7:50 AM Jan 11, 1995

WTO HEAD RACE NOW WIDE OPEN

Geneva 10 Jan (Chakravarthi Raghavan) -- Trade negotiators, back at their desks from the year-end holidays, were engaged in several informal bilateral and plurilateral consultations and 'horse-trading', to complete some of their unfinished tasks of last year to get the World Trade Organization going.

For all the noice made through 1994 about the new and powerful body, the WTO came into being on 1 January 1995 -- as one trade diplomat put it "very quietly, almost like a thief in the night".

But it has no "lease" on its house, has no international legal personality of its own in the host-country (which is yet to become a member too), the staff that service it are all still that of the old GATT (and thus of the UN and its ICITO), and none of its intergovernmental bodies have been constituted.

The unfinished tasks of trade diplomats to get the WTO going include the naming of trade diplomats to head the various bodies of the WTO -- the General Council, the Goods Council, the Services Council and the TRIPs Council, the Textile Monitoring Body, and other subordinate bodies -- all to be completed well in time for the first meeting of the General Council set for 31 January.

Equally important is the job of naming a head for the GATT/WTO, though the current deadline for this is 15 March.

Peter Sutherland as the Director-General of the GATT 1947 is holding charge as the WTO head (as provided in Art XVI:2 of the WTO agreement), till 15 March, pending the selection/election of a successor by consensus.

The Chairman of the GATT CPs, Andras Szepesi of Hungary (after an informal heads of delegations meeting of the CPs), "requested" Sutherland at year end to continue in office till 15 March, and issued a press statement that Sutherland had agreed and will be the "First Director-General of the World Trade Organization".

(Szepesi himself has been reassigned by his government and has been asked by Budapest to return, but at the intervention of the EC Commission, has been kept on here temporarily by Budapest. Rumours are he will be named to a WTO job, perhaps as chairman of the Textile Monitoring Body.)

Technically, under Art VI:2 of the WTO Agreement, "the Ministerial Conference shall appoint the Director-General and adopt regulations setting out the powers, duties and conditions of service and term of office of the Director-General".

And while, under Art. IV:2, the General Council of the WTO can exercise all the functions of the Ministerial Conference in between its sessions, it is arguable whether the General Council before the first meeting of the Ministerial Conference can in fact discharge this particular responsibility under Art VI:2.

Sutherland had been announcing his desire to quit by year-end so often, and so repeatedly (even though technically his contract runs till July and had not been formally terminated, nor any notice of termination given), that the CP "asking" him at year end to continue till 15 March and his acceptance was seen as a necessary public relations exercise -- or, as a junior GATT official cynically remarked in private, a massive ego-massaging job for both the GATT head and the CPs.

Among the held-over problems, that of the constitution and membership of the TMB is still contentious and deadlocked, with the EU holding out for (and insisting on a membership patter of five importing countries, five exporting countries and an 'independent' Chairman).

The TMB is critical for the administration and monitoring of the implementation of the Textiles and Clothing Agreement.

At the final session of the WTO's Preparatory Committee in December, a number of developing countries -- including Hong Kong, Asean and India -- expressed their concern and insisted there could be no piece-meal implementation of the WTO and its agreements.

But whether they will hold up everything else, and prevent even the General Council of the WTO coming into being, until the TMB problem is solved, or will selectively block the constitution of other bodies is not clear. But without a solution to the TMB, it is certain that constitution of some other bodies (of greater interest to the North, particularly Europe and US) are likely to be blocked.

On the WTO head-hunting front, the candidacy of Mexico's former President Salinas appears to have received a serious setback in the light of the developments in Mexico -- with the present administration blaming the Salinas administration for the problems, and the opposition filing charges against Salinas and demanding withdrawal of support.

Of the other two candidates in the running, South Korea's Kim Chul-SU, who was dropped before xmas as Trade Minister (an action 'described' in some news reports as 'dismissed' from office, thus implying a setback for his candidacy) was back in running, and that vigorously, with the announcement in Seoul that his government fully backed his candidacy and he was now South Korea's "International Trade ambassador at large". Kim has been quoted in Seoul as saying that he is now gathering more support than before.

The third candidate, the EU-backed former Italian Minister Renato Ruggiero, has been claiming that he has a majority of the CPs backing him, but that is seen to be essentially confined to the EU and those in its periphery or zone of influence -- the various European, Mediterranean and the ACP countries all having preferential arrangements.

In any event, the choice has to be by consensus.

Salinas himself is now out in Asia seeking support, and reportedly is due to visit Japan too.

US Commerce Secretary Ron Brown came out Tuesday again in full support of the Salinas candidacy.

But Latin American sources in Geneva said that while the Group has not so far met (after 15 December last) to assess the situation, members of the group remain considerably divided now over the Salinas candidacy.

Some Latin diplomats privately said that the Salinas candidacy has received a serious blow, and he could no longer be pushed by the Latins as a credible candidate.

However, many of them stress that any erosion of support for Salinas would not mean the support going to Ruggiero.

The Brown endorsement Tuesday night was interpreted in Geneva by other trade officials as a sign that the US cannot back down and support Ruggiero even if and when Salinas quits.

In such a situation, the diplomats envisage a new 'head-hunt', but this time with a team of 'wise-men' (diplomats of a few key countries) being asked to look around and choose and recommend a name for consensus adoption.

New Zealand is again known to be promoting the candidacy of its Minister for Commerce and Foreign Trade Negotiations, Philip Burden, as a 'dark-horse candidate' -- on the basis that he is from a small industrialized country and thus should be acceptable to all.

But New Zealand during the Uruguay Round negotiations was often in the US camp, not merely as a Cairns Group member over agriculture, a major export sector of interest to it, but on other issues too -- like TRIPs and Services etc, and ranged against developing countries.

There is even some talk that Sutherland himself should be requested to continue for a year or more. If he is willing, it may be acceptable to the US, and many developing countries too (who found him playing 'fair' with them during the negotiations). But whether this will fly remains to be seen too.