Interview with WTO Candidate Herminio Blanco

Summary

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

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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.

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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]

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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]

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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

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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.

Transcript

[A]

Welcome to the Global Prosperity wonkcast. I'm Lawrence MacDonald and my guest today is Ermino Blanco. He is the former Minister of Trade and Industry of Mexico and one of several candidates to become the next Director General of the World Trade Organization. Mr. Blanco, welcome to the show.

[B]

Thank you very much. Thank you very much for having me in your program.

[A]

I'm delighted to have you. I was watching a BBC interview that you did recently online and I've been looking at your candidate information and I was interested to see that you have divided your program, should you be selected into a short term horizon, a medium term horizon and then something you call inclusiveness in integrating regional trade agreements. I want to come back to those horizons. I think it's very useful to have it broken out in that way. But maybe first something much simpler. Why do you want to be the next Director General of the World Trade Organization?

[B]

Well, it is because I believe that the WTO is very, very relevant for the world, regulates trade amongst 159 countries, is an institution that has worked very well, especially during this last crisis where 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, specifically because the WTO has a very effective dispute settlement procedure now. This organization is now facing severe challenges. First of all, a negotiation that has lasted 12 years has not come to a conclusion. The rules of the WTO were drafted 20 years ago and as you know, the way of doing business has changed substantially, I would say dramatically during these last 20 years. And very importantly the network of free trade agreements that exist in the world and very importantly the tpp, the Trade Transatlantic Pacific Partnership and the Transatlantic Investment and Trade Partnership to be negotiated between the US and the eu, the European Union present big challenges. There will be state of the art agreements. These are agreements that will have much better rules than the wto. And so there's a challenge. Challenge because of negotiations that have not been solved. Challenge because the rules are getting old and challenged because we have all these trade agreements.

[A]

I believe your experience, your experience in this I imagine is shaped a lot by your role in helping to negotiate nafta, the North American Free Trade Agreement.

[B]

Exactly. I do believe that the experience that I had as chief trade negotiator as the one that led the negotiations of the agreement between Mexico and the US and Canada, I think is very useful. It was a very complex negotiation from the point of view of the politics. Very complex negotiation from the point of view of the technical procedures and I was able to bring this negotiation to an end. This was a historical agreement, the first agreement that the US did with a developing country and the first agreement that Mexico did. I also negotiated our agreement with the eu. I also negotiated with small countries. So I bring a lot of experience on the front of negotiations, but I very importantly bring the experience of more than a decade in the business world. I am member of boards in the US in Europe, in Japan, in Mexico. And I think that gives me a very different perspective on of what needs to be done with the rules of trade so that the investments that business do happen and through that investment, the employment and the prosperity generated in the wto, especially for countries with lower level of development.

[A]

What in particular do you feel you've learned? It's been more than 10 years since you were Mexico's Minister of Trade and Industry and that time you've been in the private sector. What's your big takeaway that would cause you to approach leading the WTO differently than if you hadn't had that experience?

[B]

Very basically, business are led by results, results oriented. In business, I have to take care of the interest of the stockholders, both in terms of shareholders, interested parties. And what we learned from business is that we need to be able to invest and have certainty, transparency in the rules for investment and in the rules for trade. I think that's fundamental. It's fundamental that the rules in the WTO are modern, that it keeps on being the benchmark agreement for trade in the world. And as I said, there are several agreements that have been negotiated since the 1994, many, I would say hundreds, which represent big challenges for the wto.

[A]

We're going to take a quick break. When we come back, I want to ask you about your views on the Doha Development Round. This is the Global Prosperity Wonk Cast. From the center for Global development, I'm Lawrence MacDonald. We'll be back in a bit. Welcome back to the Global Prosperity wonkcast. I'm Lawrence MacDonald and my guest today is Ermanio Blanco. He's the former Minister of Trade and Industry of Mexico and one of several candidates to be the next Director General of the World Trade Organization. Mr. Blanco, before the break, I said I was going to ask you about the Doha Development Round. And I must say that among my colleagues here at the center for Global Development, when we talk about it, people say things like, it's time to drive a stake through its heart. They talk about it as a zombie, as the walking dead, that while it seems to be important to say, let's complete the round. I don't hear anybody actually say they think it's going to happen. What's your view about that?

[B]

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 in the World Trade Organization unless we bring a solution, a substantial solution to the agenda. I do believe that there are several elements that may point to a window of opportunity. One of them is the announced negotiation between the US and the eu. This is a negotiation that will very importantly change the way rules are done in the sense of bringing a new approach into the negotiation of standards and regulations. And I think that's a big challenge, but it's also a big opportunity. I do believe that these negotiations do bring a call, should bring a call of attention to countries here in Geneva in the sense that it's time to be more flexible, it's time to start moving. I think that is very simple. The diagnosis is very simple. 12 years in a negotiation that does not progress is needed points to the fact that flexibility is needed. I believe that larger countries need to be more flexible. I do believe the US could lead these negotiations in different ways and that the level of ambition may, if the level of ambition in some issues may be decreased. That could lead to further movement of countries, especially in the face of this call for action that the so called ttip, the Transatlantic Trade and Investment Partnership between the EU and the US mean.

[A]

Your short term horizon mentions Bali, of course. That's the Trade Ministerial that I understand will be held in December. You talk about success in Bali. What would you consider to be success? Are you talking about conclusion of the Doha Round or something less ambitious that might be achieved by December of this year?

[B]

It is something substantially less ambitious, but still something that could mean hundreds of billions of dollars of benefits for the world. Specifically, there's a trade facilitation package that is being considered and is being negotiated here in Geneva. It is a package which will decrease or eliminate obstacles for import and export in many countries tending to clean the borders of all the inefficiencies. I believe that negotiation could be be a very, very good signal of progress being made in Geneva. Additionally, there's also some issues on agriculture that could be and are being dealt with which be beneficial to countries on lower levels of development. That meeting in Bali is a very important window of opportunity to get a positive sense of the capacity for ambassadors here in Geneva to negotiate. It's very important for the private sectors, the business communities of the world to get involved in the negotiations so that they put pressure in the governments to bring more flexibilities here to Geneva and that that may lead us to a successful end to a substantive part of the Doha Round negotiations.

[A]

We're going to take our second break. When we come back, Mr. Blanco, I want to ask you about looking beyond Bali and as your position paper says, perhaps post Doha. This is the Global Prosperity Wonkcast from the center for Global Development. Be back in just a bit. Welcome back to the the Global Prosperity wonkast. I'm Lawrence MacDonald. I'm very pleased to have with me as my guest today on the line from Geneva, Hermanio Blanco. He's the former Minister of Trade and Industry of Mexico and one of several candidates to become the next director general of the WTO. Mr. Blanco, if the negotiators in Bali succeed in getting agreement on trade facilitation, what would you see as the next step beyond that?

[B]

Well, the next step would be to work through a substantive solution to the Doha agenda for development negotiations. I believe that that's a must. It's something that could deliver substantial benefits for the world, substantial benefits for all members of the wto, but very importantly, substantial benefits for those countries that needed the most small economies and the economies of the least developed countries. That is a pending negotiation. I do believe that there are changes, and some of them I have already mentioned, that increase the probabilities of these being a success. I believe that with my experience with the way I intend to run the secretary General, with the way I intend to interact with ambassadors here in Geneva, and the way I intend to interact with governments and the business communities and civil societies of different countries, 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.

[A]

I'm glad you mentioned the role of small countries. And of course, they are the ones who stand to suffer the most if these big new regional trade agreements don't include them. I'm certainly not a trade expert, but I have two colleagues here who are. Kimberly Elliot, who focuses in particular on trade and agriculture, and Arvind Subramanian, who, among other things, used to work in the gatt. They have different views about the nature of the problem, the inability to reach an agreement. Arvind would say it's too much democracy that the one country, one vote system has made it harder to come to agreement. Kimberly Elliott says, no, you've got it wrong. It's really the big nations. It was India and the United States in the previous attempt to, to complete the Doha Round who were at loggerheads. Do you have a view on this? Whether it's the problem is in reaching an agreement, is too many voices, or is it really about the big players being unable to reach consensus among themselves?

[B]

Well, there are many topics that are being discussed on how to increase the efficiency and how to look forward to the structures in the wto. And I will welcome the analysis that are being done and welcome working with the members of the wto. But I think that there are different type of behaviors that countries have followed in the different groups of negotiations. But in general, the way in which the smaller countries, the least developed countries see this process of negotiations of the Doha Round is a sense of frustration. 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. A sense that the larger developing countries, the so called emerging economies, have not been able to reach agreements with the develop economies, very specifically with the US and the EU and that that lack of agreement has not allowed them to receive the benefits of this negotiation. I believe that in order for these negotiations to come to successful end, what we need is flexibility. And I think a very good rule of thumb is that those countries that are larger have to be more flexible than the countries with smaller sizes.

[A]

I want to ask you about over the horizon issues and I know that in the WTO that of course the high income countries, I guess the United States in particular, has been keen on pushing for agreement on services. I have something else in mind and that is there's been a lot of talk here at CGD and I think in other places about the possible role of border tax adjustments on carbon content. That those countries that proceed with putting a price on carbon may feel the need to apply tax on imports based on their carbon content if they're made in countries that don't have a price on carbon. And in particular there's an emerging idea that this might be a way to address the lack of progress in the global climate negotiations, that if some countries put a price on carbon and then proceeded to impose a border tax adjustment, that that might encourage other countries to also put a price on carbon. Could you imagine an instance where this would wind up being in the wto and if it did, presumably there'd be challenges to something like this. What do you think would be the appropriate framework for the WTO adjudicators to take in considering?

[B]

Well, I think that 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. I think that this is one more of the reasons why we have to get on with the Doha Round so that we can get and discuss topics as important as the one you have mentioned. I think it's fundamental to discuss it. It's fundamental to do things in a way that is not a violation of the multilateral rules that have been designed and at this point in time, rule the World Trade Organization.

[A]

You've been generous with your time. I know you're very busy. I really appreciate you being on the show. I want to give you the last word about your candidacy. Say anything that you like to our listeners concerning the selection process and your ambition of becoming the next Director General.

[B]

Well, I will first start by saying that the process of selection of candidates for the Director General of the WTO has been remarkable. It's one of the examples of why the WTO is a worldwide organization. The process is transparent. The rules for selection have been made public yesterday. I have no doubt that the three ambassadors which have the responsibility of looking into the preferences and opinions of different members will take us to have a Director General by the 31st of May. 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 that determines the way in which trade amongst the world countries is regulated. Thank you very much for this opportunity, Mr. Blanco.

[A]

Thank you very much. I've really enjoyed our conversation. I certainly learned a great deal. I want to take the chance to say that whether you're successful in your bid or not, and I certainly wish you success that next time you're in Washington, I hope you'll also come and pay us a visit here at the center for Global Development. Thank you so much for joining me on the show. This has been the Global Prosperity wonkcast from the center for Global Development. My guest today, Armanio Blanco, the former Minister of Trade and Industry of Mexico and one of several candidates to be the next Director General of the WTO. You can find the Wonkcast online on iTunes and on stitcher. Just search for wonkcast or CGD and subscribe to hear a new interview every week. Until next time, I'm Lawrence MacDonald. Thanks for listening.