8:26 AM Jun 3, 1993


Geneva 2 June (Chakravarthi Raghavan) -- To the outside world officials and trade diplomats at the General Agreement often present it as an exponent of free trade and democratic decision-making based on consensus, but inside Centre William Rappard though it is a world of managed trade and management of consensus seems more like democratic centralism evolved by Lenin, and successfully practiced by Stalin, Khrushchev, Brezhnev (not Gorbachev though).

While there is no 'repressive' apparatus in the GATT, its majors can always do arm-twisting, including the '301s'.

But when talk of glasnost (transparency) and perestroika and democracy ala Gorbachev begin to get serious, the establishment and the power-brokers get nervous and edgy and there was plenty of that visible, as the 'informal group of developing countries' was meeting Wednesday evening at Centre William Rappard (the building in Geneva on the shores of Lac Leman where GATT is housed) over the selection of a Director-General to head the GATT secretariat to succeed Arthur Dunkel.

The EC's Chief GATT delegate, Amb. Tran Van-Thinh, went before the informal group, at his own request, to chide them for complicating matters (and spoke of independence being fine, but independence with stupidity would be serious -- with developing country delegates viewing the remarks variously) and explain the EC position on the choice of Sutherland and why the EC did not think it a good idea for him to go before the informal meeting and explain himself and his views, as the informal group had sought in a renewed invitation.

Tran even as he entered the GATT building was visibly upset and surprised when he saw a couple of newsmen (who did not at that time know that Tran was going to the meeting of the developing countries) and somewhat in a light mood had asked him "don't tell us you are going to the LDC meeting". Tran remarked "I'm shocked at your question", and later, as he went out said "don't you know I am dictator of the GATT".

Tran told the newsmen, as he was leaving the building, in a more serious tone that he had gone at his request before the informal group to clear up "some misconceptions that had arisen since Friday evening" (when the group had been informed by its chair, Amb. Benhima of Morocco, that Sutherland had been wiling to come but the EC Commission had vetoed it), but did not clarify whether it was in the way it was conveyed to the group or something else.

Some developing country diplomats later said that the EC has been upset that the weekend media reports (including that in the Wall Street Journal on Tuesday) after the Friday meeting had brought into the open the simmering discontent within the GATT, giving rise to the feeling in Brussels and Washington too that things were not so smooth, and that Tran himself was upset that what the EC thought was a 'compromise' worked out with the informal group's chairman, Amb. El Ghali Benhima, was unravelling.

The informal group of developing countries, Tran said, was not a formal structure of GATT, and the EC felt that GATT should remain a multilateral process with its own decision-making processes based on consensus, and not function on the basis of groups, that the Chairman of the GATT CPs had been entrusted with the responsibility of holding consultations and finding out which candidate commanded the consensus, and this should remain the procedure.

Perhaps unconscious of the irony, or as a carrot to the developing countries (many of whom feel the EC is more sympathetic to their problems than the US) anxious over the trade negotiations, Tran also told the group that he had just come from Paris where, around the OECD's annual ministerial meeting, the Quad (the informal group comprising Canada, EC, Japan and the US) trying to steer GATT had met and reached some good conclusions on Market access issues in the Uruguay Round which could now be taken to Tokyo for the G7 summit, and then brought back to Geneva and multilateralised through the consultation/consensus processes.

But apparently, in the managed trade world of GATT, it is alright for the four to get together, though they have not constituted themselves as a trading entity under Art XXIV of the GATT, or the G7 western annual summits which too is not formally constituted one (in terms of constitution etc), but that the developing countries who whether in the Group of 77 at the UN or at the GATT are an 'informal group' should not do this or function as a group and try to negotiate collectively or perhaps even meet collectively to consider these things.

However, over the last 2-3 years, Dunkel himself as Chairman of the TNC has gone before the informal group to 'explain' the situation over the Uruguay Round negotiations, and the informal group has from time to time also met to consider and put forward candidates for various offices in the GATT -- without any such objection. But Tran from time to time has objected in the Uruguay Round TNC or the GATT Council over collective statements of the group.

An incensed Third World diplomat commented, "it is alright for the (EC) 12 to meet at the drop of a hat, but not for the countries of the developing world."

Third World diplomats later said that Tran had told the group that the EC view against Sutherland going before the informal group at their invitation was "not a diktat", that Sutherland was an independent person who could do what he liked, but that the EC had not viewed it as a good idea and had so advised Sutherland.

Some of them thought Tran had chided the developing country group for complicating matters by the process of asking candidates to come before them and explain themselves or campaign for the job.

Tran told the informal group that though the EC had not thought it a good idea for Sutherland to come to Geneva to meet the developing country diplomats, and as a compromise had arranged a small lunch over which he had met a few delegates who had an exchange of views with him, EC commission would 'host' a cocktail at their mission where developing country delegates could come and meet Sutherland and talk with him informally. Tran also told the group that since the mission's premise was not large, may be those who had already met Sutherland may not come.

Later Tran called up Benhima and confirmed this 'event', to take place on Thursday afternoon.

As one senior ambassador from the developing countries put it, "some get an invitation to lunch, others for cocktails", but that this would not decide issues either way. After the developing country meeting, several diplomats said the Tran idea 'did not fly', but that some would go and others not.

As a relatively junior diplomat from Pakistan (which perhaps unwittingly set off the rumpus by suggesting the reissuance of an invitation to Sutherland after Lacarte had come before the group) reportedly put it at the meeting itself, the issue can't be decided by first secretaries or counsellors or even ambassadors in Geneva meeting Sutherland, whether over lunch or cocktails, but the choice has to be decided upon by the capitals who also have to take a conscious decision whether to introduce voting in the GATT.

The EC had proposed, and the United States agreed in March, on tapping Peter Sutherland from Ireland as the next GATT head, and this was conveyed to the Chairman of the GATT Contracting Parties, Balkrishna Zutshi of India, for him to consult the other contracting parties and establish the existence of a consensus and manage the election.

As the EC officials now explain it (and it is dutifully being conveyed by the concentric circles of power brokers in the GATT over the last few days to the media, and swallowed unquestioningly by some mediamen,), the EC and US had tapped on the Irishman as a person of fierce independence "who could knock the heads of the US and EC together to break the deadlocks" in the Uruguay Round and complete the negotiations.

An EC official said Friday evening, "We felt that Sutherland's stature as an independent, skillful, political animal qualified him for such a job."

Meanwhile though, Sutherland's "I am available and am not available" talk, had encouraged the Latin Americans to try and put forward a panel of names from which a selection could be made. This resulted in the panel of two -- Julio Lacarte Muro of Uruguay -- who at one stage is known to have been sounded by the majors whether he would take the job just for six months, but had spurned anything less than a full term -- and Luis Jaramillo of Colombia.

By the time the names could be finalised, Sutherland was back in the picture and Brazil who had also thought of fielding a candidate, gave up.

It is not so much this dynamics, and what some see as manoeuverings to keep it going, perhaps for some quid pro quo before 'accepting' the US-EC choice as a consensus, that has unnerved the US, EC and the OECD countries. For all the talk of the qualities needed from a GATT chief, in reality whether under the present General Agreement or even under the new MTO, he will remain only a 'contracted party' and has little scope to take any initiative or make proposals without specific authorization or acquiescence of the cps.

Whether they succeed or not in this first attempt to break the monopoly of office of Europe in the GATT, once they learn to act together and things have to be decided by a vote (experienced GATT hands say that even in a vote the EC, with its supporters in the Third World and the ACP countries, and the other OECD countries would easily win), the ice would have been broken and the future of the GATT decision-making process to achieve pre-determined ends would begin to erode.

This decision-making process has been explained by the former Australian representative to the GATT, Amb. Alan Oxley (who played a part in forging the Cairns group before Punta del Este in 1986 and whose formation as a coalition of some countries of the North and the South helped the virtual break-up of the developing country group acting together on the Uruguay Round) in his book "The Challenge of Free Trade":

"..it was an established practice in GATT for the key players to get together quietly outside the formal conference room to 'cut deals'. Such meetings are usually unpublicized and agreements reached in these meetings were fed afterwards into the formal process of negotiations. Some changes to the basic deal were possible but these were invariably minor. The identity of key players varied from issue to issue.. But in agriculture, the tradition had been for the European Community and the United States to settle the basis of the agreements..."

Oxley had written it in the book to make the point that at Punta del Este, the US wanted the Cairns group to be involved. For observers of GATT though, it also implied that groupings are alright, provided it is a group including some from the North who would not upset the power structures, but nothing completely South.

The edginess and nervousness of the EC arose over the possibility that the informal group of developing countries (now accounting for 84 of the GATT's current membership of 111), which had been virtually broken up in terms of substantive issues on the eve of Punta del Este, may come together and refuse to continue the practice of 'amen' to things decided at the 'top' by the major trading entities and try to bring to bear on the US and EC their collective weight, and that in the medium to long-term it will pose a challenge to the neo-mercantalist trade regime, the Transnational World Order that the Uruguay Round and its MTO are to establish so as to perpetuate the control of the North over the 'global' economy and thus the world's polity.

While the US too is equally concerned, at the moment it is taking a backseat, and allowing the EC to take the flak. But for the EC it also means its own grip over the ACP lobby could be in jeopardy, though some in the ACP itself seemed to look at the Latin challenge as part of the fight over bananas and other issues over preferences.

But with the process of selecting a successor to GATT Director-General Arthur Dunkel becoming complicated, GATT diplomats were no longer betting Wednesday night that everything could be wrapped up and 'white smoke signal' sent out on 9 June when the Special Session of the Contracting Parties has been set to meet for this purpose.

While experienced GATT diplomatic hands still say, in private and non-attributively, that EC-sponsored Peter Sutherland, is likely to win the post and, at the end, the choice will be by consensus, they are not so certain that this would all be achieved by the time the CPs meet in Special Session.

Though there is still an under-current of anger and resentment among many at the way the majors, and particularly the US and EC were trying to decide things and run the affairs of GATT, and the mood of the Third World delegations is discontent, the buzz word is "consensus without confrontation", one developing country diplomat said Wednesday evening after the meeting of the informal group of developing countries.

Reports in the media, after last Friday's meeting of the informal group, of a brewing rebellion in the group over the entire process and the way the US and EC had proceeded in the choice, had clearly unnerved the EC Commission sufficiently to persuade its GATT Chief delegate, Amb. Tran Van-Thinh to seek an invitation and appear before the informal group to remove "some misconceptions" over the reasons why Sutherland could not accept the informal group's invitation and appear before them.

The EC (as the other majors) clearly do not want a situation in the GATT when developing countries would join and function together in any North-South divide, but continue in the present "multilateral" ways where the majors meet outside, cut a deal and present it to others for acceptance by 'consensus'.

As both EC officials put it Tran had sought an opportunity to address the informal group and had done so to remove what Tran called "misconceptions" that had arisen since Friday evening.

Last Friday, the informal group, after hearing Lacarte, had renewed its invitation to Sutherland to meet the group and have an exchange of views, but was informed that while Sutherland had been agreeable, the EC Commission had ruled out such a possibility.

This had created a sense of 'indignation' and the reports of the meeting and the incipient rebellion had clearly upset the EC Commission in Brussels and the delegation.

After Tran left the informal group, in the discussions, while the Latins who spoke asked the other developing countries to support them, several of the others said that they could not be expected to make a choice when even the Latins had not agreed and put up one candidate, thus enabling their own capitals to make a choice. Cote d'Ivoire intervened twice to make the point, and was supported by a few others.

The Group of Latin American and Caribbean countries were due to meet Thursday morning to assess the situation and see whether they could unite behind and choose a single candidate, from the panel of two which they have now sponsored: Colombia's Luis Fernando Jaramillo and Uruguay Julio Lacarte-Muro.

Later in the afternoon, some of the informal group members are also expected to attend the informal meeting over cocktails, "for those interested", arranged by EC Commission to meet Sutherland.

At the informal meeting, Benhima also noted that the group had invited all the three candidates, and he had offered to host dinners to enable the candidates to meet a group of the developing country ambassadors, but that he had not heard anything from the second Latin candidate, Amb. Jaramillo.

The Colombian delegation was reported, by other Third World sources, as explaining that Jaramillo as the G77 Chair in New York was busy, but that he could still come if he was needed, or the group may come to some consensus even in his absence.

But Benhima pointed out that time was running short, because of the 9 June Special Session of the CPs already convened, a point that other Latin American delegates later conceded outside, while still insisting on an open and more transparent process and for the views and weight of the developing world to be reflected.

Chilean ambassador Ernesto Tironi, one of the few who spoke to the newsmen on record, to tell them what he had said in the group meeting, said that he felt that the developing countries had to "open themselves to the possibility of a Director-General from a developing country".

"Why should it be taken for granted," Tironi told newsmen, "that the rising number of developing countries in GATT up from 56 in 1980 (when Dunkel was chosen in a deal between US and EC) to 84 now hasn't been reflected in bigger representation" in the GATT leadership.

Tironi said that he was not insisting so much for a developing country candidate but for an open process and open minds. Sutherland was an excellent candidate, but so was Lacarte, he suggested. Their intention in putting up a panel of two, may be three, rather than lining up behind anyone, was to open up a process, he said, but backed away from the implication that they could come up with a dark horse.

An EC diplomat, who seemed to be as much amused at the developing country discussions with newsmen in corridors as with the EC Commission's problems of 'managing' asked: "what is the next episode in the GATT saga"?