9:55 AM Jun 1, 1993


Geneva 28 May (Chakravarthi Raghavan) -- The informal group of developing countries in the GATT are due to meet Wednesday (2 June) to decide whether it could unite behind a single Third World candidate to succeed GATT Director-General Arthur Dunkel who retires at end of June as against the US-EC sponsored candidacy of Peter Sutherland of Ireland or whether it should bow to the US-EC choice.

A Special Session of the GATT CPs has been set for 9 June to decide on the successor under a process set in 1986, at the instance of Brazil, India and other Third World countries to bring more transparency and an element of democracy in the selection of a GATT Director-General and his deputies.

A farewell reception for Dunkel by the Chairman of the CPs has also been set for 16 June.

Officially, besides Sutherland who has been formally nominated by Ireland but sponsored by the EC and backed by the US and the OECD countries, there are two other candidates: Julio Lacarte nominated by Uruguay and Luis Fernando Jaramillo nominated by Colombia. Both have been backed or sponsored by the Latin American and Caribbean group of countries.

While Sutherland is viewed, even among many developing countries privately, as the most likely winner in the field of three, the contretremps came when the informal group was told on Friday by its Chairman, Amb. El Ghali Benhima of Morroco, that while in response to their invitation Sutherland had been willing to come and meet them, this had been ruled out by the EC Commission.

This information created a sense of 'indignation' among delegations, with some expressing concern that the selection process and the US-EC attitudes would be the pattern developing countries would be faced with over the conclusion of the Uruguay Round too -- with the majors negotiating among themselves and deciding things and telling developing countries in the end to endorse it and conclude the Round.

Since he received the three nominations at end of April, the Chairman of the CPs, Balkrishna Zutshi of India, has been holding a series of plurilateral consultations on the choice. While the consultations may have introduced better transparency (than when the first three GATT heads were appointed), GATT's consensus process is shown more like the story of the married couple where the husband makes the major decisions and the wife the minor, with the wife deciding what is 'major' and what is 'minor'.

In January, after the new administration had taken over in Washington, US diplomats let it be known that they did not favour continuance of Dunkel and a successor of stature should be chosen. In preliminary consultations it was agreed that the new man should have some ministerial stature and knowledge and experience of the GATT.

Then in March, after a meeting between EC GATT Commissioner Leon Brittan and US Trade Representative, Micky Kantor, it was reported that the two had picked on Sutherland, an Irish politician, former Attorney-General and former EC Commissioner for competition, but now heading the Allied Irish Bank and Guinness Peat Aviation, to head the GATT and broker a deal between the US and EC to conclude the Round.

The two had not consulted or sounded others, but after the choice informally advised Zutshi and other key countries about their choice. Media reports about the conditions set out by Sutherland raised some eyebrows and even as the informal developing country group met to consider them, the EC had again informally advised Zutshi that Sutherland was no longer available for personal reasons.

While some in the developing country-group thought that Dunkel should be asked to continue, by then Dunkel had made known that he did not want to continue and a successor had to be found.

It was then that the Latin American group decided to field some candidates. But in the meanwhile, the EC Commission President persuaded Sutherland to change his mind and on 30 April, the London Times quoted Irish sources that Sutherland had been confirmed as GATT D.G. and would take over from Dunkel. This was followed on 3 May by an interview with Sutherland on what he planned to do in GATT.

While Sutherland, after a visit to Geneva to meet Zutshi, became wiser to GATT ways and reportedly refused to speak to the media any more, there was a continuing barrage of stories in the western media, particularly those with reputation of reflecting big business and GATT 'establishment' view. Most of these reports proceeded (and said so) on the basis that once the US and EC had decided, GATT CPs had no other choice but to endorse it, and going on to expound what Sutherland would and should do.

All this irritated other contracting parties and, at an informal meeting of developing countries early in May where Zutshi met them and conveyed information on the nominations he had received of Sutherland and the two Latin American candidates, several delegates suggested that the three candidates should be invited to come and meet the group to enable delegations to get acquainted and make their choice.

When some questions were raised about the advisability of such a step, as a compromise Benhima had offered to host three separate dinners for each of the three candidates with a representative group of Third World delegations.

But the EC had not been agreable to this either, and itself set up a lunch Wednesday (at one of Geneva's poshest restaurants) where a few key developing country delegates were enabled to meet and talk to Sutherland. Many though came away from the meeting favourably impressed by him and somewhat reassured that he would not behave on the basis that what is agreable to the US and EC should be good for the rest of the world.

Lacarte who had accepted the Benhima invitation met these and some other developing country delegates on Thursday night and offered to meet the informal group on Friday morning. At the informal group where he set out his view of the GATT DG's job, he answered many questions about how the Round would be completed, how the new D.G. could ensure transparency in the negotiations right from its resumption (after the new US fast track authority) and not face the developing world with a set of agreements reached by the majors at the end.

It was clear that many delegations wanted to hear Sutherland's views too and judge for themselves whether he would function as a power-broker between the two majors or take a wider view.

At the instance of Egypt and Pakistan, it was decided to renew the invitation to Sutherland to come and address the group and answer their questions. But many viewed this as merely an occasion to satisfy the group's amour-propre before accepting Sutherland and had not anticipated a 'refusal' by the EC to allow Sutherland, though willing himself, to meet the informal group.

At the evening meeting, when the EC stand on Sutherland coming to the informal group meeting (made known reportedly at a plurilateral consultations held by Zutshi and attended by Benhima and a few other Third World delegations) was conveyed, it created quite a sharp reaction.

Brazil's Amb. Celso Amorim reportedly spoke of his own earlier favourable impression of Sutherland after the luncheon meeting, but referred to the feeling of indignation in the group over the EC stand and the entire process. Uruguay is reported to have reacted 'very strongly' referring to the western media reports. The Asean stressed the need to avoid confrontation, but noted that if the selection process was repeated in relation to the conclusion of the Round, it would create problems for all of them.

Pakistan too viewed the EC stand as 'surprising' and one that needed to be reflected upon in capitals and for them to make their own decisions, but stressed the need to avoid any confrontation. Several speakers also spoke of need for the group to see whether it could unite behind a single candidate.

Whether on Wednesday (when the group meets again) the same mood would prevail, making the selection process more complicated than GATT's power structures had thought or whether the 'majors' will stamp down the incipient revolt to demonstrate their control over the GATT, Dunkel's successor will be starting on a wrong foot, the two majors would largely share the blame for this, observers of the GATT suggest.

Whatever the final outcome, and experienced GATT delegates still believe that Sutherland would finally be accepted, the way the two majors have handled the selection has brought out into the open all that is wrong with the GATT processes (in terms of transparency and democratic decision-making) and, perhaps worse, will become even more so after the conclusion of the Uruguay Round and its institutional arrangements come into force.

Others took a more sanguine view, noting the considerable changes that have already taken place compared to decisions in previous appointments, and suggested that the message would not be lost on Sutherland that he can't proceed on the basis that whatever is in the interests of the US and EC or their transnationals would necessarily be acceptable to the others.

Before 1986 (when the GATT CPs put in place the new procedures), it was taken for granted that the GATT must be headed by the national of an industrialized country and there was no question of regional rotation or opportunity for candidates to be nominated and a selection made.

All three who have headed the GATT secretariat since inception have been Europeans: the first Wyndham White from Britain, and his two successors, Olivier Long and Arthur Dunkel, both Swiss. While there was some inevitability in the first -- White had been the official in the negotiations leading to the GATT -- the second (Olivier Long) and third (Arthur Dunkel) were picked by the EC Commission and won the endorsement of the United States, with the election itself a pro forma affair, where the cps were informed of the choice and invited to accept it.

When Dunkel was named, there had been another candidate from Australia, but the US agreed with the EC to back Dunkel and the publication of this 'leaked' news caused the US no amount of embarassment.

But in 1984, the US and other OECD countries had begun talking of limiting the terms of people heading various UN organizations and Brazil in 1986 sought to extend this to the GATT too and to make the selection/election process more transparent. The divisions over the launching of the Round, and the perceived view of Dunkel's role in helping to split the unity of the informal group was also a factor.

As a result in 1986, the Contracting Parties agreed on a process whereby the 'consultations' for selection of a GATT Director-General was to be started by the Chairman of the CPs, six months ahead, and any candidate should be appointed for a four-year term, renewable for another four years.