Ms. Park’s Dubious Idea

posted by
on February 12, 2013

By Greg Rushford

 During her successful campaign to become South Korea’s first female president, Park Geun-hye projected intelligence and a calm strength under pressure. She’s sure going to need those qualities.

Imagine walking into such a job. Since her December election triumph, the Korean won has appreciated so much vis a vis the Japanese yen that the value of Korea’s exports — which amount to about a third of Korea’s GDP — could fall this year by six percent, or even more. Projections on new Korean domestic job creation this year are pessimistic. Not to mention the continuing threats from a hostile, impoverished North Korea, which announced earlier today that it had successfully tested a “miniaturized atom bomb,” while working on missiles that could reach the U.S. west coast. It’s a good guess that Park, who turned 61 last week, has been way too busy to enjoy a proper birthday party.

Too busy, perhaps, to think everything through properly. Even before the president-elect will be sworn into office on Feb. 25, she has run into several political controversies. The Korean press has criticized her presidential transition committee for being overly secretive. Her first choice for prime minister had to step down when questions were raised about his ethics and finances. And President-elect Park has set off a firestorm in the National Assembly by picking a fight with Korea’s respected Ministry of Foreign Affairs and Trade. This fight with Mofat’s diplomats — which is widely interpreted overseas as both unnecessary and unhelpful — has caused great consternation. Indeed, Park has given worried Korean trading partners good reason to ask whether South Korea’s trade relations under her administration will be headed, well, south. Read the rest of this article »

On Jan. 29 at the World Trade Organization’s headquarters in Geneva, the nine candidates who are in the running to replace the outgoing Pascal Lamy as the next WTO director-general will present themselves in a formal, public meeting of the General Council. Then they will mostly get on the road, making their cases to the powers-that-be in various world capitals. After several months of gradually winnowing out the field in discrete private consultations with interested officials from the WTO’s 157 member countries, the General Council will pick the “consensus” winner by May 31. The winner will take office on Aug. 31, and then have three months to prepare for the WTO’s next ministerial meetings, to be held the first week of December in Bali.

 On Monday, I reported why veteran WTO watchers consider this election to be especially important for the venerable multilateral institution’s future, citing the prescient warning from economist Jagdish Bhagwati that the WTO is now in real “danger.” And I reported on the qualifications of three of the nine candidates who come from the Asia-Pacific: Tim Groser of New Zealand, Indonesia’s Mari Pangestu; and Taeho Bark, South Korea’s candidate. Today, the rest of the field.

 Three come from Latin America, two from Africa, and one from the Middle East. Altogether, it’s a strong field — although it is not clear which of the nine would exercise truly strong leadership. Nor is it clear that the top political leaders in major world capitals really are focused on the importance of selecting such a leader. And as outgoing Director-General Lamy has learned, without that necessary backing, no WTO head, no matter how dedicated and energized, can stop the institutional drift.

 We left the story off with South Korea’s candidate, Taeho Bark, a man whose career has risen in tandem with his country’s admirable economic growth. As his country’s trade minister, Bark has taken heat from both Korea’s domestic automakers and the Detroit auto lobby — each of which has accused Minister Bark of not doing enough to advance their own agendas. Bark explained that such political fire comes with the territory, especially when emotions run high in the international trade arena (which is to say, most of the time).

Speaking of an admirable quality of learning to handle the inevitable political heat that is part- and parcel of international trade negotiations, consider Anabel Gonzalez. She’s Costa Rica’s candidate to lead the WTO.

Gonzalez has long been a rising star in her country’s trade ministry. She graduated with highest honors from the University of Costa Rica’s law school, and earned her masters in law in 1988 from Georgetown University Law Center, in Washington, D.C.

From 1991 to 1997 Gonzalez was director general for international trade negotiations in Costa Rica’s foreign-trade ministry. In that capacity, she was her country’s chief negotiator in the FTAA — the acronym for the Free Trade Area of the Americas — process. She was also the coordinator of Costa Rica’s positions in the Gatt’s Uruguay Round. During that period, Gonzalez handled politically charged negotiations with the European Union and the United States over banana-import issues. She was also involved in bringing Costa Rica’s successful challenge in the WTO’s dispute settlement process to the protectionist U.S. restrictions on Costa Rican underwear.

Gonzalez was special ambassador for U.S. trade affairs from 2002 to 2004, during which time she was Costa Rica’s lead negotiator for the DR-CAFTA preferential trade deal. Before that, she was chief negotiator for her country’s preferential trade accords with Canada, Chile, the Dominican Republic and Panama. President Laura Chinchilla tapped her as trade minister in 2010.

Gonzalez’ memorable performance during the stormy 1999 WTO ministerial meetings in Seattle is worth noting. That ministerial, President Bill Clinton anticipated, would launch a new multilateral trade liberalizing round, a Seattle Round. It didn’t happen — thanks to the same Clinton, who made an uncharacteristic political blunder and precisely the wrong time.

The Seattle ministerial is mostly remembered for the emergence of the vociferous band of anti-globalist protestors who trashed the streets, egging on the collapse of the ministerial meetings. But inside the closed-door meetings, the atmosphere was even more poisonous. Representatives from the WTO’s poorer member countries were outraged when they read on the first day of the ministerial what Clinton had said in an interview with a Seattle newspaper reporter. The American president basically sank the launch of the “Seattle Round” by suggesting that economic sanctions might be imposed upon countries that failed to meet the protectionist AFL-CIO’s notion of “fair trade.”

And when emotions were running the highest in Seattle, Gonzalez happened to chair the trade and labor group’s meetings. Those meetings were perhaps as stormy as it ever gets in the international trade arena. By all accounts, Gonzalez handled herself with aplomb — even courageously, at perhaps the moment when the WTO’s current institutional drift began. There would be no Seattle Round. The Doha Round, launched two years later, is still stuck on the same tensions between the wealthy developed WTO member countries, and the (sometimes rightly) resentful poorer ones. But now, if the test for the next WTO leader is a demonstrated ability to demonstrate leadership under fire, Gonzalez long ago passed it.

Gonzalez is also well connected to leading international trade circles, serving for instance as chair of the World Economic Forum’s Global Agenda Council on Trade. But she does have some detractors — although nobody has spoken out for public attribution — stemming from what was apparently a turbulent tenure as director of the WTO’ agriculture and commodities division from Feb. 2006 – Jan. 2009. Gonzalez recalls that “the time I spent at the Ag Division was a highly charged time, particularly the year 2008, as it was a moment of very intense negotiations in the context of Doha — we were probably as close as ever to have reached agreement.” With the stakes so high, adds: “I saw a lot of shouting” by just about everyone. But “all this is water under the bridge, as it should be in the context of professional relations in my view.”

At least Brazil’s candidate, Roberto Azevedo, doesn’t have to worry about personal jealousies. Azevedo, who is Brazil’s ambassador to the WTO, could be the most well-liked trade diplomat in Geneva, a city where charm is an especially valuable political currency. But Azevedo’s “problem” could be a bigger one: regional jealousies. And those might not be dismissed so lightly.

The reference is to the political dynamics that always seem to be in play when Brazil and Mexico have competing interests in Latin America. Each of these two countries, it often seems, love nothing better than to assert its own regional influence by knocking the other. And Mexico’s candidate to head the WTO, Herminio Blanco, is a heavyweight.

Blanco’s heavyweight credentials begin with the Ph.D. in Economics he earned at the University of Chicago in 1978. His career quickly took off that year: he became senior advisor to Mexico’s finance minister. Blanco taught economics at Rice University, in Houston, Texas, from 1980 – 1985; from 1985 – 1988 he was a member of the Council of Economic Advisors, which advised President Miguel de la Madrid, an economic reformer.

As vice-minister for international trade negotiations in 1993 and 1994, Blanco was Mexico’s chief trade negotiator, leading his country into the successful completion of the Gatt’s Uruguay Round in 1994. He then went on to become minister for trade and industry, serving until 2000. Notably, Blanco lead the Mexican government’s lobbying to approve the Nafta trade deal with Canada and the United States — no small political accomplishment, and a valuable education in what universities call “political economy.”

In the last decade, Blanco’s been active in the private sector: member of the boards of CYDSA, the Mexican chemical manufacturer, and of the country’s leading bank, BANORTE; and also of the pro-trade Cordell Hull Institute. In 2002 Blanco founded and became chairman of the board of Soluciones Estrategicas, which provides high-tech security — associated with cloud computing, database protections, and so forth — with IT security providers like Websense and Palo Alto. And in 2005 he founded IQOM Inteligencia Comercial, which provides online daily analysis of government trade measures that affect corporations involved in Latin America.

To be sure, the other heavyweight country in the region also has a candidate who can throw diplomatic punches.

Roberto Azevedo has been Brazil’s ambassador to the WTO since 2008. A member of Brazil’s foreign service since 1984, Azevedo hasn’t yet reached ministerial rank. But the well-liked Brazilian diplomat certainly has been given important tasks. He has been Brazil’s chief negotiator for the Doha Round, so he has seen first-hand how the politics have played out behind closed doors. And as vice-minister for economic and technological affairs, Azevedo has supervised MERCOSUR’s trade negotiations with countries beyond Latin America.

Azevedo, although educated as an electrical engineer (and in international relations at the Institute Rio Branco, which is Brazil’s foreign ministry’s diplomatic academy), can also point to some impressive legal accomplishments in the (very important) WTO dispute resolution process.

He has successfully litigated WTO cases that targeted European and American airplane subsidies, and also U.S. cotton subsidies that were determined to be inconsistent with WTO rules.  These are significant accomplishments — and for the political skills displayed, not just the solid legal cases that Azevedo and his advisors put together.

In recent days, Azevedo has become deeply involved in WTO discussions of how to resolve the very politically touchy issues associated with currency appreciations and depreciations that can affect (or distort) global trade flows. The touchy part, of course, comes with the many complaints about how China is managing its Renminbi — a subject of hot dispute between Brazil, China, the United States and other countries. Azevedo is credited by WTO insiders for displaying deft diplomatic skills in the talks, as well as an impressive grasp of a complex diplomatic and economic set of issues.

Apart from the famous Brazilian-Mexican rivalry for leadership in anything, Azevedo conceivably could have a second problem that could come up when the WTO General Council starts weighing the nine candidates. In the press release that Brazil’s foreign ministry issued to announce its support for Azevedo’s aspirations to lead the WTO, there was this interesting statement: “The Brazilian candidacy reflects the importance the country attaches to the strengthening of the WTO.”

The reason the foreign ministry’s statement has raised some eyebrows is that it has never been obvious to everyone just how serious Brazil has ever been about strengthening the WTO. Certainly in the Doha negotiations, Brazilian intransigence has always been cited as one of the important reasons the talks have floundered. Azevedo has had a seat at the table, but he’s never been authorized to deliver. Will the members of the WTO’s General Council — few of whom themselves come from countries that are free of blame for the Doha impasse — punish Azevedo for his country’s difficult negotiating positions?

Similar questions directed at what they might be able to deliver as head of the WTO are also likely to be asked of the two African candidates. Remember how some African delegates cheered on the floor of the convention center in Cancun, when the 2003 WTO ministerial meetings collapsed? Insiders in elite international trade circles certainly do — although, again, few of them bring really “clean hands” to the table.

[This writer, like more than a few outsiders who try to figure out such things, isn’t sure whether it’s mainly the rich countries’ undeniable selfishness that have plagued the Doha process, or the bitter Third World resentments, where no “concession” they are handed ever seems to be enough. Even better-informed insiders love to argue this. Regardless, when Kenya’s Amina Mohamed and Alan Kyerematen of Ghana make their presentations before the General Council on Jan. 29, such questions will be hanging in the air, even if they might not be voiced out loud.]

Regardless of how each candidate may, or may not, be able to bridge the rich-country, poor-country divide that has torn the fabric of the Doha talks, both African contenders bring some strong personal qualities to the table.

Amina Mohamed — everyone seems to call her by her first name — is one of the bright lights of Kenya’s diplomatic service. Amina’s very popular in Geneva (especially in the General Council, which will pick Lamy’s successor).

She earned her legal diplomas from the University of Kiev and the Kenya School of Law — and then earned a post-graduate diploma in International Relations from Oxford. She speaks fluent, English, Russian, Swahili, and her resume notes a “working knowledge” of French.

Amina started her career as a legal advisor in Kenya’s Ministry of Foreign Affairs in 1986, with her legal portfolio steadily expanding through the 1990s. In 2000, Amina became Kenya’s ambassador to the United Nations and other International Organizations in Geneva, notably including the WTO.

She knows the WTO very well, having chaired the WTO’s Dispute Settlement Body in 2004, and then as chairman of the General Council in 2005. It was then that I first became aware of Amina’s diplomatic skills. At the time, the General Council (and some African missions in Geneva) were embroiled in the emotional post-Cancun impasse that had already put the Doha Round, as Pascal Lamy put it, in “intensive care.” While the impasse wasn’t, of course, resolved, Ambassador Amina Mohamed won widespread plaudits for her patient diplomacy. She definitely has what’s sometimes called “people skills.”

Amina has served since July, 2011 as United Nations Assistant Secretary General and Deputy Executive Director of the United Nations Environment Programme — called by its acronym, UNEP — in Nairobi.

The other African candidate, Ghana’s Alan Kyerematen, is one of the leading political figures of his country (although his presidential candidacy was unsuccessful). Kyerematen is also known for his diplomatic abilities. This is a very attractive guy, and a man with considerable political skills who knows his economics.

Kyerematen is a former ambassador to the United States (2001 – 2003). He was his country’s Minister of Trade and Industry from 2003 to 2007. His resume notes that Kyerematen was “one of the lead negotiators for Africa the WTO Ministerial Conference in Cancun in 2003.” (To the best of my knowledge, Kyerematen wasn’t one who helped wreck the negotiations.)

Critics who might be inclined to suspect Kyerematen because of the crowd he represented in Cancun in 2003 might we well-advised to consider his performance two years later when WTO ministers next met in Hong Kong. Those meetings are still remembered for the positive negotiating atmosphere they fostered. And Kyerematen was again one of the key insiders who met in the most important closed-door meetings. So having seen it all from an important insider’s perspective, Kyerematen should know what it would take to bring the Doha Round back to life.

To the extent he can articulate a vision of how to resolve the impasse, Kyerematen could become a strong player in the WTO elections process. He’s got the backing — and the ear of — the African Union and of the ACP Group of African, Caribbean and Pacific nations.

Another impressive part of Kyerematen’s resume comes to mind when reading the WTO’s trade policy review of Ghana, which was released in 2008. The WTO reviewers gave the West African country good marks, noting that “trade liberalization has helped to achieve higher economic growth” by cutting tariffs and enacting various structural reforms. Growth had been an impressive 6.2% in 2006, the report noted. That economic good news came on Trade Minister Kyerematen’s watch.

Another Kyerematen-pushed initiative: UNCTAD’s World Investment Forum, which now annually publishes a World Investment Report. That report provides documentation on which countries have taken steps to attract much-needed foreign investment, and which have not. Ghana has been one of the star African performers.

The ninth candidate to succeed Pascal Lamy isn’t as well known in WTO circles as the others. But just a quick review of his resume shows why Jordan’s Ahmad Hindawi has earned a respectful hearing. He’s got a PhD in Manufacturing Engineering/Management from the UK’s Birmingham University. He also earned a masters in science degree (industrial engineering) from the University of Jordan, and a BS in Aeronautical Engineering from Purdue University.

Hindawi has moved for the last quarter century in the most economically progressive business circles in the Middle East. Hindawi was Jordan’s Minister of Industry and Trade from 2004 – 2005, where he played a leading role in Jordan’s preferential trade agreement with the United States, Jordan’s WTO accession, and also in promoting closer economic ties with the European Union.

Hindawi established a regional management consultancy firm, Hindawi Excellence Group in 2006, which operates from Dubai. In his spare time, he likes to play basketball. (Pascal Lamy’s well-known passion as a marathon runner is sometimes linked in the public mind with the patience he has displayed in steering the WTO. Perhaps Hindawi’s supporters will remind the General Council that basketball, when played at its highest levels, is a team sport.)

We’ll all learn more about him — and the other aspiring WTO leaders — on Jan. 29, when the contest between the nine candidates really gets going. Stay tuned.