The next director of the WTO

["Ian Murray" <seamus2001@xxxxxxxxx>]

Interview
Enlightened move

Supachai Panitchpakdi, director-general of the World Trade Organisation

Charlotte Denny
Saturday May 25, 2002
The Guardian

Supachai Panitchpakdi is worried about his collection of bonsai trees.
The incoming director-general of the World Trade Organisation doesn't
think they will withstand the harsh Swiss winters so he has decided to
leave them behind in his native Thailand when he starts his new job in
September.

Some observers worry whether the ex-Buddhist monk can withstand the
corrosive atmosphere at the WTO's Geneva headquarters. Top of the
anti-globalisation movement's hate list, the WTO was a difficult
organisation to run even before the protesters started besieging its
summits.

Managing it is going to require more than Zen-like calm. Protectionism
is on the rise in the US, usually the cheerleader for free markets.
Brussels and Washington are squaring up for what threatens to be the
most ferocious trade war for a generation and the euphoria which lifted
the organisation after the successful launch of a new round of global
trade talks last November in Doha has almost evaporated.

Mr Supachai - he has a PhD in economics from Erasmus University in
Rotterdam - is in an upbeat mood despite the challenges. "I'm not a
pessimist," he says. "We have been making progress."

His own arrival is one sign of change at the WTO. Although the vast
majority of its 145 members are developing countries, the former Thai
deputy prime minister will be its first leader from the developing
world. It's also the first time one of the big three global financial
institutions - the other two are the International Monetary Fund and the
World Bank - has been run by someone from the third world.

Developing countries were his main support base when he ran for director
general in 1999. With the WTO's most powerful member, the US, backing
the ex- New Zealand prime minister, Mike Moore, deadlock was only
resolved by splitting the job Moore's three years will be followed by
three years of Supachai. His thoughtful, academic approach will be a
change of pace after Moore's abrasive style.

Like all Thai men, Mr Supachai spent a brief period as a Bhuddist monk
and still practices the meditation techniques he learnt in the
monastery. Dapper, he exudes quiet confidence, with a softly spoken
voice and deliberate manner. His idea of relaxation is to write books on
globalisation and play chess. Diplomatic observers hope he will bring
fresh impetus to the Doha negotiations, already showing signs of getting
bogged down.

Nasty


"Everybody's being really nasty to each other," says one Geneva
observer. "A lot depends on Supachai injecting a new mood into things."

The Doha round is supposed to be wrapped up in January 2005, but that is
looking like an increasingly heroic deadline. The transatlantic row over
steel is distracting attention and America's trading partners have
accused it of resorting to blatant protectionism in its agricultural
sector after President Bush signed a bill that will increase farm
subsidies by nearly $80bn over the next ten years.

Fights over farm subsidies are once again likely to be the main
stumbling block to a deal. Despite the pious denunciations from Brussels
over the farm bill, some member states are reluctant to cut Europe's own
far more extensive subsidies. As one of Thailand's main negotiators at
the close of the Uruguay round, Supachai remembers how close the
organisation came to collapse. This time, he thinks success will be
impossible unless developing countries get a better deal.

Mr Supachai has no time for the violent protesters who have disrupted
the WTO and other global organisations but he has sympathy for the WTO's
critics who accuse it of being a rich country fiefdom. "If you look at
the number of developing countries which have benefited from past
rounds, they've been very limited - mostly a few South-east Asian
countries," he says.

The WTO's consensus decision-making structure means that in theory even
the smallest country can hold up a trade deal if it doesn't like what is
on the table and in Doha, they flexed their negotiating muscles for the
first time, delivering a bloody nose to the US over drug patents.

Rich countries responded to the developing country concerns by promising
that the new talks would be a "development" round focused on the needs
of the poorest countries. But with the US and the EU dragging their feet
on farm liberalisation, scepticism is growing about their sincerity.

Supachai says there are three tests of whether the new round delivers
for poor countries; progress on reducing farm subsidies, freeing up
textile markets, and preventing rich countries from abusing WTO rules to
keep goods from developing countries out of their markets. Developing
countries are wrong to oppose some of the West's trade agenda, he says.

India nearly derailed the Doha negotiations by opposing the EU's calls
for investment and competition, but Mr Supachai says Brussel's drive to
open up trade in services could benefit developing countries. "Patients
from rich countries could chose to be treated in the developing world.
We know that there are high standards of healthcare in some developing
countries." He plans to be more activist than some of his predecessors.
While Moore has stood by and let Bob Zoellick, America's top trade
official, and Pascal Lamy, the EU's trade commissioner, thrash out their
differences, Supachai wants observer status on the main transatlantic
committee.

He has already punted his own solution to the steel dispute - a global
fund for disarming overcapacity in the industry, with the money to come
from the tariffs the EU and the US have slapped on foreign steel
imports. The EU's plan to short-circuit the lengthy WTO's judicial
process in the steel case and impose its own tit-for-tat sanctions on
Washington is not a "helpful" move, according to Supachai. "It might
undermine the consensus making process we need for the Doha agenda," he
says. "It could lead to further mutual retaliation which could be
never-ending."

But his more proactive stance could raise hackles in Washington.
Although the US was one of the strongest supporters of launching a new
round in Doha, observers worry that Washington's support for the WTO is
waning. Congress resents being forced to amend US laws because of WTO
judgments - Geneva has twice ruled that US tax concessions for
multinational companies violate global trade rules.

Heroic


Supachai acknowledges this is a problem. "I would think that amending US
tax rules is a heroic task," he says diplomatically. And there is a real
danger is that if Mr Supachai succeeds in wresting the WTO's focus round
to a developing country agenda, Washington may simply lose interest.
President Bush has invested a lot in expanding the North American Free
Trade Agreement, which covers Canada, the US and Mexico, to the rest of
Latin America. Faced with expending political capital on the WTO or on
his proposed free trade area of the Americas, his natural inclination
may be to pursue the latter.

The one bit of good news is that Mr Bush has succeeded in winning fast
track authority from Senate for negotiating future trade treaties so the
odds have improved slightly on a timely close to the Doha negotiations.
Pessimists however point out that every previous trade round has overrun
its deadline. Bonsai trees can take up to 30 years to train. Mr Supachai
must be hoping that a Doha deal doesn't take as long.

The CV

Born Bangkok in 1946

Education
St Gabriel's College and Triam Udom School; masters in econometrics and
development planning and PhD in economic development, both at the
Netherlands School of Economics on scholarship from the Bank of
Thailand; visiting fellow at Cambridge University in 1973 Career Bank of
Thailand, 1974-1986, beginning in the research department and moving to
other divisions including financial institutions supervision; ran for
parliament in 1986, and became deputy finance minister; joined Thai
military bank in 1988 as director and adviser, then president; 1992,
appointed a senator and became deputy prime minister; signed the Uruguay
agreement for Thailand as chairman of its international economic policy
committee

Interests
Bonsai, chess, writing books