SUTHERLAND LOOKS TO G7, SHOOTS FROM THE HIP

8:22 AM Jul 5, 1993

SUTHERLAND LOOKS TO G7, SHOOTS FROM THE HIP
Geneva 5 July (Chakravarthi Raghavan) -- The GATT's new Director-General, Peter Sutherland promised in a press interview last Tuesday, on his first day at his desk at the GATT headquarters in Geneva that he would shoot from the hip and tell it as it is.

At his press conference Monday, Sutherland did plenty of shooting from the hip, interspersed with flashes of Irish humour, though it was not really clear against whom he was aiming the shots and what he would be doing to protect himself, and his institution, from the fate of those in the Wild West who shot from the hip, namely, that one day they would be shot down by another shooting faster from the hip.

Even though he could not have been unaware that the Quad week-end meetings at Toronto on market access and tariff-cutting had ended in failure, with the US refusing to budge on the question of cutting tariff peaks and harmonisation, Sutherland firmly tied his chariot to this weekend's Tokyo G7 summit (and the Quad ministers meeting to precede it) for a package of market access agreements among the major trading entities that would help unblock the stalled negotiations and enable the Geneva multilateral process to resume.

While he suggested that one should wait till Monday (12 July) for the G7 summit communique and their decisions/commitments on the Uruguay Round, he was also cautious and refused to commit himself to summoning a TNC to decide on the next steps if the G7 failed nor what he would do to break the deadlock.

He merely said he could only be an "honest broker" and that he had some ideas but would not want to give out how the US-EC deadlock could be broken.

For fair measure though, Sutherland, at the prodding of his press officer (who supplied the figure) seemed both to embrace the oft-cited claim about a $200 billion boost to world trade and world economy as a result of concluding the Uruguay Round, and at the same time make a joke of it and distanced himself from it.

Sutherland who placed a great deal of stress on the conclusion of the Round and the negative effects if the negotiations were not concluded by the 15 December deadline, both to the Uruguay Round and to the multilateral system, was asked about the likely benefits to the world economy by the conclusion.

He first refrained from putting any figure, explaining that he had seen several figures but did not remember them and did not believe them any way. But GATT press officer David Woods sitting by his side prodded him with the $200 billion figure, but then made a joke of it by saying "not a cent more, not a cent less".

Failure to conclude, he however added, would shake business confidence.

The $200 billion dollar bonanza claim was made in a study by Ian Goldin and Dominique van der Mensbrugghe, published by the OECD Development centre early in 1992.

After the authors' claims began coming under close scrutiny in 1992, the OECD Secretary-General Jean Claude-Paye, in December 1992, played it down by characterising it as a "pretty theoretical study".

This March, at the UNCTAD Trade and Development Board, Mensbrugghe who came to repeat the $200 billion dollar bonanza, when questioned repeated the claims and added that it could be more, but made clear that it would be after ten years.

And all his remarks seemed to suggest that what he, as a "facilitator", hopes to do is to get the Quad accord and use it to expand the process of consensus in Geneva and make others too to make market access concessions and conclude the Round by the 15 December deadline set by the US fast-track authority that was signed into law Saturday by President Clinton.

Sutherland also disagreed with the view, put forward at last week's ECOSOC "high segment meeting" by the Dutch Development Cooperation Minister Jan Pronk who said that the increasing globalization of markets, giving rise to large scale conglomerate units and transnationalization of decisions in trade and finance, while benefiting some groups also seemed to be resulting in increasing marginalization of small farmers, landless communities, minorities, indigenous peoples etc.

The GATT official said that he was supported in his view by the vast majority of developing countries who wanted the Round to be quickly concluded. He did not believe expansion of trade created social problems. Quite the contrary and reverse had happened, he claimed and that historically it had been shown that increasing trade produced more jobs. He also spoke about expanded service industries and services trade producing more jobs and reducing unemployment in the future.

More jobs would be lost through protection in the export sectors of the G7 countries than would be saved in the protected industries, he further argued.

Sutherland would not comment too on the likely effect on the conclusion of the Uruguay Round and the December 15 deadline as a result of the US court's decision on NAFTA requiring the administration to prepare an Environment Impact Study and present it to Congress along with the legislation for ratification -- a decision that would also apply to the Uruguay Round accords.

The Clinton administration has said it would appeal the Federal Judge's ruling, but the court can't schedule a hearing before mid-August earliest. The administration would file a brief before the Federal Appeals court by 19 July, and the three environment organizations that brought the suit would have time till 2 August to file their reply, and the government would then file an answer by 10 August. Only thereafter could the court schedule a hearing on the appeal.

Sutherland however insisted that the environment issues could hold up the Uruguay Round nor did he believe that the link between trade and environment created any problems for the conclusion of the Uruguay Round agreements.

Beyond saying that "we would have suffered a serious blow" Sutherland did not also want to envisage what could be done if the Round could not be concluded.

He however made clear that he was committed to be in office for atleast two years and would not walk away if the Round failed and the Multilateral Trade Organization (MTO), of which he is a strong proponent, failed. He made clear though that the name MTO was not important, but what was important was the post-Round institutional framework.

Earlier, just before his press conference, after being installed as Chairman of the official level meetings of the TNC, Sutherland spoke at the TNC using some of the very same cliches that have surrounded the talk about concluding the Round.

He told the TNC that the Round was now clearly in "the end game" and that the recognized deadline of December meant that the period of "suspended animation" in Geneva must end. He noted the recent indications by the major trading nations of their desire to bring the Round to a satisfactory conclusion and added:

"Their self-declared aim in doing this is to ensure that a credible multilateral process is re-started immediately and the Round concluded by the end of this year. All this can, should, and must be done if the Round is not to drive hopelessly away. The ingredients of a concrete package are at hand. The missing card is the decision by governments to conclude."

Sutherland also emphasized the "genuinely multilateral" character of the negotiations and said that the "acid test" of the success or failure of efforts in capitals to bring the Round back on track would have to be made at the "multilateral negotiating table...the concluding agreements, the end game...will have to played out in Geneva not elsewhere".