8:30 AM Mar 24, 1995

RUGGIERO APPOINTED WTO DIRECTOR-GENERAL

Geneva 24 Mar (Chakravarthi Raghavan) -- Former Italian Trade Minister and EU nominee, 64-year old Renato Ruggiero, at last attained his nearly year-long quest for the top job at the World Trade Organization, when the WTO General Council Friday morning formally elected him Director-General of WTO/GATT to succeed Peter Sutherland who has been holding that post since 1 January.

Ruggiero will serve a four-year term beginning 1 May, as part of a complicated deal that gained him this job, but in a process, as one trade official put it Thursday morning, that has brought many ghosts into Centre William Rappard on the lakes of Geneva (the headquarters building of the WTO/GATT) that may not be easily exorcised -- not even by a collectivity of heads of many religions.

In the long process of bending rules and procedures, by recourse to consensus to set them aside on the ground of 'pragmatism', the meetings of the General Council of the WTO, created by the Marrakesh treaty, to be a rule-based organization (to depart from the old provisional treaty GATT ways), was convened and held without the normal 10-day notice for such emergency meetings, and approved the Ruggiero choice and implicitLy the deals that made it possible.

The short-notice meeting to push them through was at the instance of the US, the EU and some others in the 'power structure', who were afraid that the deals they had done could unravel if the formal decisions were not made quickly.

The formal actions followed the acquiesence of the deals Wednesday evening (in a small clutch of key delegations), and the summoning of an informal heads of delegations meeting for Thursday for putting it through -- even before Ruggiero came to Geneva and met the Chairmen of the WTO General Council and the GATT CPs.

The US backed Mexico's Carlos Salinas -- and creating a regional bloc endorsement for this -- and opposed Ruggiero, questioning his credentials for the job quite some months, in a power play against Europe, which too drew on its dependency association agreements in Europe and Africa and Caribbean to line up support behind Ruggiero.

But left with few options on Salinas withdrawal (in the wake of the Mexican economic crisis and arrest of his brother), and faced with an inevitable Ruggiero choice, the United States and its Trade Representative Mickey Kantor 'hijacked' the Ruggiero candidacy, by making Ruggiero go to Washington Tuesday as a condition to get their formal backing and by pushing through a deal with the EU and Ruggiero to "sweeten" Kim's withdrawal.

Even US officials here, and in Washington, are known to have been quite unhappy with Kantor's handling -- both throwing US behind an unsaleable Salinas candidacy and then in the deals struck and announced from Seoul and Washington.

The deals were conveyed by the principals to others here only Tuesday afternoon and accepted next evening at a small clutch of key delegations.

On Thursday, ending what the WTO General Council Chairman, Amb. K. Kesavapani of Singapore characterised a "traumatic experience", WTO/GATT envoys at an informal heads of delegations meeting, agreed to the Ruggiero election, and the various 'understandings' -- not all of them clearly spelt out, but known to all the envoys -- and set in motion the processes to name his rival, Kim Chul-Su of South Korea to a fourth deputy director-general's post.

The Kesavapani statement (carefully worded in prior consultations), and which was gavelled into an understanding of the HOD, said:

"To better reflect the increasingly global nature of the WTO membership, an understanding has been reached that the next DG would be a non-European.

"Another understanding reached was on the creation of one more DDG post in the GATT/WTO secretariat, in addition to the three existing DDG posts. We therefore recommend that the necessary measures to create such a position and to make the appointment be taken immediately by the Budget Committee and the new DG respectively.

"We have been informed that the interests and concerns of some regions, particularly the African region should be taken into account."

But the deals did not go unchallenged -- with the Africans, and the envoy of Kenya complaining of Africa's 'total marginalisation' in the secretariat, the Latin American view that the 'regional considerations' must be taken into account in all future appointments at all levels, and strong rebuttal of these tendencies by Switzerland, New Zealand and the EU itself which collectively, and its leading States, has been trying with the US to re-establish the trans-Atlantic alliance and create a duopoly over the international economic organizations.

The Swiss ambassador, in a clear reference to the creation of a fourth deputy's post to accommodate Kim, expressed serious concern at the way the management structure has been used to attain objectives alien to management and claims have been advanced by more than one regional group for recruitment to the secretariat. He added: "There can be no automatic preference for any group of people, wherever they come from".

Supporting these views, the New Zealand delegate, said the management structures should not be used to accommodate "unfulfilled aspirations".

EU's Amb. Jean-Pierre Leng spoke in terms of Ruggiero's nomination and election because of his merits, and not because he came from Europe, and added that no region in the world could have a monopoly of talent and good candidates and "we should consider all candidates from all regions".

In an attempt to satisfy the Africans -- who felt that though they had supported Ruggiero from the outset, they had been let down without anything in the 'job sharing' -- an understanding was sought to be worked out for an African to be made a Deputy Director-General, when on 31 July 1996, all the three existing Dy. D.Gs posts fall vacant.

However this 'done deal', as one of them described it Wednesday morning, unravelled somewhat as the Latin Americans, and then the Europeans too became concerned and balked at it.

For the EU, with Ruggiero in only for a four-year term, ending 1999, the deal would have meant no one from it at the top management, if the posts are filled in 1996 by other regions.

In the complicated last-minute Thursday consultations, hurrying from one group to another, Kesavapani, showing signs on his face of a feeling of harassment and perhaps disgust, ultimately managed to put together a formulation to end what he later called at a press conference "this traumatic experience" that should not be repeated again.

At the HOD meeting, (after comments from the floor critical of the understandings and deals) Zahran made what he called a "final point".

"You would no doubt agree," he said "that the search for Mr. Sutherland's successor has been too long and traumatic. We should avoid a repetition of such an unhelpful occurrence in the future. Amb. Kesavapani and I would like to suggest that at an appropriate point in time, we should start consultations on devising a process which would enable member-governments to take collective action on this matter. We should take note of the many useful suggestions that have been made by our colleagues and in the media".

Some of the envoys privately have been arguing that the procedures put in place in 1986, to ensure transparency and democracy, could not be faulted, but what perhaps needed to be looked into is how to avoid the 'consensus' being used to block decisions in such matters.

But it was clear after the meeting that no one was really satisfied or happy -- except perhaps for Korea which managed to get at long last a Korean national in a top management post in an international organization. Even the diplomats of countries principally involved in the deal did not seem to relish its implications and consequences.

The Kenyan ambassador, Daniel Don Nanjira, told newsmen outside that Africa was only committed to Ruggiero's election and nothing else. Inside he twice took the floor apparently to complain of the total marginalisation of Africa and need for African representation in future appointments to the secretariat. Later, when the Latin American delegations called for regional representation at all levels, the Kenyan did the same for Africa too.

In the statement to the informal meeting by Kesavapani (as Chairman of the WTO General Council) and Egyptian Ambassador Mounir Zahran as Chairman of the GATT Contracting Parties, Kesavapani announced that after a nine-month contest "involving three candidates of high calibre", Ruggiero was the consensus choice of GATT CPs and WTO members to be Director-General of the GATT/WTO for one four-year term.

The statement spoke of Ruggiero's "hand-on-experience" in international matters related to international trade, including his active participation in the Uruguay Round negotiations, his "unambiguous support" for an open and liberal trading system and his "rare combination of political expertise and managerial skills" which the WTO head "will particularly need in the years ahead."

Building on the inheritance of his illustrious predecessor, Peter Sutherland, Kesavapani said, Ruggiero would "among other things have to accomplish the most immediate tasks of establishing the Secretariat of the WTO on firm ground, organizing its structure, ensuring its smooth functioning, assisting Members in determining the priorities of the WTO for the future, and in projecting a meaningful and constructive role for it on the world scene".

At the WTO General Council's formal session Friday, the African delegations repudiated any responsibility for importing 'regionalisation' into the WTO. Speaking for the African group, after the formal appointment of Ruggiero by the WTO General Council, the Moroccan envoy noted that the Africans were being accused of introducing regionalism.

"We did not ask for the creation of a third Deputy D.G.'s post," he said, referring to the creation of that post, and its being filled by a candidate from the Latin American region (Mexico's Jesus Seade) when Sutherland was elected, after three nominees from the Latin American region withdrew.

(At that time, it was agreed to have a Latin American in the hierarchy, and Sutherland looked at the candidacies proposed and interviewed some before Seade was named).

"We did not ask for a fourth deputy's post now either," the Moroccan went on, in a reference to the creation of the post for Kim. "It is not our request," he said. But once it was done, "we want to say that next time a vacancy arises, our aspirations should be considered. The charge of regionalism against us is hence unfounded."

Brazil, speaking for the Latin American and Caribbean group, said that in the future appoints all regions, including Latin America, should be given equal consideration.

Earlier, both Switzerland and Canada formally deplored the introduction of regionalism and geography in recruitment - a view that the EU endorsed.

Many envoys and observers showed some sympathy for the African concerns and noted at the beginning the African countries did not make any specific demands, but felt let down when the Europeans who had applied pressure on the ACP countries to secure their support for Ruggiero, then cut deals with the US, ignoring them. Others noted that Americans and the Europeans show no qualms when claiming as of right, the top jobs at the World Bank and the IMF -- even though the budgets and expenses of these organizations now are paid by the developing world through the interest it pays for funds. Nor did they in the mid-80s, when the UNIDO was transformed into a specialized agency, fight shy of increasing the number of deputies to the D.G. to for their nationals to have a seat in the management structure.