Aug 3, 1992

UN CHIEF REMAINS ADAMANT ON APPOINTMENT OF ITC HEAD.

GENEVA, JULY 31 (CHAKRAVARTHI RAGHAVAN) -- The United Nations and GATT remain stalemated over the future of the International Trade Centre and its Executive Head, GATT CONTRACTING PARTIES were told Friday.

The Chairman of the GATT Council, Amb. Bal Krishan Zutshi was reporting to a meeting of the CPs on his discussions in New York this week with the UN Secretary-General on this issue.

Soon after taking over and the plans for restructuring of the UN Secretariat announced by him in February, UN Secretary-General Boutros Boutros-Ghali had turned down a recommendation. to fill the vacant post of the vacant of the Executive Director of the International Trade Centre for a three-year term at the rank of an Assistant Secretary-General as earlier incumbents since 1979.

The ITC is a subsidiary organ of GATT and the UN Conference on Trade and Development. The ITC's 1991 budget was 55 million dollars of which 16.6 million was the regular budget jointly shared by the UNCTAD and GATT while the balance came out of voluntary contributions and UNDP funding.

Set up to promote exports from the developing countries, it has some 300 projects with some 700 short-term consultants, advising governments and enterprises, and a staff strength of over 300 at headquarters and in the field.

The last executive head was a Swede, and the President of the Irish export promotion board was chosen as his successor and the name went up to the UN Secretary-General for appointment, when Perez de Cuellar was still in that job. Perez de Cuellar however put off the appointment to his successor, who decided to downgrade the post in line with his overall restructuring exercise at the headquarters and to offer any new incumbent only a one-year assignment.

With both the developing countries benefiting greatly from the ITC activities, and the funding governments, united in the view that the ITC with a executive head in a downgraded post would be unable to do the job and, even more be able to deal with governments at a sufficiently high levels, the GATT CPs have been trying to persuade Boutros-Ghali to change his mind.

A number of funding governments in the North, particularly the Nordic countries, also made clear that unless the ITC was going to be headed by a sufficiently high-level person, they would have to reconsider their funding.

They asked in April the Chairman of the CPs, Amb. Lars Anell of Sweden and the Chairman of the GATT Council, B. K. Zutshi to jointly meet Boutros-Ghali, but their efforts to meet him failed. At that time while Boutros-Ghali at a press conference had said his doors were always open, Anell had said, after several unsuccessful efforts to reach Boutros-Ghali "never had a door remained more firmly closed".

Anell at that time reported to the CPs that unless Boutros-Ghali changed his mind, the only alternative for the continuance of the ITC as before was for the GATT to take it over completely, and for the ITC to be run as a separate GATT body and no longer as a joint operation with the UN.

This prospect of one more institution of benefit to the Third World in the economic sector going completely out of the UN and into the hands of the GATT and the Bretton Woods institutions was not favoured by the developing countries.

Since then, after several further unsuccessful efforts, including attempts of GATT officials to reach Boutros-Ghali's American Under Secretary-General Thornburg and his deputy, Zutshi had reported the state of stalemate to the GATT Council in July, but said he would make one more effort.

After the Council meeting, and the report there, Anell and Zutshi were invited by Boutros-Ghali to meet with him in New York. Anell was not available on the particular dates, and Zutshi went to New York earlier this week, along with GATT Deputy Director-General Charles Carlisle and another GATT official but "failed to sort out the issues", as Zutshi put it in his report Friday.

In his detailed report to the CPs, Zutshi said that he had explained in some detail the importance attached to the ITC by the CPs and their concern at the present state of affairs resulting from the vacancy of the post of the Executive Director, and had underlined the "unique role of ITC and the importance of its programmes and activities for developing countries specially the least developed countries".

Zutshi said he had also brought out in some detail the views expressed generally by the CPs and, in particular the donor countries among them, on the role they envisaged for the executive head of the ITC.

In response, Zutshi said, the Secretary-General sought help "in pushing through his reform and restructuring plan of the United Nations institutions" and made it clear that the downgrading of the post of Executive Director of ITC to D-2 - to the level of the post before 1979 - was "a matter of principle for him in the framework of the overall restructuring of the United Nations" where he had already cut 15 posts at levels of the USG and ASG.

In Boutros-Ghali's view, Zutshi reported, "it would not be difficult to find numerous candidates to accept the post at the D-2 level".

"In subsequent discussions", Zutshi reported, "it was pointed out that the ITC was not an UN institution in the strict legal and juridical sense; that it was an institution run on partnership basis between UN and the GATT; the nature of the activities of this organisation was different from any other institution in the UN system".

Zutshi added that it had also been pointed out that "there was no other international institution to our knowledge of the size of the ITC in terms of its annual budget, staff strength and geographical spread of its activities that was headed by an official of that level and that it was our view that we would not be able to find a suitable person to man the organisation on the terms suggested by the Secretary-General particularly in regard to the short duration appointment of one year".

Also, on the issue of reverting the post of Executive Director to its level prior to 1979, "it was pointed out that since then the size, activities and budget of the organisation had so increased as to render comparison with the organisation in 70’s invalid".

The Secretary-General's response, Zutshi reported, was that "the restructuring of the UN had been requested b by the same governments which did not agree with him in GATT" and felt that "any change in his stand on this issue would compromise his efforts at restructuring the UN system".

In further discussions, and keeping in view the legal fact of equal partnership between UN and GATT in the management of the ITC, a suggestion was mooted (by the UNCTAD Secretary-General Kenneth Dadzie who was present at the meeting) to disassociate the salary and level of the post of Executive Director and offer the selected candidate a salary between D-2 and ASG with an initial appointment for a period of two years.

But this too was not accepted by Boutros-Ghali on the ground that this would create a precedent. He however offered to approve the appointment of Mr. McCarthy (the Irish candidate originally chosen, but who has since made clear he was no longer available), if he was still available and willing to accept the post at D-2 level for a period of two years.

After Zutshi's report, while Egypt and Nigeria supported the Boutros-Ghali's view to appoint a candidate at D-2 level for two years, other CPs, both from developing countries and the funding governments (including Canada, Sweden and Switzerland) all expressed their unhappiness at the stand of the UN Secretary-General. Several of the CPs also said they could not accept the proposition that the UN Secretary-General could unilaterally decide things on behalf of the GATT.

Delegates said they would report back to their capitals and give their views when Zutshi resumes consultations after the summer break.