The CGD Podcast — Interview with WTO Candidate Herminio Blanco
Center for Global Development | Host: Lawrence MacDonald | April 1, 2013

Episode Overview

This episode features Herminio Blanco, former Mexican Minister of Trade and Industry and candidate for Director General of the World Trade Organization (WTO). The conversation explores Blanco’s vision for the WTO, drawing from his negotiation experiences (notably with NAFTA), his perspective from the private sector, and pressing global trade challenges like the Doha Development Round, evolving regional agreements, and the future role of the WTO in addressing issues such as climate policy. The discussion is candid, at times philosophical, but always practical about the state and direction of global trade governance.

Key Discussion Points & Insights

1. Blanco’s Motivation and Vision for the WTO

[01:10]

• Blanco believes the WTO remains highly relevant, regulating trade among 159 countries and providing effective dispute resolution, especially salient during recent economic crises.
• He notes three central emerging challenges:
  • Stalled Doha Round negotiations (“a negotiation that has lasted 12 years”).
  • The aging of core WTO rules (“the rules…were drafted 20 years ago… the way of doing business has changed dramatically”).
  • Proliferation of advanced regional agreements (e.g., TPP, TTIP) that could surpass the WTO in terms of rule-setting, risking institutional relevance.
• Notable Quote:

  “The tsunami of protectionist measures that some analysts were forecasting did not happen. I think that a lot of that is because of the WTO…has a very effective dispute settlement procedure.”
  – Herminio Blanco [01:14]

2. Negotiation Experience and Private Sector Perspective

[03:11], [04:53]

• Reflects on leading NAFTA negotiations: their complexity, political stakes, and being the first US deal with a developing country.
• Extended negotiation experience with the EU and smaller countries.
• Emphasizes his more recent decade of business experience (serving on boards in the US, Europe, Japan, and Mexico), yielding a “different perspective” on what businesses need in trade rules.
• Notable Quote:

  “In business, I have to take care of the interest of the stockholders… What we learn…is that we need to be able to invest and have certainty, transparency in the rules for investment and in the rules for trade.”
  – Herminio Blanco [05:12]

3. The Doha Development Round — A “Zombie” in the Room

[07:43]

• Host frames the Doha Round as "the walking dead.” Blanco disagrees, stressing its importance for progress in the WTO and the need for substantive resolution.
• Points to a window of opportunity as the US and EU gear up for the TTIP, suggesting this could force flexibility in Geneva.
• Argues that 12 years of negotiation with no progress signals a need for more flexible approaches, particularly from larger countries.
• Notable Quote:

  “It’s time to be more flexible, it's time to start moving. … If the level of ambition in some issues may be decreased, that could lead to further movement of countries.”
  – Herminio Blanco [08:48]

4. Short-term Goals: Bali Ministerial and Trade Facilitation

[09:56-10:17]

• Bali WTO Ministerial in December identified as a critical, pragmatic short-term horizon.
• Prioritizes success on the “trade facilitation package,” aimed at reducing border inefficiencies and barriers, which could yield significant global economic benefits.
• Also references possible incremental gains in agriculture for lower-income countries.
• Emphasizes the importance of private sector pressure to drive flexibility and progress.
• Notable Quote:

  “There’s a trade facilitation package…which will decrease or eliminate obstacles for import and export in many countries…something that could mean hundreds of billions of dollars of benefits for the world.”
  – Herminio Blanco [10:17]

5. Beyond Bali — The Doha Agenda and Small Economies

[13:11]

• Next phases must deliver a “substantive solution” to the Doha agenda, with an emphasis on benefits for developing and least developed countries.
• Stresses his planned leadership style: energetic interaction with Geneva ambassadors, governments, business, and civil society to engineer needed flexibility.
• Notable Quote:

  “We can bring the energy to have the needed flexibilities to get a substantive part of the Doha agenda ready and working for the world.”
  – Herminio Blanco [14:16]

6. Diagnosing Negotiation Deadlock: Too Many Voices or Big Power Gridlock?

[14:37], [15:44]

• Host summarizes colleagues’ views: either “too much democracy” (one country, one vote) or discord between “big nations.”
• Blanco acknowledges both analyses but zeroes in on the frustration of small and least developed countries, who have seen no tangible benefits after 12 years.
• Suggests emerging economies and the developed world (especially US and EU) bear responsibility for not reaching consensus.
• Advocates for greater flexibility, especially from the larger players.
• Notable Quote:

  “Those countries that are larger have to be more flexible than the countries with smaller sizes.”
  – Herminio Blanco [17:09]

7. WTO and Climate Policy: Border Tax Adjustments

[17:32-18:55]

• Host probes the WTO’s potential future role in adjudicating carbon border taxes—policies where countries price carbon and tax imports based on carbon intensity.
• Blanco supports protecting “high values of humanity” (e.g., the environment) but counsels against undermining WTO trade commitments.
• Argues that progressing Doha would create space to discuss issues such as carbon adjustments, stressing the importance of upholding the multilateral trading system’s rules.
• Notable Quote:

  “It’s fundamental to do things in a way that is not a violation of the multilateral rules… and at this point in time, rule the World Trade Organization.”
  – Herminio Blanco [19:42]

8. Final Reflections on the WTO Selection Process and Blanco’s Candidacy

[20:13]

• Praises the transparency and integrity of the Director General selection process.
• Asserts his credentials and experience make him the right candidate to lead the WTO into its next era.
• Notable Quote:

  “I do believe that my credentials, my experience, my personality, my political experience is such that I could help lead WTO to the next stage and to help WTO remain being a highly relevant organization.”
  – Herminio Blanco [20:53]

Notable Quotes & Memorable Moments

• On WTO’s enduring relevance:
  “It is because I believe that the WTO is very, very relevant for the world, regulates trade amongst 159 countries…”
  [01:10]

• On learning from business for WTO reform:
  “It’s fundamental that the rules in the WTO are modern, that it keeps on being the benchmark agreement for trade in the world.”
  [05:35]

• On the Doha “zombie” characterization:
  “My view is that it's very important to get a substantive resolution to the Doha agenda. I think that there will be no other negotiations that will progress… unless we bring a solution.”
  [07:43]

• On trade facilitation as a realistic win:
  “It is something substantially less ambitious, but still something that could mean hundreds of billions of dollars of benefits for the world.”
  [10:17]

• On role of small countries and need for flexibility:
  “A sense of frustration because they were expecting to receive the benefits of this negotiation and after 12 years they have not received the benefits.”
  [16:09]

• On environmental values versus WTO rules:
  “What is very important is to protect the high values of humanity, one of them the environment, but not to do it putting obstacles that may go against the commitments of different countries in the WTO.”
  [18:55]

Timestamps for Key Segments

• [01:10] — Why Blanco wants to lead the WTO; challenges facing the institution
• [03:24] — Application of NAFTA negotiation experience; private sector lessons
• [07:43] — Addressing the Doha Round as a “zombie”
• [09:56] — Bali Ministerial meeting and the trade facilitation package
• [13:11] — The path after Bali; renewed emphasis on the Doha agenda
• [14:37] — The core problems in WTO consensus-building: too many voices or big players?
• [17:32] — Prospects for WTO involvement in climate policy and border carbon taxes
• [20:13] — Blanco’s final remarks on the selection process and his candidacy

Summary

Herminio Blanco makes a robust case for his candidacy as WTO Director General, blending a seasoned negotiator’s insight with a pragmatic business perspective. He characterizes the WTO as a vital institution under stress—confronting stalled rounds, outdated rules, and the rise of advanced regional deals. Blanco underscores incremental short-term goals (notably the Bali trade facilitation deal) while maintaining a strong commitment to resolving the Doha impasse for the benefit of developing countries. He calls for new flexibility, especially from the largest economies, and envisions a WTO that proactively addresses emerging issues like carbon border adjustments, ensuring any solutions align with fundamental multilateral trade principles.

The tone is both diplomatic and candid, weaving optimism with realism about the challenges ahead for global trade governance. For listeners new to the issues, this episode provides a concise survey of the WTO’s crossroads and Blanco’s detailed, pragmatic approach to leadership.