10:16 AM Jan 20, 1995

WTO HEAD ISSUE TO FIGURE IN US-EU TALKS

Geneva 20 Jan (Chakravarthi Raghavan) -- The focus in the race to the top job at the World Trade Organization shifts to Washington and the US-EU bilateral ministerial meeting on trade next week, trade diplomats in Geneva reported Thursday.

The Korean foreign minister, as also the Korean candidate Kim Chul-Su, are also due in Washington where the United States Trade Representative might raise the issue.

The former Mexican President, Carlos Salinas de Gortari, in a visit to Geneva had a series of meetings with groups of GATT/WTO diplomats where he outlined his views and philosophy, and responded to some of the questions raised, and why he was seeking the job of the WTO Director-General.

At the end of the day, the United States and some of the Latin missions to the GATT, hosted a reception for Salinas whose candidacy is officially backed by the United States and the Group of Latin American and Caribbean nations.

In the five meetings he had with groups of country representatives, and in his dialogue with them, Salinas presented himself as a candidate from the South who wants to and can build non-confrontational bridges to the North and making trade the engine of growth and development.

Unfazed by the Mexican crisis, and the criticisms against him back home, Salinas himself reportedly brought up the issue, to make the point it was a financial crisis that was being solved without recourse to protectionism and that it stressed the need to transform international institutions related to trade.

In his five sessions with groups of diplomats, he also answered some questions to make a number of points:

* The question of new issues and the future agenda of the WTO was something for the Contracting Parties to decide. But the WTO already has much unfinished business and heavy agenda, and bringing new issues would overload the agenda and strain it.

* The WTO was a rule-based trade system, where everyone big or small had to obey the rules. This should be strengthened and upheld.

To questions about the implementation legislation in some majors being contrary to the WTO rules, Salinas while critical was reportedly somewhat vague in replying to questions about the US planned review process over WTO panel rulings and the threats of withdrawals.

* On the differing roles of the WTO head and his experience as Mexican President where he decided policy for others to carry out, Salinas reportedly made the point that in politics, ninety percent of the time one built up consensus and only in ten percent of cases in Mexico he had to look at different options and give a decision. He saw his role as head of the WTO in promoting consensus.

* As for regional agreements and blocs, Salinas saw no contradiction between them and the WTO global trade system, so long as the regional blocks were not inward-looking.

* Salinas was opposed to establishing in the WTO any trade-social standards link. He was however in favour of WTO discussion of migration issues in terms of factor movements and links to trade.

Trade diplomats who met him, whether supporters of his candidacy or supporters of other candidates, reported that they had been "impressed" by Salinas and found him to have briefed himself well to deal with the issues in a confident way, even if his answers seemed at times to be general and aimed at pleasing everyone.

The diplomats however said the visit, like the visits earlier of his two rivals -- Kim Chul-Su of Korea and Renato Ruggiero of Italy -- has not resolved the deadlock among the three.

The key to a consensus decision, some of the diplomats, lay with the US and the EU reaching an understanding on a common choice.

Before the Salinas' visit, and in the aftermath of the Mexican crisis, trade diplomats here had thought that some way would be found to enable Salinas to withdraw with grace. But after Thursday's meeting many felt he was seriously in the race and that the US, even after the Mexican crisis, is backing him.

In this situation, unless the other two candidates give way, it is difficult to see how the deadlock can be resolved and a consensus decision reached by the target date of 15 February, they said.

Some thought that the US might renew its attempt to get Kim to withdraw and persuade the Asians who are solidly backing him to throw their support behind Salinas, to force a Ruggiero withdrawal.

EU sources, after the Salinas meetings here (in some of which the EU member-country diplomats were there), privately said that if it appeared at the Washington meeting next week (where French Foreign Minister Alan Juppe would be present -- France is occupying the EU presidency -- with Leon Brittan, the EU's Commissioner for GATT), if the US did not withdraw its support for Salinas and persuade him to withdraw, there would be a complete deadlock and search made for a new candidate.

The EU source did not see the US or EU giving way, and in such a situation, all the three candidates would have to be jettisoned for lack of consensus, and there would have to be a search for a new choice that would be acceptable to both EU and US and others.

There are some Europeans who see the EU making a pitch for Leon Brittan himself. But whether he will be acceptable to the US, Japan and the major Third World nations is not clear.