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An open position as the head of the WTO pits Brazil against Mexico

May 7, 2013

The World Trade Organization (WTO) is set to choose the first Latin American director-general in its 18 year history May 8. The region's two largest nations, Mexico and Brazil, are now facing off for the leadership position as both of their national candidates are finalists for the job. Former trade minister Herminio Blanco is Mexico's representative whose main accomplishment on the international stage so far was to lead his nation's negotiations with the United States and Canada for the North American Free Trade Agreement. Brazil has sent Roberto Azevedo, who has been his country's WTO ambassador since 2008.

Brazil is currently Latin America's largest economy and has been since 2005 when it surpassed its northern rival, however, a majority of analysts polled by Bloomberg believe that Mexico's growth will outpace Brazil's for the third straight year in 2013.

The competing nations have also found themselves at odds recently on the world stage. Brazil chose to back France's Christine Lagarde over Mexico's Agustin Carstens to run the International Monetary Fund in 2011, and Mexicans publicly criticized a Brazilian bid for a permanent seat on the UN Security Council in 2012.

"There's rivalry and competition there," Michael Shiffer the Inter-American Dialogue president, told Bloomberg. "Mexico is feeling very confident. As they seek to gain more international clout, Brazil is on their mind."

An edge for Mexico
Brazilian officials were confident as of May 6 that their candidate would be selected for the job.

"The Brazilian candidate has all the qualifications to do an excellent job at the WTO," said the nation's Foreign Minister Antonio Patriota.

Brazilian confidence may have experience a sharp setback the following day, when the 27-member nations of the European Union (EU)decided to throw their votes behind Mexico's Blanco. Though EU member nations technically have separate votes under WTO rules, the nations tend to vote as a bloc to buttress their power within the organization. 

The EU support likely grows out of the perception that Blanco's economic policies, particularly in regard to trade, are more liberal than Azevedo's. Though Europe and Brazil generally have a stable trade relationship, tensions rose in 2012 when Brazil boosted tariffs on 100 goods to protect its manufacturers.

There are also some concerns at the rapid increase in inflation Brazil is experiencing, noted Bloomberg. Between March 2009 and March 2012, Brazil's inflation rate rose 1.4 percentage point to 6.59 percent, while Mexico's dropped inflation rate dropped to 4.25 percent.

International finance enthusiasts and partisans for either Mexico or Brazil when the WTO announces who its new leader will want to have an international calling card hand so they can discuss the merits or failings of the choice. 

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