Brazilian touch would revive global trade talks -WTO candidate

Thu Jan 10, 2013 4:23pm EST

* Candidate Azevedo says able to build bridges at WTO

* Brazil aims to increase diplomatic clout with candidacy

* Partners criticize Brazil for raising tariffs

By Alonso Soto

BRASILIA, Jan 10 (Reuters) - The World Trade Organization needs Brazil's diplomatic and consensus-building skills to bring global trade talks back to life, Roberto Azevedo, the South American nation's candidate to head the trade club, said on Thursday.

Azevedo, an experienced negotiator who has represented Brazil at the WTO, is running against eight other candidates to lead an organization struggling to remain relevant after repeated failures to reform world trade rules.

"Brazil's capacity to negotiate and strengthen the multilateral system is something that is favored by everybody at the WTO," Azevedo said in a press briefing in Brasilia. "The fact that I come from Brazil, a country with a long diplomatic history, is a positive, it will help me."

Brazil has emerged as an economic powerhouse in the last decade, which has increased its clout in global organizations like the International Monetary Fund and United Nations. The country's rise as a BRICS nation has helped its reputation as a bridge-builder between rich and developing nations.

However, Brazil ruffled the feathers of some WTO members after it hiked duties on dozens of imported products from cars to glass and iron pipes to fend off competition from foreign producers in places like China - also a member of the BRICS group of emerging economies that includes Russia, South Africa and India.

Brazilian efforts led by Azevedo to discuss the impact of currency movements on global trade at the WTO also rubbed some countries the wrong way.

Brazilian President Dilma Rousseff blames the flood of cheap money coming from developed nations for devastating l ocal industries in Brazil in what she calls a "currency tsunami." Record-low interest rates in the United States and Europe have brought droves of investors to Brazil, strengthening its currency, the real and making imports much cheaper.

Brazil circulated a proposal on Nov. 5, explaining that WTO rules contained language dealing with currency-related trade distortions but no adequate instruments to act directly. China was one of the countries to reject the proposal.

Azevedo said the drive to debate currency and trade is actually an example of how he was able to get all players to sit down and discuss a controversial issue without resulting i n "a bloodbath."

If elected, he said he would not impose the currency issue on the WTO agenda, but said that it is up to all members to advance the talks and agree on any instruments to prevent exchange rate fluctuations from hurting global trade.

Getting all members to end a diplomatic deadlock that derailed a decade of talks on trade liberalization may be a much harder task for whoever wins the WTO's top seat.

The WTO's credibility suffered a serious blow in 2011 when its member states recognized that the 10-year old Doha Round of trade talks - meant to culminate in a bold new trade deal - was, if not dead, at least at an impasse.

"In all honesty, it is difficult to say how much the new (WTO) director general will be able to do to continue the negotiations at its maximum amplitude, in the way they were originally conceived," said Azevedo.

"What the director can do is understand the wishes of the members and advance with a negotiating agenda that makes those wishes viable."

Current WTO chief Pascal Lamy's second term expires on Aug. 31. Other contenders to replace him include candidates from New Zealand, Ghana, Mexico, Costa Rica, South Korea, Kenya, Jordan and Indonesia.

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