Thursday, May 2, 2013

The UIGEA May Torpedo America’s Preferred Head of The WTO

Roberto Azevedo prepares to pick his friend’s nose.

The long and arduous process of choosing a new head for the WTO has reached its final stages. No matter how this turns out, it is going to be a significant event. For the first time, well, ever, a citizen of a non-first-world nation will lead the WTO. The first candidate, Herminio Blanco Mendoza, is Mexican, while the second candidate, Roberto Azevedo, hails from Brazil.

Azevedo has been mentioned on these pages many times before mainly because Brazil is one of the few non-Western nations to successfully go up against the U.S. in trade disputes and actually come out on top (no small achievement). Brazil is also the largest nation that has expressed full support for Antigua's efforts to fight the United States.

The two candidates are quite different. Azevedo has never been officially positioned as a trade minister, whereas Blanco Mendoza is well-versed in finance. Blanco Mendoza has been out of public life for many years, whereas Azevedo has disregarded professional titles and is utterly involved with the day-to-day operations of the WTO. He is a widely respected leader and has fulfilled the role of finance minister in practice, if not in name.

But that’s all to be expected. Hotly contested races for an official position always have dichotomies between the candidates. What makes this interesting is that the winner may be chosen not by some weighing and measuring of his credentials, but whether the United States wants him or not. That is to say that whoever the U.S. wants is likely to not get elected. On a grander scale, this election may in fact signal the end of American economic hegemony.

That may seem like a sweeping statement, but bear with me. Blanco Mendoza was educated at the University of Chicago, meaning that his economic theory is doubtless rooted in libertarian and Austrian wing-nuttery. That means that he is going to be very popular among the conservative groups in American politics. This also means that he is going to be the chosen one for the major Western powers who are currently gumming up the WTO, namely the U.S., the U.K., and Canada.

This framing of his character and position is precisely the framing that voters in the WTO have taken. Blanco Mendoza is seen as the sort of “old order” candidate who would just as happily see everything stay the same (an accurate portrayal seeing as he was one of the architects of the abominable NAFTA). Because of that, the nations that want to see the exact opposite of that are rousing opposition to his appointment. And this is working wonders for Azevedo, who now appears to be the frontrunner.

I want to reiterate this point because it is just so critical: Roberto Azevedo is very likely to get the nomination precisely because the U.S. wants Blanco Mendoza to get the nomination, which makes nearly every third and second-world nation on the planet not want Blanco Mendoza. Could there be a greater condemnation of America? I doubt it.

I mentioned the UIGEA in my headline, and I’ll finally get around to addressing it here. The UIGEA is much bigger news in other countries than it is in the U.S. Indeed, in America, most people aren’t even aware that the law was ever passed, much less are they aware of the conflict that it is causing.

The significance of the UIGEA has been amplified by ongoing frustrations of the the Doha Talks and the global economic downturn. Briefly, the Doha Round of WTO trade talks was/is an attempt to update international trade rules for our wonderful, modern age. The WTO, like the GATT (General Agreement on Taxes and Tariffs) before it, was originally formulated for the benefit of powerful first world nations.

Well, one interesting element of this wonderful, modern age in which we live is that smaller nations are demanding a larger part of the global pie. This is irking the larger nations, so countries like the U.S. and the U.K. torpedoed the Doha Talks because they refused to back down. This torpedoing continues to this day, and it is well-understood in the international community that it is being caused by the infuriatingly selfish and arrogant behavior of the U.S. and her allies.

Throw into this mess the UIGEA, which is a law that Antigua fought in the WTO and won. They won multiple times. The response of the U.S. is exactly what one would expect of a giant baby: they ignored it and threw a tantrum. They continue to ignore it to this day and nigh-on refuse to even talk with Antigua.

It’s like the straw that broke the camel's back. All of the Caribbean, Brazil, and dozens of other nations have stood with Antigua in this conflict. The UIGEA has acted as a locus, around which nations are rallying against the United States.

This has essentially destroyed the chances of America’s chosen one to win the election. And rightfully so! The United States' history of international bullheadedness is a shameful history indeed. Moreover, it is a history that was literally destined to end. Because eventually other nations were going to demand to be heard. I mean, like, duh! Unfortunately, just because other nations rising to power is an inevitability doesn't mean that the U.S. is going to take this all sitting down — oh, no!

Regardless of that, though, this is destiny. It is going to happen. It is happening. And the ascendance of Azevedo to the WTO seems to signal the beginning of this great transitional period.

That said, America shouldn’t be too afraid of Azevedo. While he is definitely not their friend, he is also not their enemy. Currently, many in the international community see the WTO at a crossroads of either being supportive of U.S. interests or supportive of third world interests, and that these interests are mutually exclusive. As such, the U.S. is throwing a hissy fit when they don’t get what they want and the third world is working to muscle the U.S. out of the WTO.

Azevedo does not want this, and he has said as much. He still sees the WTO as a viable cooperative body, where the interests of all nations are taken into account. As such, while the U.S. would no longer be able to use the WTO as its plaything, the U.S. is still one of the largest, most powerful nations on Earth. Their concerns would be heard well.

But that subject is beyond the scope of this article. For my purposes, the important and noteworthy point is that the UIGEA — a law aimed at our tiny, little corner of the global economy — is a catalyst for gargantuan, global, economic policy.

There is something almost funny about that.