6:04 AM Jun 17, 1994


Geneva 17 Jun (Chakravarthi Raghavan) -- Consultations on the choice of a personality to head the future World Trade Organization is expected to get under way seriously only after the summer recess, delegations to the General Agreement.

The consultations are being held by Amb. Andres Szepesi of Hungary, the Chairman of the GATT CPs who also heads the WTO Preparatory Committee's subcommittee on Budget, Finance and Administration.

In some initial informal consultations held by him, there appears to be an understanding among key delegates that countries with candidates should put in the nominations by end of July to give time for capitals to make their assessments and preferences.

There are two announced candidates -- former Italian Trade Minister, Mr. Renato Ruggiero and Brazil's Finance Minister and former ambassador to the GATT, Mr. Rubens Ricupero.

Two unannounced candidates are the New Zealand Trade Minister and President Salinas of Mexico.

Though his candidacy is yet to be formally presented, Salinas appears to have received an endorsement of sorts at the Ibero-American summit that ended at Cartegena in Colombia.

Salinas name was reportedly mentioned at that summit, after Brazilian President Itamar Franco had left the meeting (because of news of a bereavement back home), and with no one else objecting got a consensus.

But Brazilian sources say they are not a party to any such consensus and that it would be premature to view the Salinas candidacy as the Latin American choice.

After Ricupero's candidacy was officially presented here by Brazil, US diplomats (who had even ahead of it informally sounding some others about Salinas) are reported to have told key Third World delegates that the US would have a problem in choosing a developing country candidate to head the WTO -- given the concerns in Congress about the WTO and its decision-making processes and the fears there that the developing countries now account for a large majority of the membership and would over-ride the United States.

Mexico has recently joined the Paris-based OECD and has left the Group of 77, but has not graduated itself out of 'developing country' status.

Europeans and several Asians noted that Salinas is backed by the United States, but that the US has been waiting for endorsement of Salinas from the Latin American region first.

Some trade diplomats however are doubtful about the wisdom of choosing as the first head of the WTO, which would be facing more than its share of initial teething troubles, a former head of the State.

There have been some suggestions that if Salinas is not favoured on that ground, the Mexican Trade Minister Jamie Serra Puche could be chosen.

Sutherland, the unannounced candidate to succeed Jacques Delors for the EC President, is known to have told some GATT diplomats that the choice of a head of the WTO would be part of a package deal between Europe and America (and within the OECD) involving choices for the EU Presidency, the Secretary-Generalship of the OECD and the WTO head.

Meanwhile, the WTO preparatory committee's budget sub-committee and the subcommittee on institutional and legal matters (headed by Singapore's Amb. Kesavapani) are consulting on more immediate nitty-gritty issues.

The Kesavapani subcommittee has already asked the GATT Committees on Trade and Development and that on Balance of Payments to look into the provisions in the WTO in their respective areas and prepare some draft terms of reference for the WTO committees to handle these issues.

Consultations are now being held whether the GATT Committee on Agriculture should do a similar exercise in the area of agriculture. Cairns group members are known to have had some plurilateral consultations of their own with secretariat participation to formulate proposals of their own.

The US is known to be attempting to set up similar plurilateral consultations on the TRIPs agreement and the role of the TRIPs Council of the WTO, though its intent is not clear, but can be guessed.

The US is also wanting, in the subcommittee on institutional and legal issues, to frame terms of reference for the TRIPs Council (to be set up under the Trips agreement) which would have the effect of obliging WTO members to notify the Council their proposed legislative and administrative measures and changes in law to conform to the TRIPs agreement. The idea would appear to be to have the Council exercise a monitoring and supervisory role on this not envisaged in the Agreement.

The TRIPs agreement, while it has created considerable obligations on developing countries and would make it more difficult for technological competitivity to emerge in these countries, has still left some leeway to countries -- for example over exhaustion of rights, legal regimes to provide for full scrutiny of patent claims before acceptance (rather than mechanical grant patents on basis of filings in other countries), the use of competition and anti-monopoly laws against IPR holders who use their rights to further the market segmentation and monopolies, use of compulsory licensing, sui generis systems for plant protection etc.

The WTO framework and its agreement do not envisage any such role, but expects signatories to take steps to ensure that their laws and trade policy measures conform to their obligations.

Whether a country has or has not complied can only be brought up and decided multilaterally in the context of the dispute settlement mechanism when any contracting party feels aggrieved with the failure of another to carry out its obligations, and not as a general exercise, one trade official commented.

If it is to be done for TRIPs, why not for Textiles and Clothing and how the US and EC will be complying every year in the integration of this trade, or over US implementing legislation on anti-dumping and subsidy etc without waiting for a cause of action to arise, on even the US S.301 changes and non-changes etc, another trade expert asked?

All these ideas and moves, the expert said, make it even more necessary that developing countries should seek and get technical advice and assistance outside of the GATT/WTO system and secretariat which have an administering, institutional bias and role.

There is need for conceptual and policy-level thinking, as also in the more difficult arena of individual country situations, options and how they should or could further their national needs and objectives.

The WTO preparatory committee's Budget subcommittee is looking among other things at future WTO staffing and secretariat structures and related to it questions about whether the WTO should be asked to take over many of the technical assistance activities for developing countries and begin recruiting the technical personnel in areas where GATT has no expertise or whether institutions already engaged in this area and with expertise should be encouraged and supported to do this.

Asking the WTO secretariat -- with its views and bias of the negotiations and the agreements concluded and a trade theory ideology, preached but not practised in the industrialized centres and the responsibilities cast on it in administering the various complicated Uruguay Round agreements -- to set up a technical assistance programme might not be the wisest thing for developing countries.

With several of their development options, options that the industrialized countries had exercised to achieve their present situations, closed off, individual developing countries and their collectivities would need to look at the 'autonomous space' and the choices still available to them after the Uruguay Round and see how best they could design domestic policies and regimes that would not tilt the balance even more in favour of the global transnational corporations and against their own public.

This trade and development experts feel is the issue to be faced.

In the area of intellectual property questions, the World Intellectual Property Organization (WIPO) has considerable expertise and ongoing technical assistance programmes to help developing countries in the areas of setting up and administering intellectual property regimes for the Paris and Berne and related conventions. Asking the WIPO to undertake also the task of helping developing countries to design laws to conform to the new obligations under TRIPs would make more sense than establishing an elaborate technical expertise in the WTO, some developing country delegates agree.

Similarly, UNCTAD has been engaged in and is mandated to provide technical assistance to developing countries in fashioning their trade policy regimes and in the area of development of their services sectors.

Until the Brussels meeting in 1990, UNCTAD had also successfully run a technical assistance programme, funded by the UNDP, to help the developing countries in the negotiations.

Before the UNCTAD programme was set up, there was resistance and opposition to it from the North.

The World Bank (with its funding resources and profits, coming out of interest on loans to the developing countries) made a big pitch to set up a technical assistance programme. This was also favoured by the US at that time, since it would have meant shaping developing country negotiating positions in accord with the Fund/Bank ideologies of promoting the interests of TNCs.

The GATT secretariat too wanted to run the programme itself to influence the developing world capitals, and the Europeans who had question marks over the World Bank thrust (because of its stand on agriculture) favoured the GATT secretariat.

But the stand of the developing world at that time made the choice of UNCTAD and thus the possibility of independent and pro-developing country advice possible.

Two areas where the UNCTAD programme, and the expertise brought to it with outside consultants, that enabled the developing countries to have a common position and secure 'space' in 'TRIMs' (traded-related investment measures) and in services.

This was almost achieved on TRIPs too, until the US through S.301 threats applied pressures at capitals on trade ministries who pulled the ground from under their own intellectual property negotiators. But for this, the TRIPs agreement need not have become so completely asymmetric as it now has emerged, closing many options for developing country industrialization, they said.