Roberto Azevêdo, director-general of the World Trade Organization, has been a proponent of international cooperation, putting him at odds with the Trump administration.
The head of the organization charged with bringing a semblance of order to international trade relations resigned unexpectedly Thursday, adding another element of uncertainty to commerce in the midst of the coronavirus pandemic and escalating trade conflicts.
Roberto Azevêdo, a career Brazilian diplomat, resigned as the director-general of the World Trade Organization effective Aug. 31, the Geneva-based organization said. His second four-year term was not scheduled to end until September 2021.
The W.T.O.’s operations have been crippled since late last year as a result of actions by the Trump administration, which has refused to approve nominees to fill vacancies on a crucial appeals panel that rules on trade disputes.
With Mr. Azevêdo’s departure, which caught officials in Geneva and Brussels by surprise, the organization will lose an advocate of open trade and international cooperation whose views clashed with President Trump’s preference for bilateral power politics.
His resignation also leaves a leadership vacuum at a perilous moment for the world economy.
The pandemic “is the worst shock to global trade that has happened in our lifetimes,” said Josh Lipsky, director of the global business and economics program at the Atlantic Council, a research organization in Washington. “To lose the leader of the W.T.O. is a serious blow. There is a broken global trading system, and it needs leadership to fix it.”
Mr. Azevêdo, 62, did not link his departure to tensions with the Trump administration. Rather, he said he wanted to give W.T.O. members a head start on choosing a successor, which is often a difficult process.
The coronavirus pandemic has brought complex negotiations on issues such as fishing subsidies to a standstill and made it unlikely that agreements would be reached until next year. A debate at the same time about the next W.T.O. director would interfere with attempts to overcome trade disputes, Mr. Azevêdo said.
“The selection process would be a distraction from — or worse, a disruption to — our desired outcomes,” he said during an online meeting with W.T.O. members. “We would be spending valuable time on a politically charged process that has proved divisive in the past.”
World trade was already declining because of Mr. Trump’s trade wars with Europe and China, and has plunged further since the pandemic brought economic activity in many countries to a standstill. The W.T.O. has predicted that global trade could fall by one-third, a decline not seen since the Great Depression in the 1930s.
Recently Mr. Azevêdo has expressed frustration that the United States, Europe, China and other large countries were not coordinating their response to the coronavirus emergency. Mr. Trump has recently stepped up his criticism of China.
“Either we shape up and begin to talk to each other and find common solutions or we are going to pay a heavy price,” Mr. Azevêdo told CNN in April.
Robert Lighthizer, the United States’ top trade official, was conciliatory Thursday. “Despite the many shortcomings of the W.T.O., Roberto has led the institution with grace and a steady hand,” Mr. Lighthizer said in a statement. “He will be difficult to replace.”
Mr. Azevêdo, who was previously a top trade negotiator for Brazil and has worked in Geneva since 1997, also cited personal reasons for his departure. The W.T.O. makes decisions by consensus, which means even one of the organization’s 164 members can stymie progress. The director-general must find a way to thread conflicting national interests and reach accord, a laborious and exhausting task.
Mr. Azevêdo said Thursday that, while he had no serious health problem, he recently had knee surgery. Between that and the lockdown, he said, “I have had more time than usual for reflection.”
In his first week he withdrew from the unratified 12-nation Trans-Pacific Partnership. He prepared to pull out of the U.S.-Korea Free Trade Agreement (Korus) and the North American Free Trade Agreement. Earlier this year he imposed steep tariffs on imports of steel and aluminum, using a little-used national security law, and threatened the same for autos.
Today, Korus and Nafta have been replaced by updated agreements(one not yet ratified) that look much like the originals. South Korea accepted quotas on steel. Mexico and Canada agreed to higher wages, North American content requirements and quotas for autos.
These represent a step back from free trade toward managed trade, but they will have little practical effect: The limits on how many cars Mexico and Canada can ship duty-free to the U.S., for example, exceed current shipments. Mr. Trump hasn’t stopped threatening auto tariffs, but for now his officials have elected instead to seek broader tariff reductions with Japan and the European Union.
.. Meanwhile, the U.S. trade deficit that incenses Mr. Trump has grown during his presidency, especially with China and Mexico, as a strong American economy sucks in imports. His exhortations to manufacturers to bring jobs back to the U.S. have largely fallen on deaf ears.