7:54 AM Jul 2, 1993

SUTHERLAND TAKES OVER AT GATT

Geneva 2 July (Chakravarthi Raghavan) -- Peter Sutherland, Irish politician, lawyer, banker and director of several transnational European enterprises, took over as Director-General of the General Agreement Thursday and spent his first day meeting senior GATT staff, some key delegates and promoting a new media image about himself and the GATT and its policies.

There is talk of a meeting of the Uruguay Round Trade Negotiations Committee (TNC) being called towards end of July in an effort to re-start the negotiations. A TNC meeting at official-level has been scheduled for 5 July when Sutherland is to be named as Chairman -- in succession to Arthur Dunkel who had occupied it in his personal capacity.

Sutherland has also scheduled a press conference for Monday.

In his press interviews, he has been emphasizing his desire to bring the Uruguay Round process back to Geneva and the GATT, and trying to keep up the pressure on the major industrialized countries and the Tokyo summit of the G7 and the need for the G7 summit to go beyond the vague statements on Uruguay round at the past 4-5 summits.

In interviews before arriving in Geneva, and at the GATT Thursday, Sutherland has been making the point that the Uruguay Round must be concluded this year, that it was not enough for international (presumably meaning G7) leaders "to mouth good intentions about trade" and that the Tokyo summit of the G7 would be a crucial catalyst for rescuing the stalled Uruguay Round Negotiations.

But it remains to be seen in practice how far, the GATT under him, would be a genuine multilateral decision-making process, rather than as in its history so far particularly in the Uruguay Round of promoting an agreement among the majors, then getting it 'sold' to some leading industrial countries and in concentric circles of consultations ultimately to the developing world -- the GATT's version of the Marxist-Leninist 'democratic centralism' which first became centralized democracy and very quickly resulted in disappearance of democracy.

In asserting his 'independence' from the US and EC so to say, Sutherland in his press interviews also castigated the G7 and said it was not enough for them to make general statements about trade reform, as they had in the past five years, "and that we need a detailed communique that allows negotiators to move in to a multilateral treaty".

To the Financial Times, which during his predecessors tenure was identified by many as the "GATT's official media" in promoting European transnational business interests, Sutherland said he was not a magician but a facilitator and "there is no point in lecturing about banging heads together if the basic will is not there."

Before his election, the EC and US had explained the choice of Sutherland in terms of his leadership capacity as a person who could bang their heads together and produce results.

But in his interview to the International Herald Tribune, seen generally as more pro-US, Sutherland said he would be blunt and outspoken and "I am going to say it as it is and shot from the hip...I am taking this position (as GATT DG) having been led to believe that world leaders intended to conclude the Uruguay Round of trade talks by Dec 15...For the target not to be utopian, we need a market access agreement at the Tokyo summit."

However, some G7 sources say that no 'market access' agreement or breakthrough in the talks is likely at Tokyo, given the caretaker nature of the Miyazawa regime which is in the midst of an election campaign that could well end in a defeat for the ruling party.

However, Japanese diplomats appear to have been assuring developing country colleagues and others that in terms of market access, Japan (run by its official bureaucracy) would be quite ready to clinch an agreement, but that the problem lay in transatlantic differences.

The only matter on which the Japanese technocrats can't deliver in the pre-election period is on 'rice' -- a highly political issue in Japan. But it is not only Japan that is sticky on some agriculture issues. Korea, Switzerland, the Nordics and others too have their own particular problems and want changes in the agricultural text and the US-EC Blair House accord.

However, after the July 16 Japanese elections, and the formation of a new government, the renewal of the Geneva process for the Uruguay Round would provide the necessary smokescreen behind which the Quad can try to agree among themselves and then get the others to fall in line.

There are many GATT diplomats who discount media reports on either side about the US-EC differences on the market access package, saying that it is all just a smokescreen by negotiators to fool their domestic lobbies and preventing them from coalescing at this stage. For example, they said, the differences between the US and EC over cutting tariffs on textiles is not really so much. Exchange rate variations in a month often have greater price effects, they note.

And while the EC is "pretending" that it is negotiating on behalf of developing countries to get US to cut tariffs, unless the MFA-quota regime is liberalised much more, to keep pace with the tariff cuts, the agreements between the two, even when multilateralized at the GATT, would merely enable the two to get a greater share of their textiles and clothing trade -- since the quotas would keep out the more competitive imports from developing countries. On so-called 'sensitive' and 'very sensitive' products, EC growth rates on import quotas from the developing world are said to be much lower than that of the US, almost nominal only.

Another negative element is France, whose Prime Minister Balladur has been even more vehement than his socialist predecessors on a range of issues -- including the Blair House accord in agriculture and textiles etc -- all seen as attempts to block for the moment any accord -- the latest being what was described as an ultimatum to the US that unless the US reversed its steel countervailing actions, no agreement was possible on Uruguay Round at Tokyo.

However, EC Commission officials too have been reportedly at pains to giving the impression to the other negotiators in Geneva that the Commission, at the final point, "deliver" and the French objections would not stand in the way.

Going by the absolute 'no' with which the French reacted to the oilseeds settlement, and ultimately allowed it to go through, the EC Commission officials may have a point.

But if the average person or even businesses in developing and developed countries seem to get confusing signals out of all this and want reassurances, perhaps they might need to consult the stars under which the Uruguay Round was launched and look at the astrological columns in most weekly media that provide Delphic oracle like prognosis ("The Greeks the Romans shall conquer").

At the moment, one key negotiator said recently, the chances of a successful conclusion are fifty-fifty and perhaps better than a few months before.

But others are not so certain, noting the political realities (stagnation and recession and unemployment in Europe and the major industrial countries) and the experiences of the past which suggest that trade liberalization in such conditions could be a text-book remedy but not one politically feasible.