SUTHERLAND NAMED AS GATT DG

6:32 AM Jun 10, 1993

SUTHERLAND NAMED AS GATT DG
Geneva 9 June (TWN) -- The GATT CONTACTING PARTIES appointed by consensus Wednesday evening the EC-sponsored Irishman, Peter Sutherland as Director-General of the GATT and approved the terms and conditions of his service.

Strictly, Sutherland's appointment, emoluments, contract etc will be as the Executive Director of the ICITO (Interim Committee for International Trade Organization), the body created by the UN in 1948 as an interim measure and has provided a legal status for the provisional GATT treaty and its secretariat. The ICITO is set to meet on Thursday morning when the CPs choice will be 'formalised'.

The CPs also decided on creating a third post of Deputy Director-General in addition to the current two posts, one of which has been vacant for some time while the second (held by a US national Carlyle) is falling vacant at the end of the month.

Though the decision on the third post by the CPs was made out by some as a compromise to enable a consensus election against a Latin American nominee, in fact the idea of creating a third post had been more or less settled very early in the consultation process, even before the Sutherland name figured, and is aimed at strengthening GATT's research capabilities in the areas of its competence and the expanding GATT activities like Trips, Services etc (particularly after the Uruguay Round is concluded).

While it was being mentioned that this post would go to someone from the Latin American region (one Latin diplomat remarked that there were probably about ten aspirants, including several representing their country before the GATT), the oral statement by Zutshi at the CPs meeting was a kind of 'job description'-- requiring expertise and credentials in international trade policy economics and related areas.

Under a 1986 decision, the GATT Director-General is to appoint the deputies in consultations with CPs, and while there was much corridor gossip at the GATT about 'deals' already stuck, the "consultation process" could be as painful as that over the choice of a DG, one of the diplomats noted.

Sutherland is to serve for a two-year term initially to be tacitly renewed for a further period of four years, and with the contract terminable from either side by a six-month notice.

The Chairman of CPs, Amb. Balkrishna Zutshi of India, told newsmen after the meeting that the initial two-year term was related to possible institutional changes that might result from the conclusion of the Uruguay Round.

Apart from the 'remuneration package' fixed by the CPs, which would involve an additional 28000 dollars over and above that now given to Dunkel, all other terms and conditions of service would be governed by the staff regulations of the United Nations as appropriate," Zutshi said.

Though the emoluments are not being equated to that of the Fund and the Bank, a hidden tag will be when the GATT's new institutional arrangement (whether the Europeans' MTO or the US GATT-II) comes into being with relationships with the IMF and the Bank (but not the UN) written into the texts, the emoluments of the DG and of other staff would be then upgraded, without too much public outcry that Sutherland's initial interviews gave rise to, one of the diplomats later said.

Zutshi was reminded about GATT Director-General Arthur Dunkel's views about GATT's real clients being the business enterprises and asked what conditions, if any, had been set by the CPs over Sutherland divesting himself of his extensive private holdings and interests in banking, aviation and other enterprises, and in all of which decisions or compromises he might suggest for ending the Uruguay Round, such as financial services and state regulations, would have an effect on the private business sectors with which he was involved.

Zutshi said that the UN staff regulations provide for a code of conduct on all these matters and it would be applicable to Sutherland.

Other UN sources noted however that this would probably be the first time that a person with such private business interests will be coming into the UN system and the rules do not have specific provisions about divestiture etc. Though there are provisions about not engaging in private business or activities contrary to the aims of the organization, there is nothing like the US governmental regulations about 'conflict of interest'.

In other responses, Zutshi was asked about the Uruguay Round and whether in his talks with Sutherland the latter had said he was fully committed to the Dunkel text.

Zutshi said this was not a matter for negotiations between the Chairman of the GATT CPs and the future Director-General, "but a matter between contracting parties" and the pace of resumption of the Uruguay Round and outcome would be determined by other events, including the Group of 7 summit in Tokyo next month.

Earlier, as the CPs meeting was still going on, and within minutes of the election and its announcement, the GATT secretariat issued a statement by Sutherland, in which he paid tributes to the contribution of Arthur Dunkel as GATT DG over the last 13 years and to his rival in the race, Julio Lacarte and added: "I wish him (Lacarte) well and look forward to working with him in the future."

Asked about this and whether anything was decided in the 'consultations' he had conducted about a possible GATT role for Lacarte, Zutshi (who became aware of the Sutherland statement and this portion, just on the eve of his talking to newsmen) said no such thing had been decided nor raised in his consultations.

In his statement, Sutherland spoke of his immediate priority being "to help participants of the Uruguay Round secure a quick, comprehensive and far-reaching conclusion to their negotiations".

In this regard, he said, the G7 Tokyo meeting "will be crucial - but we will need deeds, not words" and added: "Thereafter, the sooner we can get back to a multilateral process in Geneva, the better".

Sutherland also spoke of the "extraordinary responsibility and enormous personal challenge" in the job, adding: "In many ways the GATT system holds the key to future world prosperity and a way out of the pain of unemployment which many nations face today. It is a multilateral system looking after the interests of countries, large and small, developed and developing. None of the demands of my new job can be more important than safeguarding every one of the varying interests represented among GATT's 111 members."

At the CPs meeting a number of countries took the floor to pay tributes to Dunkel and the new incumbent and Lacarte and to Zutshi for the way he had conducted the consultations.

El Salvador's Mme Leonara de Sola de Saurel, speaking for the GRULA countries, said the group had withdrawn the candidature of Lacarte to enable a decision by consensus in the "best traditions of GATT" and then went on to flag the concerns of the GRULA group (as of others) and hoped the interests of GRULA countries would be taken into account in the conclusion of the Round. She also made a reference to the GATT principles of free trade and the talk of managed trade and the threat of unilateralism.

"If GATT is to have any meaningful role, it has to evolve in a way that reflects the changes which are taking place in the pattern of international trade...faced with a fait accompli, our countries will have to react to matters which are vital to the future," she declared.

Among other speakers, Tanzania's Amir Jamal spoke of Lacarte's "historical service" in allowing his name to be put forward as a candidate, regretted that the major trading countries could not see their way "by taking the historical step" of rallying behind a candidate like Lacarte, and acknowledging the overwhelming consensus that had surfaced in favour of Sutherland.

Jamal then went on to express the hope that there would be "unsparing transparency in the entire process" (of the Round) and, more than just giving the benefit of doubt, a staunch upholding of the Punta del Este mandate in ensuring special and differential treatment and needs of the least developed countries whose number in the GATT had nearly doubled over the last 15 years, even as some of the more advanced developing countries had reached the critical mass of a spring-board from which to launch forth with vigour to take a larger share of world trade.

"We do not make apologies for expressing our hope that the very special, critical needs of the most under-developed, bearing in mind the state of their respective political autonomy, will not be lost to those with so much leverage, as we finally assess the outcome of the Uruguay Round under the leadership of the new Director-General," Jamal added.