WTO top post - battlelines drawn

With Korea, Indonesia, Mexico, Kenya putting up nominations for the post of Director General, WTO along with New Zealand, Jordan and Ghana the race for the multilateral trade body's top post is truly heating up.I have endlessly blogged about it here and here.

Reuters carried a piece not he potential candidates and the likely success stories here.BBC carried an interview about what the top post entails here.

While the developing country-developed country debate permeates the selection process, the multiplicity of candidates from the developing and LDCs is seen as a spoiler for developing countries to succeed. There is another view that the country of origin of the nominee should not matter in the selection process - only competence should. 

Whatever be the outcome of this race (the results would be out in May 2013), certain guidelines on the WTO website from the "Procedures for Appointment of the Director General" adopted by the General Council of the WTO in 2002 are pointers to the way things should move forward:

"1.The appointment process shall be guided by the best interests of the Organization, respect for the dignity of the candidates and the Members nominating them, and by full transparency and inclusiveness at all stages, building on the best practices established over the past years with regard to internal transparency and participation of all Members. 

2.              The overriding objective of Members in this process shall be to reach decisions by consensus."

What is more interesting in the guidelines is the reference to diversity of membership:

"13.  In order to ensure that the best possible candidate is selected to head the WTO at any given time, candidatures representing the diversity of Members across all regions shall be invited in the nominations process.  Where Members are faced in the final selection with equally meritorious candidates, they shall take into consideration as one of the factors the desirability of reflecting the diversity of the WTO's membership in successive appointments to the post of Director-General."

With the majority of Director General's in the past being from the developed world, would the mandate of recognizing diversity indicate that a preference this time should be given to a developing or Least developed country. The coming days of consultation, formation of a consensus and ultimate selection (probably by a vote) by the General Council will ultimately decide that. 

James WIlliamson in a comment on this blog to an earlier post summarized the chances of the candidates well:

"The DG post should be given to an African. There has been a tacit understanding among developing countries that the next DG should come from either Africa or Latin American. It is therefore surprising for Indonesia and Korea to nominate candidates for the post. In the case of Korea, they are being greedy considering that there is a Korean UN Secretary-General and a Korean-American World Bank President. Korea is also represented on the WTO Appellate Body. Countries need to be sensitive when nominating candidates. The same goes for Brazil and Mexico. For a start, Brazil's trade envoy is young and does not have any substantial managerial experience. He has not been a Minister and has not managed anything substantial. Being the head of mission hardly qualifies one to head the WTO. Moreover, as a big player in international trade circles, it is not good for the WTO Chief to come from such a country. Had Lamy come from a small developing country, he could have probably succeeded in bringing closure to the Doha Round. A Brazilian was recently named as the Head of the FAO and they also had someone who competed for the Director-General of WIPO. There is a Mexican currently heading the OECD, so it would be too much for another Mexican to head the WTO. The other candidates do not have impressive credeentials. The Kenyan candidate has never held any Ministerial position and has not distinguished herself in the trade field. She was unsuccessful in her did to become a member of the Appellate Body. The candidate from Jordan is a scientist and has not had much involvement with the WTO and the multilateral trading system. That leaves four serious candidates, Mari Pangestu of Indonesia, Tim Groser of New Zealand, Alan Kyerematen of Ghana and Anabel Gonzalez of Costa Rica. It may be difficult for Indonesia to get the support of other developing countries, for the simple reason that it had been agreed among developing countries that the next DG should come from Latin America or Africa, given that Dr Supachai is from Thailand. It may also be difficult for Tim Groser to be elected for the simple reason that he is from New Zealand, where Mike Moore comes from. Moreover, there is an understanding among developing countries that they will not accept a candidate from the developed World. Between Ghana's Alan Kyerematen and Costa Rica's Anabel Gonzalaz, the Ghanaian candidate has more impressive credentials. It is known that Anabel Gonzalez had a hard time managaing the Agriculture Division of the WTO, so managing the whole WTO would be a challenge which she cannot cope."

Let the battle begin!

China, wine and a trade dispute

Retaliatory trade actions are increasingly becoming common in "protectionist" times. The trend has not spared both the developed and developing world. The latest example is news trickling in of intended Chinese action on wine from the EU - and this time it is an allegation of wine from EU being "dumped" in China.

The official Chinese government portal reported:

"Wine producers have applied to the Ministry of Commerce (MOC) demanding investigations into whether European imports are damaging China's domestic market. 

Wang Zuming, head of the wine division of the China Alcoholic Drinks Association, told Xinhua, that winemakers want the ministry to look into the increasing amount of EU imports and its impact on the domestic industry. 

EU wine imports surged to 169,114 kiloliters, in 2011, from 35,944 kiloliters, in 2008, at an annual pace of 67.71 percent. In the past four years, its market share in China increased from 4.94 percent to 14.76 percent, Wang said. 

Almost every Chinese winemaker has felt the impact from the EU, he said.
The EU has provided various subsidies to the wine industry, putting Chinese makers at a disadvantage, Wang added."

The China Alcoholic Drink Association (CADA), the group representing local Chinese alcohol drink manufacturers, has apparently sought intervention from the Chinese government against supposed "dumping" of wine from the EU in China, basically implying that the price of imported wines in China were below normal price compared to prices back in Europe and that this adversely affected the Chinese wine industry.This has been reported here.

Reuters reporting on the development noted:

"Wine exports from the EU to China have increased sharply in recent years, reaching 169 million litres in 2011, compared with 35.9 million litres in 2008, Wang Zuming, secretary of the association's wine subcommittee, was quoted as saying. 

"Almost all wine enterprises in China have strongly felt the impact of the attack by wine imports from the European Union, with operations, performance and market share seriously sliding," Wang said. 

"The Chinese wine consumption market has shown great potential. By exporting such large amounts of cheap wine, it's obvious they're trying to seize Chinese market share."

Are some EU countries like Spain and France "dumping" cheap wine into china? Or is it just a case of better, competitive, cheaper wine from Europe int he Chinese market? is European wine subsidized in contravention of EU's WTO obligations ? Does china have a claim under the ASCM or the Antidumping Agreement? Some reports of alleged EU subsidies to wine production is found here.

An interesting fact about Chinese consumers and Chinese wine producers is brought out in the reuters piece above:

"Wealthy Chinese consumers show an overwhelming preference for expensive French wine, and Chinese companies and well-to-do individuals are buying multimillion-dollar wine chateaux in France's Bordeaux region."

Are the wine lovers the real losers in China in this battle or are they the insignificant minority whose voice doesn't really have political or business force? Another example of multiple stakeholders in any trade dispute. 

More glasses of wine will be sipped in China as this trade imbroglio unfolds.