6:19 AM May 27, 1993


Geneva 27 May (Chakravarthi Raghavan) -- Peter Sutherland, the EC-US nominee to succeed Arthur Dunkel as Director-General of the GATT met at an EC-hosted lunch a hand-picked group of ambassadors to GATT to explain his stand on various issues, according to GATT sources

A special session of the GATT Contracting Parties has been convened for 9 June for electing the successor, who will be formally appointed as head of the secretariat for the Interim Committee for the International Trade Organization (ICITO), a UN body that has existed since 1949 and meets from time to time only for this job.

Besides Sutherland, there are two Latin American candidates -- Amb. Julio Lacarte of Uruguay (now special advisor to the President of Uruguay) and Amb. Luis Fernando Jaramillo of Colombia, currently permanent representative of his country at the UN in New York, but who has held high offices in his country.

Sutherland is no doubt a front-runner and will probably be chosen, but the issue is not all that settled as the western media make it out, one Third World diplomat suggested Thursday.

Lacarte is due to meet a group of ambassadors Thursday night at a dinner hosted by Amb. Ghali Benhima of Morocco who is chairman of the informal group of developing countries in the GATT.

When the candidatures were conveyed to the contracting parties informally at first, and later formally at a meeting of the GATT Council in May, some developing countries had suggested that all the candidates should come and meet the informal developing country group and explain their views and stands.

At that time, such a formal appearance was felt to be not adding to the dignity of the post or the election. Benhima then offered to host dinners for each of the three candidates and advised their delegations here.

But the EC, which sponsored Sutherland, did not agree and offered to host a luncheon itself and did so Wednesday and was attended reportedly by a small group of 2-3 ambassadors from each region.

Sutherland reportedly suggested at the lunch that though he had been named or sponsored by the EC and US, he was not trying to come in as their nominee and would not want the post unless he was endorsed by all.

And while modifying considerably the originally stated 'conditions' -- he himself did not formally set them out, but these had been widely reported in the western, particularly Anglo-Saxon media as involving conclusion of the Round and creation of the Multilateral Trade Organization and ability to bring his own team of top management -- Sutherland was reported still to be of the view that the post of the D.G. in terms of salaries and status should be equated to that of the heads of the International Monetary Fund and the World Bank in order to enable him to deal with them on equal terms.

However, it has never been clear what exactly the heads of institutions talking together on any terms could do in respect of issues that have to be decided by governments who control and decide on international economic policies. It has been even less clear to the ordinary public what any GATT or MTO/IMF/World Bank coordination would involve, since the IMF and the World Bank have no voice or control over the industrialized countries, and any coordination among the three heads could only be to put more pressure on developing world.

While most GATT diplomats seem to feel that there is nothing wrong about all this, several of them said they still would face problems of a technical and legal nature since the GATT and its secretariat are governed by the UN system rules in these matters and the GATT would have to opt out of the system first.

The emoluments and terms of contract of the GATT DG is not publicly available, but acceding to Sutherland's views would involve a salary increase in the range of an annual 60,000 dollars, one source said.

It would soon give rise to demands from the GATT staff to be treated on a similar footing and, according to reliable estimates, it will involve a 9-15 percent increase in the GATT budget.

And unlike the budget of the Fund and the Bank (which are charged to the earnings of these institutions, and now coming out of the interest paid by developing countries who borrow from these institutions), the GATT budget is apportioned among its membership on the basis of the trade shares.

The high life style of these financial institutions and their staff have come in for some attention recently in the exposes relating to EBRD and Attali.

The Fund/Bank salaries and conditions of service are about 20-30 percent higher than equivalent posts and positions in the UN system. In 1991, when Attali was appointed to head the European Bank for Reconstruction and Development, the IMF Managing Director's salary was increased to match Attali's. In the process that of World Bank President and the staff of the two institutions including that of Executive Directors also went up.

In the context of the concerns of NGOss in the South and the North, critical of GATT, the proposed MTO and the Uruguay Round accords, and their real effect on to create level playing fields in developing world for the transnational corporations, the GATT decision will be an "interesting", but not amusing, outcome.

Other issues reportedly weighing with various key players are questions about other top management jobs.

Western media have said that Warren Lavorel, now the senior most US career diplomat dealing with Uruguay Round, would be named as a Deputy Director-General. Japan is said to feel that it too should have a Deputy DG post, while other reports mention several names from Latin America for a third Deputy DG post.

Other developing countries say only one of the two top deputies posts can go to a national from an industrial country.