B (3:15)

Exactly. And giving members an opportunity to exchange views on what they do.

A (3:23)

And the second, of course, is the dispute settlement Mechanism, that's the one that ordinary people like me might know about because you read about it in the paper. I was chatting with somebody who is familiar with this and they said that some of the people involved in the adjudication, their terms of appointments are relatively short, they're subject to renewal by the country that appointed them. They were suggesting that the conditions under which these, I don't know if they're called judges, under which these people work may make them subject to pressure. Since you're somebody who's been at the WTO for a long time and understands it well, I wonder, is this something where people are right to be concerned, or do you think that the conditions under which the adjudicators are employed are sufficient to protect their integrity and independence?

B (4:16)

Well, I think so far the experience with the dispute settlement system has been very satisfactory. There are two levels of adjudication. The first one is the panel, and the panel doesn't really have on it adjudicators which are hired or anything of the kind. I myself was a panelist three times and I chaired panels as well, and I did it on a pro bono basis. So I was there invited to participate by the members, sometimes, sometimes appointed by the Secretariat. And what I and the other two panelists did was examine the dispute in light of the covered agreements and try to find the most balanced solution and fair solution according to, to the text. So it was a very straightforward kind of approach. I myself never felt any kind of pressure from anyone and it was not a job. I was not applying for a job or anything of the kind. So it was pretty straightforward and very professional. At the second level, which is the Appellate Body, you have also people who are appointed for a fixed period and that can be renewed only once. So far, I haven't heard any of them complain about pressure, complain about, you know, the need for renewal. The need for renewal is in the hands of the. The renewal of the mandate is in the hand of the members. And I don't think that I haven't ever heard anything about undue pressure on the Appellate Body members and any kind of bias in the behavior of those members. In fact, they have done pretty good job. And that seems to be the general opinion in Geneva.

A (6:16)

That's great. The third pillar, of course, is the one that says allows for the evolution of the system. I think those were your words, in fact, in the statement. This would be the pillar under which the Doha Development Round is being discussed. In your statement, you seemed to hold out hope that the Doha Development Round might actually be possible to move it forward. A lot of the trade experts that I talk to here are pretty discouraged. Some are suggesting it's time not to praise it but to bury it.

B (6:51)

Well, I don't honestly think that burying it is an option. It's going to be there. If we want to move on with the organization, we have to find a solution for it. I don't think the burial of the round is going to help because the question then will be what next and what next will always be haunted by the ghost of the Doha Round, which is essentially mostly from the developing world, the fear that any kind of agenda that has development in it is not going to take off and that for them is a non starter. I don't think that we should be discouraged at all. Is it going to be difficult, extremely complex and sensitive? Yes, absolutely. It can't be any other way. But I think things have changed. I think early after the impasse, we had two problems. We had the first problem was the financial crisis and the second problem was that people were expecting the major players to change their views about what was on the table. And I don't think that, number one, we have to wait for a better economic condition because when things are good, the argument is there is no incentive to do it. When things are bad, the argument is it's too difficult to do it. So we're never going to have perfect conditions. We have to work with the conditions we have.

A (8:19)

Ambassador, I'm going to take a quick break. When we come back, I want to pursue this question of how we can move things forward on Doha. This is the Global Prosperity Wonkcast from the center for Global development. I'm Lawrence MacDonald and my guest today is Ambassador Roberto Azevedo. He is the permanent representative of his country, Brazil, at the World Trade Organization in Geneva. We will be back in just a bit. Welcome back to the Global Prosperity Wonkast. Ambassador Azevedo, I rudely interrupted you. You were describing the importance of pushing ahead with Doha. Please continue.

B (9:25)

Yes, as I said, the world environment is never going to be perfect, so we have to work with it as it is. Secondly, I don't think that anybody expect members to change their views about what was on the table anymore. So we have to work with the gaps as the gaps exist. And those two things are critical now. I believe that the political will is there. I think people want to fix it. People want to find a solution and that's not a minor thing. So what we need to do now is sit down again. I'm sure that they want to sit down, inject some confidence in the system, some trust in the system which we have been lacking for a while, and roll up the sleeves and see whether we can find not what we would like to have, but what is it that is possible and on the basis of that, try to conclude the round.

A (10:13)

It's interesting that you mentioned trust building. This seems to have been a. A theme that has come up in some of my other interviews. And of course, we have the Trade Ministerial coming up in Bali, Indonesia in December of this year. Is there a particular aspect of the Doha agenda that you think is more susceptible to progress that could help to build trust among the participants? If you are selected as the leader of the wto, is there a particular part of the agenda that you think might be more susceptible to action?

B (10:47)

Well, we have identified a small number of issues that actually could be subject to progress and which we're trying to work with and get a package by Bali. But I don't think that would solve the situation of the round or the impasse on negotiations. We need to be bolder. So I believe that for a long time we have been avoiding the critical issues, the ones that have been blocking the round and blocking negotiations. I think it's time after Bali to look at them squarely and just go straight at the difficult points. There are not many, and that's the good news. There are not many. We can try to be innovative, creative and figure something out. If we do, it is my firm conviction that everything else would move because the impasse is concentrated in just a very few areas.

A (11:42)

And where would you expect to see movement?

B (11:44)

First, I think for Bali, what we have now is some effort to develop an agreement on trade facilitation. We have in agriculture something around trade, tariff rate, quotas, administration. So in agriculture that's an important part. There may be something on export subsidization also. That's something that we are looking at. But finally, many development issues which the developing countries, particularly the least developed countries, are looking at as well. So those issues are a priority for Bali. But after that, I think again, we have to look at the issues which have been a big problem. And that's mostly market access for industrial goods and a little bit of the other two pillars which are agriculture and services.

A (12:36)

Let me ask you about the dynamic within the organization, since you've been there for a while. In a lot of the press coverage, the primary distinction is made between the high income countries and developing countries. And of course those are probably the key interest groups around which many of the issues are discussed. But there's also a different dynamic, I think, which is between the larger countries, such as your own country, and the smaller countries. What are your thoughts about that dynamic? And for you, as the potential Director General representing quite a large country and a large trading power, does this present problems or difficulties in terms of your ability to take on board the concerns of smaller, poorer nations?

B (13:30)

I think the larger economies in the larger developing economies, what people tend to call the emerging economies, are very sensitive, sensitive to the needs of the smaller economies, the least developed economies in particular. And they have been acting in a way that tries to push the agenda which helps the least developed economies for sure. But I don't think that this is a dynamic which is limited to the developing countries, the largest, the smallest, the medium. What we have today is an organization with almost, almost 160 countries. That means that you have countries of all shapes, sizes and levels of development. What we have to do is find a dynamics of negotiations that accommodates all of them. So each one will have to contribute, will have to take part according to their own possibilities, according to the contribution that they can give. And that's not simple because the spectrum varies from major powers all the way to very small, vulnerable economies, islands landlocked, which are very at the periphery of the international trade flows. So we have to figure something out mode of negotiations and interaction which allows for everyone to interact in a positive way.

A (14:55)

Ambassador Azevedo will take our second short break. This is Lawrence McDonald. I'm at the center for Global Development. You're listening to the Global Prosperity Wonk cast. And my guest today is Ambassador Roberto Azevedo, the Brazil's Permanent Representative at the World Trade Organization. We will be back in just a bit. Welcome back to the Global Prosperity Wonkcast. This is Lawrence McDonnell. My guest today, Ambassador Roberto Azevedo, one of several candidates to become the next Director General of the World Trade organization in Geneva. Mr. Ambassador, before we took the break, we were talking about the dynamic between larger and smaller countries. One of my colleagues here, Arvind Subramanian, who I think previously worked in the wto, he has written a somewhat provocative piece in which he says the trouble with the WTO today is there is too much democracy that the one country, one vote system is making it difficult to reach agreement. I have another colleague here, Kimberly Elliott, who works on trade. She disagrees with that. It's one of the nice things about being here at cgd. We don't take any institutional views. I wonder what your thoughts are. Is it possible the WTO is too democratic.

B (16:37)

I don't really believe that too much democracy is ever bad for anything. The more democracy we have, the more legitimate the system, the more credible the system. Is it more difficult to operate in a democracy? Yes, of course it is more difficult. You have to take on board very different views. But, but the fact that the negotiations in general are more complex, that the negotiations are more diversified, it doesn't mean that it is impossible to have an outcome. And when we do have an outcome, it's a much more credible, it's a more long lasting outcome and it is also one that benefits more people that have more people on board. I think we have operated in many areas of the WTO with 100 plus countries in a productive way. And I don't believe that because one particular round of negotiations is taking too long, that means that the system is permanently or fatally flawed.

A (17:47)

I want to ask you about an over the horizon issue. In addition to working on trade and foreign assistance and global health here, we also do some work on climate policy. And recently there's been a lot of attention, I think here at the center for Global Development and also more broadly to the connection the trade related pieces of climate action. I'm thinking in particular of a new book by Dieter Helm, Climate Crisis, Climate Crisis Crunch, I believe, in which he talks about when countries put a price on carbon, as the EU has done, they basically wind up importing high carbon goods from elsewhere. And he says that we're counting the wrong thing. We should be counting carbon consumption rather than carbon production, that is count the emissions in the things that you consume, not only the things you produce. This has led to some discussion about the possibility of having border adjustments. That if a country does implement a price on carbon, whether through cap and trade or through carbon tax, that it would be not only in its own interests, but perhaps in the world's interests for them to then impose an appropriate border adjustment on their imports. And there's been a lot of discussion as to whether an action like that would be WTO compatible or not. It's kind of a long question. I apologize. But I'm interested in your views as to the role that the WTO might play in climate in general and in particular the history of adjudication around carbon tariffs or the agreements. Any light you could shed on whether such a thing could be WTO compatible?

B (19:38)

Well, it is a very long question indeed, but. No, no, no, that's okay. I like the. But it's more than long. It's very, very, very complex. And let me tell you. The basics. The basics is this. It is not impossible with the current disciplines that you have in the wto, the current rules to impose border adjustments that take into account climate related policies. The problem is that how to do it in a way which does not benefit the domestic production. Because most of the times the problems we have is that very legitimate concerns and very legitimate measures are used sometimes to protect, to protect segments of the industry, not to protect the environment, not to protect the climate, but to protect the industries. And that's where you run into trouble. How to impose border adjustments on trade related climate measures which will in effect address the problem of climate change and not distort the means and the ways of competition among WTO members. That's the question. How to do it in a way which does not become veiled protectionism. The problem is that, and you can adjudicate that clearly on the basis of the disciplines we have in place, but it's extremely complex to do it in a non discriminatory way in a way which does not introduce distortions to trade among WTO members. That's the problem.

A (21:26)

We've got just another minute or so. I want to give you a chance to have the final word on anything you want. But first I want to draw you out a little more on that. You say it's extremely complex, but it's possible. Can you shed some more light on how the WTO would decide if something is in fact protectionist in intent or effect and thereby avoid that?

B (21:48)

It is on a case by case basis. But for example, suppose you are a country that is imposing a border tax adjustment on the transportation of goods which are coming from faraway countries. Okay, so that means in essence that a country which is. Suppose you are in Switzerland and you're imposing a border tax on meat products. Meat coming from Australia will be facing a much higher border tax adjustment than meat coming from France, for example, which is a neighboring country, arguably because the calculation of the carbon footprint for the transportation is very complicated, complex in itself. But how do you then ensure that somebody is doing that because of climate concerns and not because they want to favor neighboring countries to the detriment of faraway lands. So that kind of discussion is the one that is going to be underlying a measure that is taken like that. But so the question is, how can you show that you are actually addressing a climate concern and can you prove that you are? Measure is not in itself becoming protectionist. It's on a case by case basis. It's extremely complex. And that's, I believe, why Nobody has imposed them yet.

A (23:11)

I see. Very interesting. Well, I certainly learned a lot. I said I was going to give you the last word. If there's anything more you'd like to say about trade, development, the WTO or your candidacy, the mic is yours.

B (23:27)

Well, thank you very much. No, I honestly believe that whoever the next DG is, I wish him the best luck, including myself, if it's me, to unlock the realm. Because this is really where the system has a problem. And development hinges on the multilateral system functioning, especially for the smallest economies. They're small. They're not priority markets. They are not going to be the focus of free trade areas and bilateral agreements and things like that. They need the multilateral trading system to work. And that is the system that will benefit everyone. The big, the small, the medium, everyone. And if I can contribute to that, if I have the trust of the members to contribute, I would be very honored. And thank you very much for the opportunity to speak to your listeners.

A (24:21)

Ambassador Azevedo, it's been my pleasure. Thank you for taking the time to join us on the show. This has been the Global Prosperity wonkcast from the center for Global Development. My guest today, Ambassador Roberto Azevedo of Brazil, the permanent representative to the World Trade Organization and one of several candidates to become the next Director General. You can find the Wonkast online on itunes and on stitcher. Just search for wonkcast or CGD and subscribe to hear a new interview each week. Until next time, I'm Lawrence MacDonald. Thanks for listening.