10:51 AM Feb 20, 1997


Geneva 20 Feb (Chakravarthi Raghavan) -- The former Director-General of GATT, Mr. Arthur Dunkel of Switzerland, has been named to head the three-member WTO dispute settlement panel to rule on the EU-US dispute over the Helms-Burton law, imposing US economic and other sanctions against those dealing with Cuba.

The two other members named to the WTO panel are Mr. Tommy Koh of Singapore and Ambassador at large of his country and Mr. Edward Woodfield of New Zealand, a former high trade policy official and negotiator for his country, and now an independent trade policy consultant.

The choice of the panellists implies a political, rather than a narrow trade approach.

The three were named by the head of the World Trade Organization, Mr. Renato Ruggiero, following the inability of the United States and the European Commission to agree on the panellists, and the EC asking Ruggiero, under the rules, to name the panel.

Paragraph 7 of Article 8 of the WTO's Dispute Settlement Understanding provides that if the parties to a dispute are unable to reach an agreement on the panellists within 20 days of the establishment of the panel, at the request of either party the Director-General, in consultation with the Chairman of the DSB and of the relevant Council, shall determine the composition of the panellists.

The EC had made such a request, and the deadline for such naming was 14 February, but was put off at the EC request to enable further bilateral talks, which were held earlier this week at Brussels (where the US Secretary of State, Mrs. Albright was for the NATO talks) failed.

But this dispute, and the claim of the US that it was in pursuance of its 'essential national security' and thus beyond challenge at the WTO, has attracted much wider concerns than the trade with Cuba.

This is because of the tendency of the US Congress to assert US reach beyond its frontiers, and use trade and economic sanctions against third parties -- for e.g. their dealings with Iran and Libya, and some of the states in the US taking it further and providing trade and other sanctions on a variety of human rights and other considerations.

Of the three panellists, Dunkel during his entire tenure as GATT head had tried to promote US-EC understanding and in the Uruguay Round negotiations.

Mr. Koh has been less involved with trade law and policy, though he was a principal advisor of his country's Trade Minister when he chaired the Singapore Ministerial Conference of the WTO and held the private consultations on the Ministerial Declaration. Koh has been more involved in his career with the United Nations and its economic and political sectors. He headed the Third UN Conference on the Law of the Sea (1981-82) and Chairman of the Preparatory Committee for the UN Conference on Environment and Development.

All the three have been closely associated with wider United States and European political, economic and strategic policies, and so neither side would be able to point easily a finger at them.

And both Dunkel and Koh are more prone to a conciliatory role to promote an accord, but this may come in the way of their panel roles.

The naming of the three to what WTO officials see as a 'hot potato' for the organization in a dispute that has attracted high political visibility may not really 'cool' the clash. The issues raised go beyond a US-EC fight, and any ruling. In the long-term the effect on outside public opinion may be as important.

The panel has six months to give a ruling. The US has said it won't participate, since its action is for security considerations in which it alone is the sole judge.

But it seems likely that both sides will strive to reach a bilateral settlement, rather than allow the issue to be decided by a ruling.

In a statement issued in Brussels, EC trade Commissioner Leon Brittan said that the EC still aimed at a negotiated settlement and the naming of a panel was only a procedural step. Brittan said that he believed that in the intensive discussions with the US over the last few weeks, "good progress" had been made regarding the extra-territorial aspects of the US legislation.

And while these had not yet produced an outcome that the EU considered sufficient to suspend its action before the WTO, he was determined to remain in close bilateral contact. The nomination of the panel was only a procedural step. The fact that the panel was now operational "in no way limits our ability to continue bilateral negotiations, and further clarification, examination and discussion are needed."

"It will remain our aim to achieve a negotiated settlement, and of course the Panel procedure can be halted or suspended at any time if the parties reach agreement."