8:46 AM Mar 1, 1995

MEXICAN DEVELOPMENTS SETBACK SALINAS?

Geneva 1 Mar (Chakravarthi Raghavan) -- The Chairman of the General Council of the World Trade Organization, Amb. Kesavapani of Singapore, has convened an informal heads of delegations meeting for Friday afternoon on the selection of a successor to WTO head, Peter Sutherland.

He is due to hold consultations earlier in the day with a small group of key countries.

The latest political developments in Mexico are generally seen here as further shattering the prospects for former Mexican President Carlos Salinas.

On Tuesday came the news of the arrest of ex-President Carlos Salinas's brother over the assassination last September of the ruling Institutional Revolutionary Party Secretary-General Francisco Ruiz Massieu and, earlier, news that an all-party Parliamentary Commission giving approval for interrogation of all functionaries, reaching right up to Salinas himself, connected with the earlier assassination in March of the Presidential candidate Luis Colosio.

Trade diplomats in Geneva were privately wondering whether these developments will make it easier or harder for the United States, which has been backing Salinas, to back away from Salinas in favour of the EU nominee Renato Ruggiero.

And with Salinas himself reported to have given a TV interview criticising his successor President Zedillo's peso-devaluation decision in December and blaming the current crisis on those policies, it is even less clear whether the Mexican government of Zedillo, which has already been distancing itself from Salinas and breaking away from the past, will continue to press the candidacy of Salinas.

After consultations last week, which showed a continued impasse among the three candidates in the WTO race -- Salinas, Ruggiero and the Korean KIM Chul-Su, Kesavapani suggested reflexion in capitals and among delegations before the meeting he has now set for Friday.

Since then (and before the latest Mexican developments) there have been some contradictory signals and statements from the US. The US Representative to WTO, Amb. Booth Gardner suggested withdrawal of all three candidates to facilitate a consensus choice, only to have this repudiated by the US Trade Representative Mickey Kantor.

This was followed by Commerce Secretary Ron Brown (in Brussels for the G-7 information super-highway meeting) reiterating Washington's continued support for Salinas, and vice-President Al Gore calling for a quick solution to the impasse out of the three candidates in the running. The Gore remark was interpreted as implying Washington's willingness to give up Salinas and settle for Ruggiero. Subsequent media reports quoted Kantor as still saying Salinas would be a good candidate.

While the latest political developments in Mexico should normally result in the US either giving up its backing for Salinas, or getting him or Mexico to get his name out, given the close involvement of the Clinton administration in the Mexican economic crisis and its previous backing for Salinas, Washington has also to weigh the consequences in its own domestic politics.

Many trade diplomats think though that perhaps at Friday's meetings there will be an agreement in terms of asking countries to indicate a second preference choice -- which many expect would increase the lead of Renato Ruggiero who at last informal head count commanded just a bare majority of 57.

If the second preference choices do result in a very large backing for Ruggiero, it is then expected that informally his name could be suggested by Kesavapani as the one most likely to get consensus and that the others will withdraw, enabling the election of a successor by 15 March.

But even if all this works out, the 65-year old Ruggiero will not bring to the job the kind of enthusiastic support from the general membership and, would still need to prove his ability to quickly get a grip both on the policy issues as well on the WTO administrative machinery.

But despite all the talk of the need for leadership and vision at the head of the secretariat, the WTO agreement in fact give little scope and what may be needed now is some quiet backroom work to get the machinery of the WTO functioning and the various agreements working as intended.