7:41 AM Apr 6, 1993


Geneva 5 April (Chakravarthi Raghavan) -- The Chairman of the CONTRACTING PARTIES to the General Agreement, Amb. Balkrishna Zutshi of India is expected to begin some time next week active consultations on the choice of a successor to Arthur Dunkel as Director-General of GATT.

Dunkel's term runs out at end of June and in theory a successor must be found by end of April.

A preliminary round of consultations in February by Zutshi reportedly showed that both the major trading entities, US and EC, favoured search for a successor rather than a further extension to Dunkel. In that light Zutshi had asked the contracting parties to provide him by end of March names of candidates for a successor on the basis of which he could conduct further consultations.

Zutshi is away in India and due back later this week. He is expected to renew the consultations next week after the Easter recess.

According to GATT sources, several names have been mentioned with former European Community Commissioner, Peter Sutherland of Ireland, as a front-runner.

Sutherland is now heading a private aeroplane leasing company where his income is much higher.

The EC Commission reportedly favours him and, according to some reports, his name is also likely to get the support of the United States.

Other big names are also being mentioned, including President Salinas of Mexico and some politicians in Britain and Germany who have held office as ministers.

Dunkel and his predecessor were Swiss, chosen at a time when the GATT's membership was dominated (in numbers) by the contracting parties from industrialized countries, and Switzerland was seen as not belonging to either of the two major entities. The choice of a GATT head as other matters were decided by the US and EC and conveyed to others to accept by consensus.

Only in 1986, at the instance of Brazil and India, procedures were set for the appointment of the DG and his deputies, with the stipulation for consultations to begin for a DG's choice six months before, so that countries would have time to think and consult.

In factual terms, the Third World can make its voice known, but would need to find a credible candidate and unite behind him.

Third World GATT sources said that at the moment it appeared that the US and EC are really trying to decide on the Dunkel succession, with no consultations with others.

However, there are reports that Sutherland would be willing to give up his highly paid private sector job and take on the assignment only on the basis of his being the head of the new Multilateral Trade Organization (MTO) to emerge out of the conclusion of the Uruguay Round. He might also be looking for comparable 'compensation' to that of the heads of the IMF and the World Bank.

But unlike these last two, whose salaries (as that of the executive directors and the employees) come out of the earnings of these institutions -- interest on loans to the developing world, and 'managing' the capital -- the budget of the GATT head and secretariat and other expenses are apportioned among members according to their trade weights.

Some GATT members note that given that Dunkel's successor has to take over on 1 July, when the Uruguay Round's future still has some major question marks, it would be difficult for anyone to satisfy or promise Sutherland about his heading the MTO, particularly since the US is opposed to the MTO or any other institutional structure with an organizational content, and wants only what it calls a GATT-II.

Some GATT officials note that even if the Uruguay Round negotiations conclude before the end of the year, there would be a long hiatus before it would sail through the US Congress and is accepted. Without US Congressional approval and acceptance by the US, no one would be in a hurry either.

Some Third World sources also say that there have been some suggestions or reports that the US and EC have also been consulting on having a successor to fill the interregnum and complete the negotiations. The names of some Third World negotiators and former negotiators have been mentioned but at least one of the Latin American names mentioned has reportedly turned down any such 'stop gap' appointment.

Meanwhile, some internal changes effected in the GATT secretariat have also riled some.

Gary Samson, an Australian national, who was heading the secretariat department on the services negotiations has been shifted and in his place has been named David Hartridge who till now was dealing with intellectual property negotiations. Samson has been asked to take over that department.

After a meeting of the Latin American and Caribbean group of countries, the GRULA coordinator reportedly had met with Dunkel and expressed their concerns at these staff changes, particularly when Dunkel himself would lay down office by 30 June.

Among their concerns reportedly was that David Hoss of Australia who has been heading the services negotiations after GNS Chairman, Felipe Jaramillo of Colombia had gone back to Bogota, has also moved away and there would be no 'continuity' in the services negotiations.

Dunkel however is reported to have explained that the secretariat support for both services and Trips negotiations fell under the jurisdiction of his deputy Carlyle who has effected changes which in any event were internal matters for the secretariat.

While the Grula view is also known to have been shared by the Australians, others see it as a purely internal affair and note that the negotiations in the Round has now reached a stage where the secretariat has little or no role.

There are also reports that Carlyle, whose term too is ending, is to be replaced by Warren Lavorel, who is currently the chief official negotiator for the United States.

If Sutherland is ultimately chosen, and Warren Lavorel is appointed as Deputy Director-General the GATT would be brought firmly under the grip of the two major entities.

There are also other questions involved in naming the official US negotiator for the Round and GATT to take the number two post in the GATT secretariat, including questions about the secretariat's "neutrality" and whether it will be so perceived by the contracting parties as well as by the public.

There is a view among some Third World delegates that since they can't really influence the outcome of either the choice of the DG or the deputy, it is 'wiser' not to object and spoil one's relationships with the secretariat.