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This Week In Trade

Azevedo Takes Over At WTO, Obama To G20, TPP Intersessionals, CFIUS Smithfield Review

Posted: September 03, 2013

Posted: September 3, 2013

This week started with a new leader at the World Trade Organization. Roberto Azevedo, the longtime Brazilian ambassador to the WTO, formally took over as director-general on Sept. 1. He replaces Pascal Lamy, a former European Union trade commissioner who led the organization for eight years.

Azevedo, who was appointed to a four-year term by the WTO General Council, will take on the major challenge of proving the viability of the 159-member global trading pact primarily by navigating it past the failed Doha round of negotiations. An effort to salvage even a small piece of the embattled agenda in time for a Dec. 3-6 ministerial remains uncertain.

In his welcome message, Azevedo said the 9th ministerial meeting in Bali, Indonesia is a “key priority” and indicated that the choices WTO members make in the coming months “will determine the path we take.”

Azevedo admitted that an outcome in December would only represent a small part of the overall Doha agenda, but he said agreement on the issues that are now being considered -- a new trade facilitation agreement, some agriculture issues and areas of important to developing countries -- will help unblock other areas of the negotiations.

“I believe that a deal can be struck despite the short time we have between now and Bali,” Azevedo said. “I shall do everything I can to see that agreement is reached.”

Azevedo defended the relevance of the multilateral trading system in his message and indicated that the options for its continued success “would be considerably richer and more diverse in the even that negotiations in Bali are successful.”

The new director-general also faces day-to-day challenges in Geneva, such as low staff morale within the WTO Secretariat and the question of how to engage his four new deputy director-generals (Inside U.S. Trade, Aug. 23).

Azevedo will deliver his inaugural speech at a special meeting of the General Council on Sept. 9. At that meeting, General Council Chairman Shahid Bashir, Pakistan's ambassador to the WTO, said he would announce “intensification” of work in preparation for Bali by starting to shape the agenda of the ministerial meeting, including an outcome document, according to a WTO press release.

The G20 leaders' summit in Saint Petersburg, Russia on Sept. 5-7 will be Azevedo's first international appearance and a forum for discussing global trade and economic issues.

President Obama is expected to participate in a number of G20 summit working sessions focused on economic expansion and stability. Among those meetings, he will take part in a working lunch on Sept. 6 where leaders will discuss growth and trade, a senior administration official said during an Aug. 30 White House conference call.

The official did not provide any details on the president's trade priorities for the summit. However, administration officials, who were previewing Obama's trip, struck an optimistic tone for the summit, highlighting that it will be the first meeting since November 2010 that is not dominated by urgent measures to resolve the financial crisis.

Before heading to Russia, Obama will stop in Sweden this week to meet with Prime Minister Fredrik Reinfeldt. The agenda of the two leaders will include discussions on trade and investment, including the Transatlantic Trade and Investment Partnership (TTIP), an administration official said during the call.

Obama also started the week talking trade during a Sept. 2 phone call with Japanese Prime Minister Shinzo Abe. In the discussion between the two leaders, Obama underscored his view that the Trans-Pacific Partnership (TPP) negotiations should be concluded this fall. Both Obama and Abe “agreed to consult closely on the way ahead,” according to a White House readout of the call.

TPP trade ministers, earlier this month, agreed to push for a year-end conclusion to the 12-country trade talks and chief negotiators have scheduled an intense schedule of intersessional meetings this month, some of which will take place this week. The 19th round of TPP negotiations recently concluded on Aug. 30 in Brunei.

Negotiators will hold a meeting to discuss the technical barriers to trade chapter on Sept. 2-5 in Mexico City. The e-commerce chapter will be the subject of a Sept. 3-6 meeting in San Francisco. Also, labor chapter negotiators have already concluded an Aug. 26-29 intersessional meeting in Ottawa.

Closer to home, the U.S. is expected by the end of this week to conclude an investigation into the proposed acquisition of Smithfield, the world's largest pork producer, by Chinese company Shuanghui International.

The 45-day review by the Committee on Foreign Investment in the United States (CFIUS) started on July 24 and represents the second phase of the investigation into the acquisition of the U.S. meat producer. CFIUS opted to extend the process after it concluded its initial 30-day review.

Smithfield entered into a merger agreement on May 29 with Shuanghui International, a Hong Kong based company that is also majority stakeholder of China's largest meat processing company, Henan Shuanghui Investment and Development Co.