7:09 AM Mar 2, 1995

SALINAS WITHDRAWAL WON'T SHOE-IN RUGGIERO

Geneva 2 Mar (Chakravarthi Raghavan) -- The withdrawal by former Mexican President Carlos Salinas of his candidacy for the top job at the World Trade Organization may favour the prospects for the European Union's nominee, Renato Ruggiero of Italy, but the latter's consensus election is by no means certain, trade diplomats said Thursday.

The Salinas withdrawal and whether this will break the impasse and enable a consensus choice would figure at an informal meeting Friday morning of key delegations, convened by the WTO General Council Chair, Amb. Kesavapani of Singapore. A Heads of Delegations meeting, in what is usually described in the GATT/WTO parlance as a 'transparency exercise' is set for Friday evening.

Though some of Salinas's supporters have suggested the postponement of these meetings to give their capitals time for reflexion, Kesavapani was reported to be going ahead, atleast with the morning meeting with key delegations, in the view that there is need to keep the pressure.

Europeans were pleased by the Salinas's withdrawal announcement -- but were at pains to hide their 'glee' -- and think in this situation US and other supporters of Salinas would switch to Ruggiero and the Korean candidacy would be withdrawn to ensure Ruggiero's consensus choice.

But there were some who said this scenario was by no means certain and the problem will not be resolved by the Geneva "power brokers".

Some trade diplomats said that the United States does not favour the 65-year old former Italian Trade Minister Ruggiero, and that its opposition had not softened even after the withdrawal of Salinas.

While this situation could change, and Washington might reassess its position and options, the idea that by keeping up the heat and pressure for a decision and this would result in Ruggiero's choice by consensus (as the Europeans seem to think), would be unrealistic some of the diplomats said.

But with the US (and the Europeans) also said to be not favouring the Asian candidate, South Korea's Kim Chul-Su, even as a second choice, it was not clear what the United States might want to do in terms of a choice "among the three contenders" (as was being affirmed by everyone till now) or whether the United States might push for a new candidate.

A name that was being mentioned by some Latin Americans in this connection is that of Uruguay's former foreign minister, Enrique Iglesias, now heading the Inter-American Development Bank, and whose economic outlook has been flexible enough to attract US support.

Iglesias is no stranger to this multilateral institutional world. He headed in the 1970s the UN Regional Commission at Santiago, espousing the Prebisch Dependencia theories, but moved away afterwards to espouse neo-liberalism. As his country's foreign minister, he presided over the Punta del Este meeting which launched the Uruguay Round, and his name has often cropped up over the last decade and more in connection with several other such high posts. But the chances of his candidacy clicking, and getting the support of the EU and other trading nations outside the Latin American region, and that in time before the March 15 deadline, seems rather remote.

The Friday meeting was set by the WTO General Council Chair, Amb. Kesavapani of Singapore -- after the last 'straw poll' in the week of 13 February had shown 57 of the contracting parties behind Ruggiero, 38 favouring the South Korean candidate Kim Chul-Su and 37 favouring Salinas. The hope then was that "reflection" in capitals on the situation would break the impasse.

Though some of the countries who had been backing Salinas, including the United States, would appear to have favoured putting off for a few days the renewed consultations by Kesavapani, indications till Thursday noon was that Kesavapani would go ahead with the meeting, atleast the consultations with the small group on Friday morning, but that depending on that meeting's outcome, the informal delegations meeting in the evening might be put off, some diplomats suggested.

The announcement by Salinas of the withdrawal of his candidacy was made Wednesday night in Mexico City, following the arrest of his brother Raul Salinas on charges of masterminding the assassination last September of the ruling party Secretary-General Fransisco Ruiz Massieu.

Salinas himself made no reference to his brother's arrest or the earlier demand of an all party parliamentary group that all functionaries of the Salinas administration, including Salinas himself, should be questioned over the assassination in March of the Presidential candidate Luis Colosio.

But these two developments, coming on top of the Mexican economic crisis and its impact on the Salinas credo of a successful neo-liberal model of policy reform promoted by him in Mexico, had already damaged his chances and the withdrawal announcement was merely seen as a way out for his principal backer, the Clinton administration in Washington.

Several diplomats said Thursday morning that their capitals would need time for reflexion and that informal meetings convened for Friday by the Chairman of the General Council of the World Trade Organization, Amb. Kesavapani of Singapore, would be unable to take any decisions.

Several of the Latin Americans, who have been standing behind Salinas's candidacy (even when it was becoming clear over the last few weeks that it was not viable after the Mexican economic crisis), said that they would need some time for "reflexion" on the new situation.

Kesavapani, and the others actively involved, have all been stressing the need for ending the impasse and making a choice before 15 March, when Peter Sutherland is due to lay down his office.

In the face of the impasse, until Salinas's announcement of withdrawal, a number of Third World delegates have been favouring the view that Sutherland should be asked to continue and named for a two-year term.

Several of them seemed to favour this on Thursday morning too.

The Europeans don't favour his being asked to continue -- though it has not been clear whether they are opposed to Sutherland continuance in the job temporarily for ad hoc periods, a view shared by many others too, or they are opposed to even a new fixed two-year term that would "cool off" the controversies surrounding all the candidacies.

The Europeans who seem to have decided that as of right the WTO job should go to their candidate (just as the Americans decide on the World Bank President, and the Europeans the IMF head) seem to feel that if the issue is not clinched now at start, the developing world might come back with a more viable candidate and insist on it.

Developing nations say that a candidate of their choice, around whom most of them could have joined was the former Brazilian Representative to GATT, Rubens Ricupero, who as chairman of the informal developing country group had shown his capacity both to promote compromises and to further the interests of the South. But the Ricupero candidacy was damaged by his statement, as the Finance Minister of Brazil, about having highlighted statistical data showing the successes of the Brazilian economic programme and downplayed the deficiencies.

Though it would be difficult to name a single country minister or official, or of any international organization, (including the OECD, IMF, World Bank, GATT etc) that do not routinely indulge in this (but don't confess it), the way Ricupero's statement went out (without his being aware) over the Brazilian TV during the election forced him to quit office and withdraw his own candidacy.

But the developing nations at the GATT/WTO who have never been united on the substantive trade issues ( with capitals and their diplomats here generally lost in mutual rivalries), have failed even on finding an equally outstanding candidate and field him.