfully in the negotiations. Of course we must define the red lines below which we are not prepared to cross. But at the same time we must be aware that our partners have their compulsions as well. It is therefore important that we adopt a problem-solving approach as a negotiation cannot be a one track affair nor can there be a winner-takes-all outcome.

    Another important aspect is how we focalise on our core issues and prioritise our concerns. In this regard we must put to profit our meeting here to-day. We know what our concerns are and as I said earlier, we have spelt them out in several declarations. As we move towards the writing of the Framework Agreement, it is important that we prioritise those issues, prepare fallback positions and trade-offs and most importantly request our trade experts to develop the sort of language that we would like to see on our concerns in the framework text. It is important that in so doing, we do not open the pandora’s box. Whatever be our convictions, the point of departure of these negotiations remains the Doha mandate to which we have all subscribed. It is important for us to be credible and not to seek to unravel a document which is a delicate compromise and to which we were a party. Success for us will depend on the perception that we are not a Group that just has the numbers to block consensus but, on the contrary, that we have in us the capacity for constructive engagement to put forward ideas and solutions.

    As we engage in our deliberations at the level of the ACP, we must be conscious how our meeting dovetails with other processes in which we will be involved. In two days time, we shall move into the larger G-90 Group and from there on we must interface with the larger process on-going in Geneva. In both these instances, we shall have to integrate the concerns of other negotiating groups which may have the same defensive interests as ours but also certain offensive interests which may not be quite ours. We must be able to reconcile those contradictions in a creative manner so that we ensure a balanced outcome with no losers.

    In the final analysis, however, I would also like to make one thing clear. In as much as we would like to be constructive and show the required flexibility, we cannot be flexible or be constructive in a process if it is not transparent. We can only do so if the bigger process at the WTO is an inclusive one and we are allowed to participate."

More coverage of Zoellick remarks on Lamy

U.S. Deputy Secretary of State Robert Zoellick has been in Europe for several days. On Monday and Tuesday (April 4 and 5) he answered interview questions about the WTO DG race. I've posted transcripts of his answers here and here.

The posts above link to early coverage of the story. Here's some links to additional coverage. The Calcutta Telegraph headlined a Reuters story, "US to back Lamy as next WTO chief". MSNBC's headline on an AP story read, "U.S. supports EU's pick to head WTO". "US supports Lamy for head of WTO". The National Business Review of New Zealand: "World Trade: Lobbying starts for next leader". The stories themselves show that Zoellick stopped just short of a formal endorsement of Lamy over the other candidates.

Bloomberg News (via India's Financial Express, April 6): Lamy is `Strong Candidate' for Top WTO Job: Zoellick supplemented the story with two paragraphs on potential congressional opposition to Lamy:
    "The Bureau of National Affairs last month reported that Lamy faces ``substantial opposition on Capitol Hill'' for his decision during his final days as European Union trade commissioner in November to take the U.S. to the WTO over tax legislation...

    Citing unidentified staffers for Senate Finance Committee Chairman Charles Grassley of Iowa and House Ways and Means Committee Chairman William Thomas of California, BNA said the two legislators ``are angry with Lamy over his decision'' to challenge the U.S. over a tax law that replaced earlier legislation that had been deemed illegal by the WTO. "
Revised 4-6-05

Transcript of Zoellick's April 5 remarks on Pascal Lamy's WTO DG candidacy - transcript

Deputy Secretary of State (and former US Trade Representative) Robert Zoellick is traveling through Europe this week.

Today, in a press conference with Elmar Brok, the Chairman of the European Parliament's Foreign Affairs Committee, he was asked about Pascal Lamy's candidacy for WTO Director-General.

Here are the question and the answer (from "Press Availability With Elmar Brok, Chairman, European Parliament Foreign Affairs Committee. Deputy Secretary Robert B. Zoellick. European Parliament. Brussels, Belgium. April 5, 2005" ):
    "Question: ...And my second question to you as well: The European Union has nominated Pascal Lamy as a good chief of the WTO. With your personal experience of dealing with Mr. Lamy, do you think he’s a candidate that the United States could back as well, and what do you think the developing world will think about that?

    Deputy Secretary Zoellick: ...As for your comment about Commissioner Lamy, I obviously consider Commissioner Lamy both a friend but more importantly a very accomplished trade leader. And so I have said all along, and the United States has said, that we believe that he would be a very strong candidate for that position.

    The process for the WTO selection is different than some other processes. What is happening is that the chairman of the general council, who is actually a chairwoman – she’s ambassador from Kenya -- is undertaking consultations with the help of a Canadian official and one other with all of the member states. Now the United States is a big player in the WTO process. Sometimes our support helps; sometimes it doesn’t help. In this case we’re just one vote of many. But we’ve made very clear that we’d be very comfortable with Commissioner Lamy and that I think that he could play a strong role. There are other good candidates as well.

    Now, I spoke with Commissioner Lamy shortly before I took this trip, and I know he’s also planning to visit the United States, which I encouraged him to do. The other candidates have done that, and this would give him an opportunity to talk to members of our Congress, meet some of the officials in the executive branch and others. But I think the WTO would be very well served by his candidacy, but there are some other good candidates as well."
Zoellick was also asked about Lamy's candidacy on April 4, in Portugal. This post has a transcript of his comments there:"Zoellick remarks on Lamy".

Zoellick remarks on Lamy

Deputy U.S. Secretary of State (and former U.S. Trade Representative) Robert Zoellick commented on Pascal Lamy's candidacy earlier today. Aine Gallagher and Marie-Louise Moller report in this story:"U.S. says Lamy 'strong candidate' for WTO top post" (Reuters, April 5).
    "Former EU trade chief Pascal Lamy is a strong candidate to head the World Trade Organisation but there are also other good candidates, the United States said on Tuesday..."
Among other things, Zoellick told a news conference that Lamy would be a "strong candidate," that "The WTO would be very well served by his candidacy but there are other candidates as well," and that "we have made very clear that we'd be very comfortable with (former) Commissioner Lamy and that I think he could play a strong role."

The day before, on April 4, Zoellick was interviewed by the Portuguese newspaper Público ("Zoellick, in Portugal, Discusses Mideast, Russia, Airbus, China"). Here are related remarks on this issue:
    "PÚBLICO: Last questions. Is the Administration prepared to support the European candidate to WTO Pascal Lamy? To kind of reciprocate the European support of Wolfowitz?DEPUTY

    SECRETARY ZOELLICK: There's no reciprocity on Wolfowitz. Now Commissioner Lamy and I work very closely together. I consider him a personal friend. And, you know, we have, you know, interviewed all four candidates. But in the discussions, I've emphasized how I think Commissioner Lamy would be a very strong candidate, and I have no doubt that he would be able to rise above the European perspective and serve the overall WTO. Now there are other good candidates as well. The way that process is working, is, in Geneva, in the WTO, countries are having consultations with the Chair of the General Council from Kenya and expressing their preferences. But you know, we made very clear that we'd be very comfortable with Commissioner Lamy, or Pascal Lamy as the WTO Director General. And in part, I think whoever the WTO chooses, we need to have somebody who is strong, intelligent, can work with diverse groups to help get the Doha round done. That's the key objective here as we go forward."

Not all developing countries are alike

Alan Beattie and Frances Williams look at key differences between developing countries, and the implications of these for the WTO Director-General race, and the Doha Round trade negotiations: "Who's for the WTO?" (Financial Times, April 4)

Many of the least developed countries depend on tariff breaks or preferences from more developed countries, to give them a competitive boost. Trade negotiations that reduce normal developed country tariff barriers will reduce the effective size of these preferences, and the benefits they provide ("preference erosion").

Beattie and Williams point out that:
    "...those developing countries that benefit from special preferences allowing them easier access to rich markets are concerned that a general liberalisation deal - even one in which they were asked to cut their tariffs by less than rich countries - would see the value of those preferences fall. This would hand export gains to other countries, particularly G20 developing nations such as Brazil, South Africa and Argentina that have relatively efficient and competitive agricultural exporters.

    Such "preference erosion", which sets developing countries against each other, has become a large issue in the Doha round. Some aspects of the issue have been around for years - the most obvious one being the Caribbean banana-producing nations that have privileged access to the EU market at the expense of mainland Latin American growers and are seeing the value of those preferences reduced by a reform programme. But a swath of poor nations, in other groupings such as the G33, which brings together countries wanting to protect particular agricultural products, or the G90, which includes the world's poorest countries, share similar concerns about protecting their farmers from the onslaught of low-cost competition...

    There is a sense among some other nations that countries such as Brazil and India that dominate the G20, although they are frequently regarded as bellwethers for the developing world, also have their own sectional interests. Together with Australia, the EU and the US, Brazil and India made up an ad-hoc grouping of "five interested parties" that was instrumental in pushing through the agricultural part of last August's framework agreement. But Mr Meléndez says other nations, particularly those that are net importers of food, were resentful at the lack of communication and consultation from that small group...

    These tensions spill over into the race for the director-general position. Any candidate wishing to be seen as the champion of the developing world has to make clear that he can bridge the divisions. Mr Cuttaree, whose country
    [Cuttaree is the Foreign Minister of Mauritius - Ben] is one of the most prominent beneficiaries of preferences and whose core support comes from mostly very poor African, Caribbean and Pacific (ACP) nations, has argued for preference-dependent countries to be given more time to adjust. He complains that this has led to him being caricatured as a defender of special treatment...

    ...He sees no contradiction between his position and support for more open global trade, saying his commitment to the Doha round was amply demonstrated by his role in bringing the G90 developing countries back to the negotiations after the collapse in Cancún.

    From the other side of the divide, Mr Seixas Corrêa denies developing countries are split into irrevocably warring camps. Brazil and other competitive exporters recognise the concerns of preference-receiving countries, he says. "We have stated clearly that this is a problem that has to be resolved."

    Mr Pérez del Castillo's home country, Uruguay, is in a similar position to Brazil, having recently joined the G20 and also belonging to the "Cairns Group" of farm exporters, which favours agricultural liberalisation. Several such nations, including Australia and New Zealand, have declared their support for his candidacy. But Mr Pérez del Castillo stresses the breadth of his support from developing countries in order to insist that he will not be beholden to any single group. "I also have Indonesia on board, which is a net food importing country, and Singapore, which doesn't have any agriculture," he says...
    Countering the factors dividing the developing world, there are some that bring them together. Developing countries generally maintain a public stance of solidarity against rich countries in the WTO, for example..."

The WTO Race - Who's Ahead, and the Wolfowitz Factor

Patrick Baert of Agence France-Presse reports on the state of the WTO Director-General race, a day or so into the consultations process: "Shadow of Wolfowitz hangs over WTO amid US-EU bargain fears" (via, April 4).

Consultations began Monday. Baert passes on one diplomat's conjecture that Lamy and Perez del Castillo are the frontrunners, but that a lot will depend on fluctuations in support as Seixas Correa and Cuttaree withdraw.

Baert's assessment the sources of support for the different candidates:
    "Lamy formally has the backing of the 25 EU member states, which traditionally tries to perform in unison at the WTO.

    Perez del Castillo, a former Uruguayan diplomat, has support from some Latin American countries -- with the notable exception of Brazil, Cuba and Venezuela -- and major farm exporters like Australia and New Zealand.

    Cuttaree has official support from the 56 countries in the African, Caribbean and Pacific (ACP) grouping, but Paris has pressed francophone African countries to swing behind Lamy, according to a European diplomat.

    Seixas Correa has received the support of China, a fellow heavyweight in the G20 group of developing countries that opposes farm subisdies."
The nomination of Paul Wolfowitz continues to loom in the background as a potential source of resentment and contention:
    "Developing countries have raised concerns about the United States and European Union tacitly sharing out the top posts at the major international financial institutions, including the WTO...
    Media reports have suggested that the appointment of Wolfowitz... was backed by the Europeans in exchange for US support for Lamy at the WTO.

    "I hope there is no truth in this story of an understanding: if everything is shared between a few players, it means there is no space for other people," an ambassador for an Asian country at the WTO commented..."

Do 60 countries support Perez del Castillo?

The Chinese news service Xinhua passes on Uruguayan press reports that the Foreign Minister is claiming that 60 countries support Perez del Castillo for WTO Director-General: "60 countries back Uruguayan candidate for WTO head" (dated April 2).
    "Some 60 countries support the Uruguayan candidate Carlos Perez del Castillo to be the next general director of the World Trade Organization (WTO), local press quoted Uruguayan Foreign Minister Reinaldo Gargano as saying on Saturday."
The story also indicates that Uruguay's new left-wing government continues to support Perez del Castillo, a candidate originally put forward by a government to its right:
    " "Uruguay keeps on supporting Perez del Castillo. This has been said before, by the president (Tabare Vazquez) to his Brazilian counterpart, Luis Inacio Lula da Silva, and in a very clear form we keep that position," Gargano told a press conference Friday evening upon his return to Montevideo from Brazil, where he accompanied the president on a visit."

Crowell and Moring's "Doha Developments Update"

The Crowell and Moring law firm publishes a weekly web newsletter on the Doha Round negotiations, the: "Doha Development Update"

Recent issues have been carrying short updates on the week's events in the WTO Director-General race. The most recent issue (March 25) talks about the lobbying efforts of the Brazilian candidate, Luiz Felipe da Seixas Correa, at this month's meeting of the G-20 developing countries in New Delhi: "Seixas Correa Garners Support at New Delhi Meeting"
    "Indian trade minister Kamal Nath indicated to Brazil's Amorim during the G-20 conclave in New Delhi that India planned to support the candidacy of Brazil's nominee, Luiz Felipe da Seixas Correa for the WTO's Director General post. China and South Africa also indicated support for Seixas Correa, although Pakistan was more guarded (and may throw its support, at least initially, to Pascal Lamy). Mauritius candidate Jaya Krishna Cuttarree also attended the New Delhi meeting and sought support from attendees for his bid. The four candidates have about another week to firm up support from Members before the General Council chair Amina Chawahir Mohamed (Kenya) begins her canvassing of delegations for their formal positions in the winnowing-down process that is set to begin in April."