CSIS Ernie Bower: Asia blinks in WTO leadership race

By Ernest Z. Bower

Smoke signals from this week’s Geneva cloister to determine the new leader of the World Trade Organization  revealed results much less surprising than the choice of Pope Francis.  The two Latin Americans, Roberto Azevedo of Brazil and Herminio Blanco of Mexico, are the finalists.

What is interesting is what this says about Asia’s support for global trade.  Three highly qualified and capable Asian candidates have been cast aside in favor of the Latin Americans: Mari Pangestu of Indonesia, Bark Tae-ho of Korea and Tim Groser from New Zealand. One could reasonably argue it is Latin America’s turn to lead the WTO.  An Irishman, an Italian, a shared term between a New Zealander and a Thai and then a Frenchman lead the global trade body.  No leader from South or Central America has had the honor.

But the truth is that Asia didn’t back its horses in this race like they have done in the past for the WTO job and other key posts such as the United Nations.  In 1999, heads of state from around the Asia Pacific actively caucused for Thailand’s. Supachai Panitchpakdi or former prime minister of New Zealand Mike Moore.

This year, Indonesia’s trade minister Gita Wirjawan, the man who succeeded Mari Pangestu in that role, was publicly indicating that his country was not going to do more on trade this year within 48 hours of the announcement of Ibu Mari’s candidacy. Not a move designed to warm the cockles of the global trade glitterati. Relative to the political calories their countries and allies expended on Dr. Supachai and Mr. Moore in their bloody fight, Indonesia didn’t support Ms. Mari wholeheartedly, nor did the rest of Asia get behind her, Mr. Bark or Mr. Groser.

That is odd given the facts that Indonesian foreign policy is seeking a broader regional and global role for the world’s fourth-largest country and the Indo-Pacific is home to over two thirds of all world trade.  The explanation seems to be politics and perhaps a sense that Asia is the center of the universe for trade so it may not need the WTO in the near term.

Indonesia has largely been seen as backtracking on trade as 2014 elections approach, pandering to nationalist memes and deep-pocketed executives seeking protection and more equity in Indonesian businesses, and that undercut Ms. Mari’s candidacy. She was highly capable, both technically and in terms of international diplomacy skills, but Indonesia seems to be ambiguous about international trade agreements.  There is a palpable sense in Jakarta that Indonesia’s time has arrived and that money, technology and trade flows will come because it accounts for nearly half of the Association of Southeast Asian Nation’s over $2 trillion economy and is growing at over 6 percent annually.

Asia may feel justified in going slow on the WTO, too.  The most interesting trends in trade and investment are arguably in the Asia Pacific, and the competition for models to drive Asian economic integration – the Transpacific Partnership (TPP) up against the Sino-centric ASEAN + 3 or the big tent Regional Comprehensive Economic Partnership (RCEP) – make the WTO look sleepy and less relevant. Europe’s economic numbers don’t inspire attention despite the EU’s unmistakable role as a major Asian market, and while the fragile U.S. recovery is notable, it is not awe-inspiring either.

One can detect, in Asia’s lackluster lobbying for its WTO candidates, a strong sense of its own importance and perhaps a potentially dangerous lapse in historical recall of cyclical growth and trade flows.  As my agriculturally oriented ancestors sewed into my formative brain, you’ve gotta make hay when the sun is shining.

Ernie Bower is the senior adviser and chair for the Southeast Asia Studies Center for Strategic & International Studies in Washington, D.C.