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Profile: Supachai Panitchpakdi

Published by The New York Sun on 2005-03-16

"Look at this way," said Supachai Panitchpakdi of Thailand, who has headed the international economic system's most powerful body, the World Trade Organization, since September 2002. "My three-year term ends soon, I'm about to change jobs, but I don't have to relocate. You will agree that this is a good thing."

Mr. Supachai's new job will mean holding on to the same title -- director general -- but at the United Nations Conference on Trade and Development, more widely known as Unctad. Like the WTO, it's based in Geneva. His daily commute won't change much either, for Unctad's steel-and-glass building is just up the drive from the WTO's limestone-and-granite headquarters on the pastoral shores of Lac du Geneve. So the fact that the 58-year-old Mr. Supachai won't have to relocate is certainly a good thing for him.

But the reporter couldn't quite overcome the impression that Mr. Supachai was putting a sweet gloss on his move from the WTO, an organization whose mission is to promote free trade and removal of tariffs. After all, Unctad, which began as an international conference in 1964 and developed into a permanent 2,000-person bureaucracy, was heavily influenced by its founder, Raul Prebisch of Argentina, a neo-Marxist economist who believed that protectionism was acceptable. Prebisch remains Unctad's spiritual force.

The reporter had also heard that Unctad wasn't necessarily Mr. Supachai's first choice for a post-WTO job. After all, prior to coming to the WTO, Mr. Supachai was Thailand's deputy prime minister, and the prime architect of that country's recovery from the 1997 Asian financial crisis.

Was a man of such accomplishments prepared to become a glorified paper pusher at a second-rate UN bureaucracy like Unctad? Didn't he want to be UN secretary general, when Kofi Annan's second term expires next year?

"No," Mr. Supachai said.

But hasn't Unctad become irrelevant, especially when the WTO is widely recognized as the main global forum for pushing expanded trade and thus implicitly promoting sustainable economic growth in rich and poor nations alike?

"Unctad tries to help developing nations make better use of the international system," Mr. Supachai said. "It can help promote investment in developing countries. I don't see any conflict between the two organizations. As for Unctad being a bureaucracy -- well, a bureaucracy is a bureaucracy everywhere only if you allow it to flourish."

It's not that Mr. Supachai is being pushed out of the 148-member WTO: directors general get only one term in office.

"I'll miss the collegiality at the WTO," he told the New York Sun after lunch at the Council on Foreign Relations on Park Avenue. "The WTO is the main mechanism for settling trade disputes. We've had 355 cases in our 10 years of existence -- more than our predecessor body, GATT [the General Agreement on Tariffs and Trade] did since it came into force on Jan. 1, 1948."

The secretive GATT -- which began in 1947 with 23 member countries -- had nowhere near the powers of dispute settlement that the WTO does. The low-key Mr. Supachai is widely credited with making the WTO more transparent. He has never shown partisanship in behalf of the developing world -- his home -- whose 135 states almost universally rail against the U.S. and other industrialized countries for subsidizing their farmers, and for not opening their general markets sufficiently to third-world products. Nor has he favored the wealthy countries, which contend that the high tariffs on imports by developing countries inhibit the advancement of a more liberal trade regime globally.

Indeed, Mr. Supachai pointed out those developing-country tariffs on industrial products are far higher than those in the developed countries, where the average tariff is less than 4%.

"This is not to say that industrialized countries can't do more to reduce tariffs," he said. "The fact that rich-country duties on products from the world's 48 least-developed countries are often three or four times higher than those applied to products from other rich countries is troubling for me." He added that mandatory, or "bound," tariffs in many developing countries average between 30% and 50%; and while applied rates are lower, they are often in the 20% to 30% range, Mr. Supachai said.

The real challenge before the WTO now is to complete negotiations on the so-called Doha Round, whose agenda ending agricultural subsidies in rich countries and liberalizing global trade even further. Unlike earlier trade negotiations -- such as the Uruguay Round, which began in 1982 and was completed in 1994, just before the GATT metamorphosized into the WTO in 1995 -- the Doha Round specifically establishes poverty-alleviation as an objective. Mr. Supachai expects that by the time trade ministers convene for their biennial meeting in Hong Kong in December, substantial progress will have been made in the informal negotiations.

It's not going to be easy, Mr. Supachai said, adding that he sensed a "degree of complacency" among nations even though the Doha Round was the single most important step they could take to make world trade more equitable.

He was concerned, Mr. Supachai said, over the proliferation of bilateral trade deals -- there have been some 100 in the last five years, with the figure likely to rise to more than 300 in the next few years. "This means that the time and personnel that governments can allocate to multilateral negotiations at the WTO is adversely affected," Mr. Supachai said. "The bilateral agreements are pure political expediency. But multilateral arrangements work to everyone's advantage in a growing global economy."

Trade in the global economy is currently around $15 trillion. America and Europe dominate such trade, with around 20% each, but emerging powers such as China and India are catching up. Whoever succeeds Mr. Supachai is going to have to contend with fiercer trade competition between and among rich and developing nations. His successor will also have to inevitably contend with more trade disputes being brought to the WTO for adjudication.

One of the four candidates being considered for Mr. Supachai's job is Pascal Lamy of France, the former trade commissioner for the 25-nation European Union. He told the Sun: "Yes, I foresee a tougher time for whoever follows Supachai."

Mr. Supachai himself seems to have mixed feelings about his impending departure from the WTO.

"I've learned tenacity in this job, and I would advise my successor to keep coming back even when there are setbacks," he said. "The WTO has never been more relevant, even though our image still needs a bit more polishing. But it still takes a lot of time to get things done, to resolve disputes. I'm easily annoyed by that."

Pranay Gupte,
Senior Writer and Global-Affairs Columnist

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