Interview: Supachai Panitchpakdi Director general World Trade Organisation

Reformer aims to curb political brinkmanship in global trade talks
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The Independent Online

The G8 leaders sent a firm message to rich areas such as North America, Europe and Japan to set a deadline for eliminating the subsidies on their farm products that poor countries say make it impossible for them to compete.

Dr Supachai made a dramatic intervention at Friday's meeting of heads of state, telling them the talks were "paralysed" and urging them to send a strong signal to the trade ministers at the WTO's Geneva headquarters. His speech triggered a huge debate that took up four-fifths of the lunch meeting

"That kind of message is helpful," says the former deputy prime minister of Thailand with typical understatement. "The G8 is important [and now] we have to negotiate with 148 countries and we need some leadership.

"We have exhausted the technical debates in Geneva and we need political inputs as early as possible. I am worried."

As Dr Supachai takes a break from a heavyweight conference on world trade on the fringes of the G8 summit, it is obvious he is extremely worried. "We have been a little bit slow in the progress that we are making in the summer recess and that's a bit alarming," he says. "Because if we don't make substantive progress by July we will leave too much on the plate for the summer months. Then we will have only two months to make a full preparation for Hong Kong."

There is mounting speculation that the talks are likely to befall the same fate as the previous jamboree meeting in Cancun, Mexico, in September 2003. Then the entire negotiations collapsed after four African states pulled out, accusing their rich partners of holding back on their offers until the last minute.

"We can't repeat the mistakes of Cancun in going there with a fully laden programme," he says. "We need to finish most of our key negotiations before we move to Hong Kong andthen we can dot the i's and cross the t's. This is what I'm worried about."

Specifically he is worried that some countries and negotiators have learned few of the lessons from Cancun and still engage in a "game of brinkmanship". "The delegations in general try to hold back their flexibilities," he says. "They don't show a flexible position until they think they can squeeze as much as possible out of the negotiations. We call this brinkmanship. You can do this when the negotiations are not complex and there are a few countries that can determine the final outcome."

This week Dr Supachai had to listen while Ernesto Zedillo, the former president of Mexico at the time of the Cancun talks, describe the state of negotiations as "very disappointing" and some of the initiatives proposed by rich nations on farm subsidies as "a backward step that sanctified some of the big sins committed by the US, Europe and Japan".

The key issue in the talks is the call on those rich areas to cut out their export farm subsidies, worth some $300bn (£172bn) a year. Poor nations say that vast quantities of subsidised cut-price food is dumped on their markets, making it impossible for them to grow their own farm industry.

The US and EU have offered to eliminate these subsidies and the communiqué of the G8 appeared to push things along by raising the issue of setting a timetable for their elimination - an issue that continues to divide countries such as the UK and France.


Dr Supachai is clearly encouraged by the progress made at Gleneagles and hopes it will provide the necessary political impetus. But there are other issues - some complicated but all capable of bringing the talks crashing down with little warning. Countries also have to agree on non-agricultural market access, a formula for lowering industrial tariffs, rules on products that need special protection and other issues such as cutting customs barriers and protecting intellectual property rights.

"At the moment the members are making full effort but my assessment is that we are not making really substantive headway in the key areas such as market access," Dr Supachai says.

He adds that there are still "vast differences" over the formulas to be used to lower tariffs. "I was hoping we would have those thresholds as we move into July," he says. "Maybe we don't need everything in total but at least the structure. But even in the formula there are vast differences. That's still a bone of contention. If we are serious we can agree the numbers on bands and tariffs and we can agree that likely structure of the formula and a likely framework for special treatments and products."

Everything in the WTO is about compromise. Even his own appointment was a fudge - the members could not decide between him and the former New Zealand trade minister, Michael Moore, so split the six-year term into two.

With G8 behind him, the WTO's leader is looking to a mini-ministerial meeting in China at the end of this month to fire the starting gun for the hard negotiations in the run-up to Hong Kong. "This is July and there are a few weeks left. I'm banking on the meeting in China to reach into minds of ministers to see how serious they are on their commitments," he says.

He will deliver a report to the organisation after the meeting that will set the tone for the negotiations. "If this report does not have serious conclusions and if there are more divergences than convergences, then it will take a lot of work," he says. "We should make sure that the political commitment is there."

He is particularly sympathetic with the needs of smaller, often African, countries that do not have the vast army of experts and lawyers who can negotiate on all the issues simultaneously. "If we have meetings day and night, the big delegations can cope with this, but there are African delegations that would have a really hard time because we have three or four key negotiations going on at the same time."

Since the creation of the WTO a decade ago, anti-globalisation protesters have often vilified its director general as the personification of all they despise. But Dr Supachai insists: "I am a facilitator and all I have are devices and ways to get people together in many kinds of meetings. I have to send letters to ministers to convince them that they have to focus on the key areas. I can facilitate but I cannot make the final decisions."

It is hard to imagine why anyone would volunteer to be the director general of the World Trade Organisation. The DG has little personal power and finds himself perpetually caught in the crossfire between rich nations, poor countries and anti-globalisation. On top of that, the successes in the job seem, historically at least, to be outweighed by the failures.

"It is a bit tough ... but I am proud of what I have achieved," he admits. Dr Supachai's three-year term finishes at the end of next month. It looks certain he will leave office with the global trade negotiations resting on a knife-edge, with little more than two months until Hong Kong that is supposed to herald a deal between the WTO members.

Trading places

Position: Director general of the World Trade Organisation since 1 September 2002

Salary: $232,785 (£133,600)

Age: 59

Career: PhD from Erasmus University, Rotterdam. Bank of Thailand 1974-1986. Deputy Minister of Finance 1986-1988. President of the Thai Military Bank 1988-1992. Deputy Prime Minister 1992-1995

Personal life: Married with a son and daughter