Finance & economics | World trade

Fresh blood

The fate of the WTO’s Doha round is in the hands of two new trade officials

TRADE talks are threatening to become sexy again. Frustrated by the moribund Doha round of trade liberalisation, which has been stuck in a cul-de-sac since 2008, the world’s rich economies have gone their own way. America and the European Union will soon get busy on an alluring Trans-Atlantic Trade and Investment Partnership (TTIP): axeing non-tariff barriers between the two could boost output by perhaps 3%. The Trans-Pacific Partnership (TPP), free-trade negotiations involving a dozen countries, looks increasingly enticing with the arrival of new participants, notably Japan. Yet rekindled interest in trade talks does not amount to full-throated support for renewed liberalisation. Whether it leads to real progress may hinge on two changes among the world’s leading trade officials.

On May 2nd the White House announced the nomination of Michael Froman, now deputy national security adviser for international economic affairs, to the position of United States trade representative. Barack Obama, who set trade as a second-term priority in his state-of-the-union speech in February, looks to be showing his commitment to the task with the selection. Mr Froman, a close adviser, will be assumed to have the president’s ear. Just as important, he is a seasoned negotiator.

Mr Froman helped salvage a free-trade deal with South Korea that was one of the few trade achievements in Mr Obama’s first term. As the president’s “sherpa”, or chief envoy, to meetings of the G20 and G8 countries, he built relationships with European and Asian leaders that could prove vital in guiding regional trade deals through treacherous ground. The president may follow this nomination in the coming months by seeking “trade-promotion authority” from Congress, which would guarantee trade deals an amendment-free, up-or-down vote. Encouragingly, Mr Froman’s nomination has been hailed by members of both parties, as well as by business groups.

If confirmed, Mr Froman will find himself sharing negotiating tables with Roberto Azevêdo. On May 8th officials at the World Trade Organisation recommended Mr Azevêdo, now the Brazilian ambassador there, to be the WTO’s new leader. Its general council is likely to approve his appointment on May 14th. Mr Azevêdo edged out Herminio Blanco, of Mexico, thought to have enjoyed greater support in America and Europe.

The choice of a Brazilian to lead the WTO is an interesting one. Brazil has more often been an obstacle to liberalisation than a facilitator. In his campaign Mr Azevêdo sought to draw a distinction between the views of the candidates and their home countries. Yet it seems probable that support by emerging markets for Mr Azevêdo’s candidacy was motivated in part by a sense of shared interests.

That could spell trouble for the global negotiations. Emerging markets fall well short of a coherent trade bloc, but they may find common cause. As for the rich world, its interest in TTIP and TPP is motivated in part by a desire to bypass China, which lacks a seat at both tables; developed economies are anxious to set international trade rules without much Chinese influence while they still can. And America may also move more forcefully to ensure that it gets much of what it wants out of global trade bargaining—including concessions from Europe on farm trade as well as guidelines on trade in services and information technology—whether or not the Doha round is resuscitated.

Some hope that regional trade deals might reinvigorate the Doha round. The smooth-talking Mr Azevêdo has promised to save it. He might achieve some progress at the next big WTO meeting in Bali in December. But his selection could also contribute to a rift that will further weaken the multilateral trade process.

This article appeared in the Finance & economics section of the print edition under the headline "Fresh blood"

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