Lamy, who will leave the WTO after two terms in August 2014, said it was up to the organization's member countries to decide on the criteria for selecting the new WTO chief who will oversee unfinished negotiations over trade liberalization.

Emerging market countries will want to see one of their own in charge of the Geneva-based trading club after the top jobs at the IMF and the World Bank went to a European and an American following a decades old tradition criticized as being out of line with the new world order.

Lamy said the selection procedure at the WTO is different.

"I don't think this is a geographic rotation system," Lamy told Reuters in an interview on the sidelines of the semi-annual International Monetary Fund and World Bank meetings in Tokyo.

"There is nothing in the rules of the WTO that say that if somebody came from this country, then the next one should come from this country. I think what really matters is that it's not a diplomatic game. It's a headhunting game."

Formal nominations are not due until December, but trade diplomats are already assessing chances and gathering names.

Two candidates have formally declared their interest: Ghana's former trade minister Alan Kyerematen and New Zealand's current trade minister Tim Groser. Trade diplomats expect more candidates to emerge.

Asked about Ukraine's decision to tell its trading partners it wanted to raise maximum tariffs on hundreds of imported goods, a move criticized as a threat to open trade, Lamy said the WTO verdict would depend on what concessions Ukraine was ready to offer in return.

He said WTO rules allowed a member to take such steps if it offered to reduce protection on other products and ultimately it was a matter of negotiations between Ukraine and its trading partners.

"The spirit is that if you make your economy less open on one item, you have to compensate by opening (the) economy on another item. So it is the process of negotiation," he said.

"I wouldn't pre-qualify this. If Ukraine wants to increase its protection on some items and decreases its protection on other items, we have to look at the balance before making a judgment."

Ukraine has expressed its intention to raise tariff ceilings without any precise number.

The move drew criticism from at least 19 nations arguing it could undermine the very basis of the $18 trillion global trade system.

On Lamy's watch as head of the WTO, he has witnessed the stalling of decade-long talks on trade liberalization known as the Doha Round. But he said he saw promising signs that some progress was possible and that he was "cautiously optimistic" now as opposed to "cautiously pessimistic" a year ago.

"I think there is a bit more momentum. And it took a bit of time for the members to realize that the big deal was not available in a short time and to realize that, if that was the situation, they nevertheless had to try and move trade opening forward," he said.

"Especially in a situation where we know that opening more trade is a low-cost solution to stimulating growth. So there is also a sort of crisis exit component in this, let's say, new attitude."

(Editing by Tomasz Janowski and Neil Fullick)

• A Permanent Economic Emergency