Mexico’s Ambassador to Leave WTO in Major Blow to the Trade Body

(Bloomberg) -- Mexico’s ambassador to the World Trade Organization is preparing to leave his post, according to three officials familiar with his plans, in what could be a significant blow to both the organization and to the Latin American nation’s ability to help shape the rules for global commerce.

Roberto Zapata Barradas, who became Mexico’s main envoy to the WTO in 2017, will soon step down as its permanent representative in Geneva, said the three officials, who asked not to be named because the decision hasn’t been made public.

Zapata declined to comment when contacted by Bloomberg News, and Mexican economy ministry’s media office didn’t immediately provide a comment. The WTO oversees trading regulations and resolves disputes among its 164 members, which include the U.S., China and the European Union.

The move comes as leftist Mexican President Andres Manuel Lopez Obrador’s party is pushing through domestic legislation that will largely shutter the nation’s economy ministry offices to reallocate government resources for social programs. Opponents argue this will leave Mexico without adequate representation to defend itself in economic controversies including trade disputes with the U.S. and cases in the WTO.

The move also threatens to scuttle the WTO’s most promising multilateral trade talks since Zapata is the current chairman of its negotiating group on rules, which is overseeing discussions aimed at eliminating fishery subsidies that contribute to overfishing and overcapacity.

Critical Talks

Zapata’s abrupt departure may delay those negotiations during a critical period, according to the officials. A new negotiating chairman will need to be selected quickly to be able to complete the agreement this year, they said.

The fishery talks are entering their fourth year and remain ensnared in deep disagreement over what role the WTO should play in governing the world’s oceans. The aim is to fulfill a key target of the United Nation’s Sustainable Development Goals by eliminating harmful government fishery subsidies by 2020.

A WTO fisheries deal would be symbolically important for an organization that’s struggling to retain its relevancy in an environment where the world’s top economies brazenly flout the basic rules of trade.

The WTO is facing a separate threat over its appellate body, which carries out its arbitration functions, and could be rendered useless by the end of the year.

“The organization is in deep crisis,” European Trade Commissioner Cecilia Malmstrom said during an event hosted by the French government in Paris on Tuesday. “If the appellate body collapses, which probably it will in December, at least temporarily, we would have no enforcement.”

“And then if you have no rules everyone can do what they want and that would be really, really bad, not least for the smaller and developing countries,” she said.

©2019 Bloomberg L.P.

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