WTO must adapt to new pacts to thaw talks - Mexico hopeful

By Simon Gardner

MEXICO CITY (Reuters) - The World Trade Organisation can break a deadlock in global trade talks if it adapts to a flurry of bilateral trade initiatives and overhauls itself, Mexico's finalist to head the body said on Friday.

Herminio Blanco, a former Mexican trade minister who played a key role in negotiations to create the North American Free Trade Agreement (NAFTA), is facing off against Brazil's Roberto Azevedo to become the first Latin American WTO director-general.

While the field has narrowed and the campaign has advanced, Japan has won approval to join Trans-Pacific trade talks and the United States and 27-member European Union are gearing up to launch trade negotiations.

"What is fundamental is that we learn from what is happening on these different fronts," Blanco told Reuters on Friday in a telephone interview from Haiti. "We must see which parts of these initiatives we should formally incorporate into the WTO."

"That is the way to convince the ... members of the organisation what changes need to take place," he added, saying the WTO also had room to improve how it resolves trade disputes.

A deal between the United States and EU would be the most ambitious since the WTO was founded in 1995 and highlights impatience at failure to agree to global tariff cuts.

Blanco sees reviving the stalled Doha round of trade talks as vital and says doing so could give global growth a boost as developed countries focus on trade reform, at a time when fiscal and monetary policy are effectively at a standstill.

"Trade generates growth and prosperity," he said. "The Doha round offers concrete benefits, particularly in agriculture, for developing countries and for countries of relative development."

Blanco thinks the private sector in the United States needs to pressure their government back to the negotiating table and urge it to be more reasonable.


Countries have tried unsuccessfully for over a decade to conclude the Doha round of world trade talks, which was supposed to open up new markets in agriculture, manufacturing and services, and help the globe's poorest countries. WTO Director-General Pascal Lamy declared an "impasse" in 2011.

"(The WTO) has been left behind because we haven't been able to conclude the talks in 12 years, and because we have not been able to reform WTO trade rules in 20 years," Blanco said. "The organisation is in defensive mode.

"We can't wait another 20 years to incorporate the changes going on in the world of business."

Blanco says the Doha talks ran aground over tariffs for industrial products.

For him, key priorities include the elimination of subsidies for agricultural exports that hurt smaller countries, lowering tariffs on industrial products and introducing new rules on the way trade disputes are solved.

"It must be more of a priority for the WTO to give benefits to countries that need them more," he said.

Blanco says he has an edge because he brings an outside perspective and is not a WTO insider like Azevedo, an experienced negotiator who represented Brazil at the body.

He points to credentials as an experienced trade negotiator, as well as his work in both government and the private sector.

The winner will emerge by the end of May and will face a huge challenge to restore confidence in the WTO's ability to negotiate a global trade deal.

Some trade diplomats see Azevedo as too junior for the job, lacking ministerial rank. Others look dimly on Blanco's closeness to free-trade deals outside the WTO.

As a consultant, he gave Mexico's government advice as it negotiated participation in the Trans Pacific Partnership last year, even though the initiative circumvents the WTO.

But Blanco sees no conflict of interest.

(With reporting by Tom Miles in Geneva; Editing by Cynthia Osterman)