Economy

Why The New Brazilian WTO Head May Be Bad News For Free Trade

Roberto Azevedo comes from an emerging BRICS economy, where there has been more focus on bilateral commerce deals than wider trade agreements favored by the US and Europe.

In the Brazilian port of Itajaí
In the Brazilian port of Itajaí
America Economia

BRASILIA - The election of Brazilian Roberto Azevedo as head of the World Trade Organization (WTO) is another Latin American triumph on the international stage. It also, however, puts Latin America at the helm of a paralyzed organization, opening up the possibility that Azevedo's rise could turn out to be the last nail in the coffin for the WTO.

Responsible for promoting and facilitating trade among countries across the globe, the WTO emerged in 1995, after successfully completing the GATT (General Agreement on Tariffs and Trade), at a time when countries were lowering their customs tariffs and other obstacles to imports. But the 2001 Doha Development Round and its plans of liberating commerce multilaterally limped to life, eventually stalling by 2008 after the global financial crisis.

The WTO hasn’t really done much since, but that doesn’t mean the world of trade hasn’t changed in the meantime. As a matter of fact, there are two big pieces of news in global trade negotiations, although they are not quite worldwide -- and have nothing to do with the WTO.

The first big change: the Trans-Atlantic Trade and Investment Partnership (TTIP) was created to unite the U.S. and Europe. Still in negotiation stages, this agreement seeks to erase the non-tariff barriers between the two blocs, creating an additional demand that would boost global production in the area by 3%. In Latin America, the natural fit for this would be the countries in Mercosur.

The second initiative is in the Pacific and already includes Chile, Peru, and Mexico as full rights members and is much more ambitious in its reach than the TTIP. The Trans-Pacific Partnership (TPP) aims to unite the countries in the Pacific basin: The U.S., Canada, New Zealand, Australia, Malaysia, Singapore, Brunei, and the aforementioned Latin American countries. Japan has announced its entry in the group and Colombia, Thailand, and the Philippines have also shown interest. The last round of negotiations are currently being held in Lima, scheduled to conclude on May 24.

The BRICS factor

The truth is that countries around the globe are investing more in efforts to boost transatlantic or transpacific free trade, rather than in the framework of worldwide free trade. All of this means that Roberto Azevedo may face the prospect that the WTO slips back to playing the same role it had 10 years ago.

Or maybe, the Brazilian's timing is better than it appears. The very existence of these blocs is proof that trade negotiations have returned to prominence. Azevedo’s recent election arrives at almost the same time Michael Froman was named the United States' new Trade Representative. An expert negotiator, and close to President Barack Obama, Froman will put trade negotiations on the front burner of American economic policy.

Azevedo could do the same thing on a multilateral level, if he wants to resuscitate the Doha Round as he has promised. But he will have to let go of the vision he has defended until today. Azevedo has been the Brazilian representative at the WTO for years, and that gave him an ample range of knowledge of the bureaucracy and administration, which plays in his favor. His diplomatic skills also help.

But the Brazilian position that Azevedo has advocated at the WTO has been more of an obstacle to free trade than a facilitator.

The other Latin American candidate was Mexico's Herminio Blanco -- who was supported by the U.S. and European countries -- and was more of a pure free trade advocate. The architect of NAFTA (North American Free Trade Agreement), he was also America Economia’s favorite. A key man in the commercial “opening” of his country, Blanco participated in 34 free trade agreements that Mexico signed with countries or blocs, turning it into the most commercially open country in the world. As a result Mexico now has almost $1 million worth of exports per day.

Azevedo was chosen with the support of emerging countries, many of which do not have their hearts set on commercial openness. The largest ones being Brazil, Russia, India and China, the so-called BRICS. These countries are visibly missing from the transatlantic and transpacific blocs. As a matter of fact, the two blocs will probably seek to establish rules in the game for free trade without having to negotiate with BRICS, whom haven’t expressed interest in free trade.

There’s no doubt about it: Azevedo’s job is titanic. For the WTO to become relevant again, it must establish a framework that, with support from the US, China and other BRICS, will truly open world trade to emerging nations.

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Spencer Tunick Nude Installation in Israel

Anne-Sophie Goninet, Jane Herbelin and Bertrand Hauger

👋 Salam!*

Welcome to Monday, where the UK pays homage to slain MP David Amess, Myanmar frees thousands of prisoners, and Facebook gets ready to build its "metaverse." Please fasten your seatbelts: Worldcrunch also takes stock of the long-lasting effects — good and bad — the pandemic has had on the air travel industry.

[*Azeri - Azerbaijan]

🌎  7 THINGS TO KNOW RIGHT NOW

Myanmar to free political prisoners: Myanmar's junta chief Min Aung Hlaing has announced the release of 5,636 prisoners who had been jailed for protesting the coup that ousted the civilian government in February 2021.

• Powerful Haiti gang behind the kidnapping of U.S. missionaries: The notorious 400 Mawozo gang is believed to be behind the kidnapping in Haiti of a group of Christian missionaries, including 16 U.S. citizens and one Canadian. The brazen kidnapping on Saturday comes as crime is spiking since the killing of President Jovenel Moise in July.

• UK to pay tribute to David Amess: British lawmakers will pay homage in parliament to colleague David Amess, who was stabbed to death Friday in what was described by the police as a "terrorist incident." Officers arrested a 25-year-old suspect whose father, Harbi Ali Kullane, worked as a media adviser to a former prime minister of Somalia.

• COVID update: Russia has registered more than 34,000 cases of new infections in the past 24 hours, a new record since the start of the pandemic. Meanwhile, police in the northeast Italian city of Trieste used water cannons to clear striking dockworkers protesting Italy's new requirements that all employees be vaccinated.

• At least 26 killed in floods in India: Torrential rain has triggered floods and landslides in India's southern coastal state of Kerala, killing at least 26 people.

• Facebook to hire 10,000 in EU to develop "metaverse": The U.S. social media giant plans to hire 10,000 workers in the European Union over the next five years to build a "metaverse," a virtual reality version of the internet that the company touts as the future.

Punishing parents for children's bad behavior: After limiting gaming hours for minors, China is now considering legislation to reprimand parents if their children exhibit "very bad behavior" or commit crimes.

🗞️  FRONT PAGE

Colombian daily El Espectador dedicates its front page to Alex Saab, "owner of the secrets" of Venezuelan President Nicolas Maduro. The Colombian businessman, wanted by U.S. authorities for allegedly laundering money on behalf of Venezuela's government, has been extradited from Cape Verde to the U.S. where he is scheduled to appear in court today.

#️⃣  BY THE NUMBERS

4.9%

China's economy registered its slowest pace in a year as the country faces a looming energy crisis with power shortages and increasing pressure on its property sector. Gross Domestic Product (GDP) for the period between July-September rose 4.9%, the weakest numbers since the third quarter of 2020 and significantly lower than forecasts. The world's second-largest economy faces a debt crisis linked to the China Evergrande Group debt crisis, while energy shortfalls have dropped factory output to its weakest since early 2020, when heavy COVID-19 curbs were in place.

📰  STORY OF THE DAY

7 ways the pandemic may change the airline industry for good

Will flying be greener? More comfortable? Less frequent? As the world eyes a post-COVID reality, we look at ways the airline industry has been changing through a pandemic that has devastated air travel.

⛽ Cleaner aviation fuel: With air travel responsible for roughly 12% of all CO2 emissions from transport, and stricter international regulation on the horizon, the industry is increasingly seeking sustainable alternatives to petroleum-based fuel. In Germany, state broadcaster Deutsche Welle reports that the world's first factory producing CO2-neutral kerosene recently started operations in the town of Wertle, in Lower Saxony. The plant, for which Lufthansa is set to become the pilot customer, will produce CO2-neutral kerosene through a circular production cycle incorporating sustainable and green energy sources and raw materials

.🛃 Smoother check-in: The pandemic has also accelerated the shift towards contactless traveling, with more airports harnessing the power of biometrics — such as facial recognition or fever screening — to reduce touchpoints and human contact. Similar technology can also be used to more efficiently scan physical objects, such as explosive detection. Ultimately, passengers will be able to "check-in" and go through a security screening anywhere at the airports, removing queues and bottlenecks.

✈️ The billion-dollar question: Will we fly less? At the end of the day, even with all these (mostly positive) changes that we've seen take shape over the past 18 months, the industry faces major uncertainty about whether air travel will ever return to the pre-COVID levels. Not only are people wary about being in crowded and closed airplanes, but the worth of long-distance business travel, in particular, is being questioned as many have seen that meetings can function remotely, via Zoom and other online apps.


➡️ Read more on Worldcrunch.com

📣 VERBATIM

"The crimes committed that night are unforgivable for the Republic."

— Emmanuel Macron became the first French president to commemorate the killing of as many as 200 Algerian independence protesters by Parisian police in 1961. For 40 years, French officials ignored the massacre, which took place a year before Algeria gained its independence from France after an eight-year war. In 2012, French President François Hollande acknowledged the killings for the first time on a visit to Algeria, and Macron took it further by attending Sunday's commemoration at the site where the events happened in the French capital. Still, many had hoped the French President would go further and take responsibility for a "state massacre," for a crime many historians consider the most violent repression of a peaceful demonstration in post-War Europe.

📈💥  IN OTHER NEWS

​Low trust, high risk: The global rise of violence targeting politicians

The deadly stabbing of British Parliament Member David Amess confirms an ongoing study on trust and governance in democracies around the world: It's bad. In The Conversation, James Weinberg — the study's author and a lecturer in Political Behavior at the University of Sheffield — writes:

⏪ The assassination of Amess, who was stabbed to death in his constituency on Friday, is a tragic moment for democracy. What makes it even more devastating is that such a catastrophic failure is not without precedent or predictability. Labour MP Jo Cox was shot at her constituency surgery in 2016. Before her, another Labour MP, Stephen Timms, survived a stabbing in 2010. And Andrew Pennington, a Gloucestershire county councilor, died in a frenzied attack in 2001 while trying to protect local Liberal Democrat MP Nigel Jones.

☝️ Beyond these critical junctures in the public debate about politicians' safety, elected representatives must live with an increasingly insidious level of popular cynicism that threatens violence on an almost daily basis.

🇬🇧🇳🇿🇿🇦 Not only are these experiences of abuse or threats of physical violence felt across both sides of the political aisle in the UK — they also appear to be growing more common in other democratic contexts where the climate of politics has been presumed to be both calmer and more volatile, from New Zealand to South Africa.


Read the full piece from The Conversation, now on Worldcrunch.com

✍️ Newsletter by Anne-Sophie Goninet, Jane Herbelin and Bertrand Hauger

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