International Political Economy the Prominent

International Political Economy

The prominent British newspaper the Economist had a recent news article about the election of a new director-general for the World Trade Organization. The reason why the elections were taking place was so that the outgoing director-general, Supachai Panitchpakdi, could be promptly replaced. Pascal Lamy, a former European Union trade commissioner from France, and Carlos Perez del Castillo, a former ambassador to the WTO from Uruguay, were the top two candidates for the WTO position.

Their candidacies reflected the growing divisions within the organization between its rich and poor members. European members supported Mr. Lamy for the position, while Mr. Perez del Castillo received his support from both Latin American and Middle Eastern members. America maintained its neutrality during the situation. The elections, which occurred on May 13, 2005, took place in Geneva, Switzerland, which is the headquarters of the WTO. After garnering enough support from developing countries, Mr. Lamy was sworn in as the new WTO director-general.

The story continues to discuss about the various challenges Mr. Lamy will face as the new WTO chairman. Throughout the world, support for free trade has greatly diminished. This is due to the fact that since earlier trade talks have successfully opened up markets worldwide, the tough issues, such as the EU's use of agricultural subsidies to support its local farmers, are all that remain to be tackled. A resolution of issues such as these has been repeatedly delayed, which has led to the widening divisions between the WTO's rich and poor members. The rise of unemployment in both Europe and America and the rising level of competition these regions face from China and Eastern Europe has led to calls from their domestic constituencies for the reinstatement of protectionist measures.

The article continues to discuss about the importance of the upcoming December 2005 WTO meeting in Hong Kong. It states that in order for this meeting to produce a successful outcome, America would have to play a leading role in making those difficult concessions. Towards the end of the article, a sense of optimism is displayed when it mentions about some of the minor breakthroughs that recently occurred, such as the narrow decrease in America's trade deficit in March 2005 and the May 4, 2005 agreement between America, the EU, India, Brazil, and Australia over the new calculations of tariffs. It is hoped that such small endeavors will lead to major breakthroughs in trade at the Hong Kong meeting.