LEARNING CURVE IS QUITE STEEP IN GATT

6:32 AM Jun 10, 1993

LEARNING CURVE IS QUITE STEEP IN GATT
Geneva 10 Jun (Chakravarthi Raghavan) -- A favourite comment among diplomats, officials and newsmen milling around the GATT premises this week, as a new Director-General was being named, was that "the GATT would never be the same again".

The reference was to the difficulties that the European Community and the United States encountered in putting through their deals via the GATT official consultation process -- a practice which had grown up in the days when GATT had a limited membership and the industrialized countries ran it pretty much as they chose.

From a 20 odd countries in 1949, the GATT has now increased to 111 and, 84 of this 111 are now developing countries and account for 34 percent of the "GATT-regulated" world trade, that is excluding the intra-trade of the EC member-states which under the EC Single Act is internally "free".

While ultimately their view prevailed and the candidate chosen by them, Peter Sutherland -- 47-year old Irish politician, lawyer and former EC Competition Commissioner and private banker -- was at last elected by consensus, the situation could easily have gone out of hand because of the Brussels-Washington view (where the two top trade officials, Leon Brittan and Mickey Kantor, had little practical knowledge of the GATT and its ways) reflected in their private comments and media reports that the two had only to decide and the rest of the world will bow.

One active Third World diplomat said that the consensus was not due to the 'power' of the US and EC but, as everyone acknowledged at the meeting, was achieved because of the skill, and transparency and fairness with which the CPs Chairman, Amb. Balkrishna Zutshi of India, had conducted the consultations.

With a more viable candidate, of stature and reputation for evocating broader Southern concerns, with knowledge of trade and GATT, but not too involved in the daily nitty-gritty of negotiations for his country (as Julio Lacarte had been), the result could have gone the other way and Sutherland might not have made it, the diplomat who spoke on condition of anonymity said.

While the weight of the developing world and the need not to take its views or votes for granted figured for a while, this need not necessarily be the case on the substantive issues where the developing countries are really competing against each other for the markets of the developed and have been unable to overcome their weaknesses and unite inside the GATT, he noted.

Another diplomat said that in matters like elections etc, ambassadors of countries often had much greater leeway than many imagined and could even easily take things to the brink as, at one stage, the selection process seemed likely to be, given the arrogance with which Brussels approached the issue.

However, for the developing world's interests to prevail or atleast to be taken into account, capitals would have to take a firmer role on substantive issues and be prepared to stand up -- whether in the green room or any other consultations and negotiations.

"There is no use of diplomats of the Third World complaining or voicing their worries of a US-EC deal on Uruguay Round being pushed on them, when they themselves go on sending appeals ad nauseum, almost giving a carte blanche, to the two to settle their differences and conclude the Round, and then say the deal might go against them," he said.

"The place to block it would be on substance in the consultations, where often not only do Third World countries not support each other visavis the North, but quite easily allow themselves to be used to isolate those defending their country-interests, even if no interests of the South as a whole are jeopardised or of their own countries," the diplomat said, adding on this the capitals and policy-makers and decision-makers there have a major responsibility and mere rhetoric, whether at G77 or smaller meetings, would not suffice.

The new Director-General, to take office in July, has many qualifications listed in his curriculum vitae. His supporters trying to present a positive image to sceptic newsmen have been saying that as a politician he is media-conscious, a view he himself seems to acknowledge in published interviews.

But this could merely mean someone trying to grab headlines rather than making information more easily available and making the processes more transparent (for the public) and could be even more willing to "manage" information via the press office, as other observers are quick to point out.

Sutherland demonstrated his media-consciousness soon after he was chosen by the US and EC -- in various interviews to the British media and conversations with journalists.

This soon landed his candidacy into trouble and, after a visit to Geneva to meet Amb. Balkrishna Zutshi of India, Chairman of the CPs, he kept away from the media for a while.

But he was clearly back in business Wednesday. Within minutes of his election, the GATT press office issued to the press a statement from Sutherland -- which at the least, even in these days of fast communications and processing, must have been conveyed from Dublin to Geneva a couple of hours before.

He was also available, and talking on the phone, to mediamen (particularly western media read in Brussels or the GATT in Geneva) who reached him.

According to the Wall Street Journal, speaking on the phone, he quickly raced through the subject of east Europe and implications of changes there (incidentally one on which Dunkel too had been quite eloquent in speeches), emphasizing his own "political independence", but suggesting by his answers his "pragmatic streak".

The WSJ also said Sutherland did not want to elaborate on changes he means to bring to GATT, but, aware he could be misunderstood, as saying "I don't want you to think I am a megalomaniac".

It is clear, the WSJ report says, Sutherland wants to do things, even if he won't say exactly what right now. "Rhetoric will no longer suffice" (of political statements relating to the Uruguay Round) and making the "right general noises" isn't enough.

The WSJ report then goes on to give some (Sutherland) rhetoric "Trade defines relationship between peoples...and the development of the Uruguay Round is the defining moment for the latter part of the century. The world is on a knife-edge". Developing countries are opening their economies, the East-West divide, which provided some stability, is gone. Industrial countries need to open their economies..."I'm very concerned about protectionism", but nevertheless aware of concerns about negotiating away jobs to distant lands and structural changes in industrialized countries cutting jobs which may never be replaced.

Soon after Wednesday's meeting, and before the WSJ report appeared, a diplomat from a key Third World country remarked that the learning curve in the GATT was "quite steep" and Sutherland, with no real multilateral diplomatic experience or even of trade policy issues or the technical details of the GATT, and with the demands of the final stages of the Uruguay Round on him, may find the curve steeper than normal.

In the election process, there was a desire on the part of many to overlook ignorance, but in the nitty-gritty of negotiations, it will not be cricket -- "a game played by gentlemen and gentlemen who play according to rules".

And in the 45-year history of GATT, this is only the fourth Director-General and the previous two were Swiss. The first Swiss, Olivier Long, showed his independence from the US and EC when, in the closing stages of the Tokyo Round the two went to him with an agreement of theirs (on intellectual property and socalled 'counterfeiting' and asked Long to put it through the Green Room. Long, according to some of his aides then, gave the paper back and told them 'he had not become the GATT Director-General to wind it up".

While Dunkel could be faulted for being more amenable to US-EC joint views, but not "banging (their) heads together" (the phrase used by the US and EC to justify their choice of Sutherland), he knew the limitations of his own and the GATT secretariat's role and was cautious, too cautious perhaps, in avoiding adventurism.

Sutherland would be functioning over the next few months under the shadow of these precedents and tradition (even the 'green room', the conference room at the GATT headquarters where the D.G. conducts his consultations, has now been renamed, on an EC motion, as the Arthur Dunkel room) and if he isn't careful could be easily tripped.

Early in May in a report of an interview with him, the London Times spoke of Sutherland going to Geneva determined to shake the trees.

As an observer commented then, when he arrives here and takes office, he might quickly discover that, whether under the GATT or even the future MTO, his role is quite limited. He won't even be able to stir up the placid waters of Lac Leman (on the shores of which the secretariat building is) or shake the trees inside the compound, without discovering that there might be a Swiss regulation or a citizen's referendum to cope with.

But then Sutherland is Irish.