• Monday, December 04, 2023
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BusinessDay

‘I’ll see to successful conclusion of the DOHA negotiation to benefit Nigeria’

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 Q:What experience would you bring if selected as DG of WTO?

A:The experience that I would bring to WTO is both in the public and private sector. In the public sector, I was the chief negotiator of the North American Free Trade Agreement (NAFTA) and, as you already know, it is a free trade agreement between Mexico and the US and Canada. I was also the minister in charge of negotiation between Mexico and the European Union. I negotiated also with countries such as Nicaragua, Bolivia, Honduras, the Salvador; most of the countries in Latin America, small and large countries, so I bring that experience which I believe is what is needed to solve this WTO negotiation that has been pending for many years now – 12 years, actually. It involves the large countries – the US, Japan, and European Union. It involves medium-size countries – Brazil, Nigeria, Mexico, India, Indonesia – and also involves small countries, and then involves the least-developed countries, a good chunk of which are from Africa. So, I think I bring that experience as a negotiator who can see what is going on in the WTO and try to bridge the gap.

Number two, I have been for more than a decade now on the business side and here as a member of boards of Mexican, Asian, European, and even US companies. So I also bring that experience of somebody that you could call not only the writer but also the user of the rules for trade and investment, and that is a different perspective. Businessmen do things differently from diplomats or bureaucrats.

I think those two elements, which I believe I do at the highest level in the sense of my experience in negotiation, my experience as a minister, my experience as the head of an important corporation, as an adviser and as a member of boards, would bring the necessary skills to bring the negotiations to an end. This is very important because although the WTO has functioned very well, these negotiations have lasted for 12 years now. It is stuck, it is not moving, and it is very important for that negotiation to move forward and for many reasons. One special reason is that many of the topics of this negotiation are designed to favour the development of the developing countries, especially to further the development of the least-developed countries. That is what I bring.

I bring also the fact that I am Mexican and as a Mexican, I have the experience of a country that has been very successful with trade. As of now, Mexico is exporting more than $1 billion per day. Every day of the year we export $1 billion and that has created a lot of prosperity in different regions of Mexico. However, not far from those regions, we also have regions where poverty is very evident – as evident as in any country in Central America and in Africa. That part also is useful. So I bring experience from public and private sector, for somebody that negotiated with big and small countries. I bring the experience of somebody in a country that has areas that are developed and in that sense, I relate the issues in developed countries to my business connections, but I also connect easily with the least-developed countries because I have a Mexico bad reality.

Why are you in Nigeria?

Well, we are in Nigeria because it is the leader in Africa, not only because of size or history, but because of the actions that Nigeria has taken in the neighbourhood. Nigeria is a leader, no doubt, in many of the progressive movements, peace movements, and in 

 

ECOWAS. As such, we wanted to come just clearly because we would like to have the support of such an important country, but also because Nigeria has been a leader, having interest in network with all of its neighbouring countries.

I wanted to hear from Nigeria’s ministers and, very fortunately, I feel very honoured that President Goodluck Jonathan received us. We talked to ministers and had the honour of talking with Mr. President on how Nigeria sees the WTO – what are the expectations, what are the frustrations, what are the things that they would like to see happening?

What was the nature of your conversations with these very important Nigerian officials and from your meetings, what assurances did you get that Nigeria would support you?

I presented respects from the authorities in Mexico, very specially President Enrique Peña Nieto’s greetings and his invitation for President Jonathan to visit Mexico. There have been conversations and, hopefully, President Jonathan would be visiting Mexico at some point in time in the near future. That was the first element. The second is that I told him why I believe that among these nine candidates, I would be the most appropriate to bring these negotiations to an end so that Africa and especially Nigeria can receive the benefits that are there. And those are very important benefits that are concentrated a lot in agricultural products, in decreasing the subsidies that the US, Europe and all the developed countries give to agricultural products; which means that they take away competitiveness from producers of cotton, producers of all the other agricultural products that Nigeria does so well. And for those subsidies which also are very detrimental for exports and, very importantly, the tariffs and other various issues that Nigeria is faced with, President Jonathan was very enthusiastic about it.

Finally, something that was very useful for me is for them to tell me how they see the WTO in the future – what are the sources of frustrations and what are the hopes? However, there was no commitment yet to my candidacy. At this point in time, we are not looking for commitment. We know there are two African candidates, we know that naturally Nigeria will consider one of those two, but what we know is that in the first stage of the selection process, there is a possibility of a country to express their preferences not for one but for three or four candidates. And what we told them is that we would certainly be very grateful if we are in the list of those that would be considered by the country.

Were there issues, reservations raised by the Nigerian officials against your candidacy?

Yes. The main issue as I may imagine is the concern that the exports in which Nigeria can be competitive many times are faced by barriers, by subsidies from the US especially. It is unfair for the producers here in Nigeria to face those high obstacles, and I told them that was one of the main results of the successful DOHA negotiation and that I could contribute for those benefits to be delivered to Nigeria and the surrounding countries because I am by far the most experienced negotiator of all of the candidates with very high level experience from very difficult negotiations. I could bring that, plus my knowledge of how the business sector works. In these negotiations, it is very important that we bring the business sectors back interested in the negotiations so that they can push the government to be more flexible.

Specifically, what would your candidacy bring to us in Nigeria?

It would bring the highest probabilities of having a successful negotiation. And that would mean that what has been discussed and negotiated during these 12 years that are still not a done deal will deliver benefits: decrease in tariffs for agricultural exports (cotton is an example, but there are many others), decrease in the subsidies that countries such as the US and Europe use to help their producers and, very importantly, decrease in the subsidies that the US uses to promote exports.

Why is DOHA Agreement a very difficult one to be finalised?

It is difficult for several reasons. One, because it has very long number of topics, issues, chapters. It is difficult because there are 159 countries involved. There have been problems, yes, because we had one of the worst crises in many years that have made countries more responsive and less proactive in their decisions. But the question is: how can Herminio Blanco contribute to this? From what I have told you, I am convinced that at the beginning and at the end, negotiations are human, that you have to interact with a human being like you, that you have to understand what the positions are politically; certainly, what the mandates are, and you have to understand the psychology. And by doing that, you start bridging the gaps. I have done that successfully in negotiations that I have been involved in, negotiations that were very difficult; not with 159 countries, of course, but with three, five countries. But those negotiations were also tremendously difficult.

That is what I bring and I believe that I would be quite a success for the world because it would bring the additional push that the world needs in terms of demand, in terms of being able to get out of the drudgery. The other thing is that I do have an important network with the private sector, as I said. In my business, I have built a network, which would help me convince the private sector of different countries to push their governments to be more flexible. As you may imagine, if our negotiation has not been finished in 12 years, it means both sides miss opportunities. I can work with the private sector to move their governments to get closer.

You noted somewhere that African countries are the main losers in the DOHA impasse and that if you become the next DG of WTO, reaching a successful conclusion in DOHA is one of your deliverables, if not a major one. Now who are the winners and how do you intend to bring all the concerned parties to the table to end this 12-year-old impasse?

What I said and what I am convinced about is that this DOHA Round was designed with development in mind. The name is the DOHA Development Agenda (DDA). The negotiation has not yet been able to be concluded. The deliverables in terms of development cannot be delivered and I think Africa would be one of the big winners in terms of decreased tariffs, subsidies for agricultural products. But right now it is more than winning for countries that have kept the same position, there are significant problems in what is called non-agriculture manufactured products. The most difficult negotiation has been between the US on one side and also Europe, but especially the US and the big developing countries, so-called emerging economies. That has been a point of very contention.

In bringing the parties to the table, I think there are three elements that could be very useful. One is that the US and the EU have announced a negotiation of a free trade agreement amongst themselves, the two largest economic units. That has been, I think, a message to the world, probably to some of the countries that have not been willing to, which is: we want to negotiate, but we won’t negotiate with you, we would negotiate amongst ourselves. So that challenge is there and I certainly hope they also see it as a call for action by countries in Geneva.

I do believe the US and the EU are reasonably good players in the world and they will not like to make the WTO irrelevant because if they spend all their resources in the negotiation of their free trade agreement, and they stop putting priorities in the WTO, then the WTO would become irrelevant because you would have in the WTO rules which can become antiquated. Those rules were negotiated almost 20 years ago. The negotiations ended in 1994, but that negotiation was established in 1986. So we are talking about last century. The rules are getting antiquated and if the US and EU will never share some new rules which is the essence of the negotiation, then the WTO stands being irrelevant. I don’t think that would be good for small countries; it will not be good for Nigeria, it will not be good for Mexico, and it will even not be good for the US and the EU. So I also would expect the US and EU to be more flexible in the WTO.

The other thing that is interesting is that although the macro-economic situation is still fragile, it’s nothing like it was months ago. I think that everybody feels that from now, things would get improving, even if slowly. So that worry and that sense of being very protective by governments of so many countries may not be very necessary. The third thing, which also may seem to be trivial but very important, is the fact that a new team will come into the WTO as DG and as deputy DG. That is psychologically good. It means you have new faces, new relations, new psychology. I think I can be a leader of that change.

You have a vast experience in international trade. How would you assess trade among African countries as against their foreign partners?

I think there is simply a sheer element of growth that you have in many of the countries. Obviously, there are big challenges in terms of arm conflicts deal in the continent but if you see the growth and the richness in natural resources and human resources, which are the most important elements, you see that this is a region that is bound to keep on growing and that what has happened in regions of Mexico will happen here more and more. So in that sense, the trade for Africa should be, as we have it in Mexico and other countries in Latin America, an excellent tool for prosperity.

But for the trade that is happening, it seems that something has to be done. So opening markets to WTO is another important part. There are Nigerian products in which Burkina Faso, for instance, is very competitive and the main one is cotton, but those are products which are very difficult to export because the consumers and producers of cotton behave in a very unpredictable and dispassionate way for countries of this region; so that is something of a good push.

I would say that also trade is not about opening other markets; it’s also about opening your own market to bring products which help companies to be more interested in investing and being more competitive. Trade is very important also because importing products, importing parts, importing components, importing capital at better prices bring competitiveness to the companies of Nigeria. I think there is a package which is not only trade. But what should be done, I think, is in part trade and in part push many other reforms that would help you remain more competitive. Trade is not only a tool to promote growth; it is a very useful tool, but it has to be accompanied by a set of other reforms to bring more competitiveness to your different sectors.

Tell us more about these special safeguard measures that are keeping developing nations as subsistence farmers rather than agricultural exporters and how you intend to change this.

The role that a DG of WTO plays is one of a helper between the members to reach agreements. So you have to be able to understand what the different members want and then try to bring their positions to a reasonable closeness so that the negotiations lead to results. That is a very important part of what a DG does. A DG is also in charge of managing the organisation and this is very important. What the WTO has done in terms of mechanisms to have transparency on trade policies is something that can be very stable in sharing experiences of all the countries. Other countries have been successful in putting a policy package that has led them to more diversified exports, to fast growth that is more equal across regions. The fora in the WTO can be very useful in this respect.

How do you intend to ensure trade balance among member nations of the WTO?

As a DG, there are several responsibilities. The edgy one is to bring the DOHA Round substantively to a successful solution. How do I intend to do that? Well, what you have to have is an analysis of what is on the table for different countries, consultation in Geneva and also in the capitals to see what has to be kept, what has to be dropped, and maybe what has to be added. That is what I think is my main objective, task or responsibility. But then you have to look at what is going on in the other places, very importantly in trans-Pacific partnership and in the trans-Atlantic trade and investment partnership. What they need in WTO is bring the rules at the standard of the best free trade agreement in the world because that is what promotes trade and investment, which in turn promote employment and prosperity.

Do you see a robust model in Mexico that can be replicated in the Nigerian agricultural sector?

What I think is very important is that countries that are relatively the same size, the same composition, with the same long history such as Nigeria and Mexico should have more cooperation. Our agricultural sector has seen a lot of problems, but there have been some improvements. Mexico does not have good weather conditions to be a major producer of grains for exports, so we are a large importer of corn. However, we have turned to be very good producers of fruits for exports and also processors of fruits for exports. That has brought to many regions of Mexico a lot of investments, jobs.

So what our agreement with the US has obtained is that the barriers that we faced before with the exports of avocados, tomatoes, and many other products where we are competitive have been removed and such commodities have now been sold at a substantive level and we have become very successful exporters in that.

WTO seems to be so centralised in Geneva. Would you consider decentralising the organisation in the sense that we begin to see regional offices being planted in a country like Nigeria, at least for sub-Saharan Africa?

I think what you are pointing out is very important and it is so because different countries in different regions have to play a part in the process of the negotiation. Countries need to feel part of the negotiation, and by countries I not only mean the governments but the representatives of different groups – the business sectors, civil societies, environmentalists, etc. I think the connection and the communication should be the central part of WTO. Thinking about putting offices is good but I see that, nowadays, with the internet and probably the cooperation with different departments of Nigeria’s government, we could do a lot in the sense of keeping society fully informed of what is going on, what the resources are that could be used, in the sense of technical assistance, capacity building for the government or for the private sector, and so on.

How would you assess President Jonathan’s economic and trade policies with regard to his plans to transform Nigeria and push the country to become one of the 20 largest economies by 2020?

From the conversation we had with President Jonathan and, very importantly, with the minister of trade and investment, it is obvious there is a high priority being put into diversification. Nigeria is one of the world’s largest exporters of oil but has the very possibility of being very competitive in many other products, like agricultural products, mineral products, and also the country can move to the next stage which is manufacturing. Nigeria has great tradition of excellent textiles. So I see the policies of President Jonathan’s cabinet are towards making Nigeria more competitive, making Nigeria a country that can grow faster, and I believe Nigeria can have a lot of success with a DOHA Round that is successful. More importantly, the country is in the process of discussing an agreement with the European Union.

I understand that apart from the African candidates, there are also two Asians vying for the same position of the DG, WTO. Are you concerned that African countries may prefer to back an Asian nominee to supporting your candidacy given the robust relationship between the two continents in terms of trade and aid that flow between them?

At the point, this selection process is not about who buys votes, it is about who is the best candidate, who can bring these negotiations to an end and who can bring the benefits of the DOHA Agenda of development to a successful end and the benefits delivered to Nigeria and to the other countries of the region. There, I think I am the best.