6:01 AM Jul 13, 1994


Geneva 13 July (Chakravarthi Raghavan) -- A decision on the headquarters of the World Trade Organization, is expected to be reached by end of this week, or latest by 22 July when the WTO Preparatory Committee is to meet before recessing for the summer.

GATT delegations say that while Germany is making a strong bid to attract the WTO to Bonn, whose large office space and buildings and other facilities would be empty when Germany's capital moves to Berlin, Geneva seems more likely to win.

But a Swiss diplomat Wednesday complained at a press conference of "unfair" German tactics on the WTO headquarters, giving the impression the Swiss are not so sure about the outcome.

The Chairman of the GATT Contracting Parties, Andres Szepesi of Hungary, who chairs the WTO Preparatory Committee's Sub-Committee on Administrative, budgetary and financial matters has been holding consultations with GATT delegations on the choice of a headquarters for the WTO.

The decision about headquarters technically has to be taken by the World Trade Organization when it comes into being. But ahead of that the WTO Preparatory Committee, set up at Marrakesh, has been mandated to prepare recommendations for the WTO bodies and take any unavoidable decisions, atleast provisionally, earlier.

The headquarters, and now the choice of a Director-General of GATT (who would become the WTO head), are two of these. Both are being handled in consultations by Szepesi who is to make his recommendations to the Budgetary Committee and in turn to the WTO Preparatory Committee, which has to take decisions by consensus.

At its first meeting after Marrakesh, the WTO Preparatory Committee agreed that a decision on the headquarters must be reached before the summer recess, to enable adequate arrangements to be set in motion in time for the WTO's entry into force.

Szepesi has indicated that he would want to ready a recommendation which would command consensus by Friday, in time for the Preparatory Committee's meeting next week.

Germany and Switzerland have been revising their original offers of facilities and the privileges they would accord to the WTO secretariat officials and missions accredited to the WTO.

The economy of Switzerland, and the Geneva canton, gain considerably by the presence of the international secretariats and the staff working and living here (excepting for the citizens of the EC member states, and some of the former French colonies whom the French permit to stay in neighbouring areas of France, with diplomatic privileges).

And with the Swiss having spurned in two referenda closer association and/or membership in the UN, and the general xenophobia towards foreigners in Geneva and neighbouring cantons, any decision to move the headquarters of the successor to the GATT could set off a chain reaction of sorts.

Hence the Swiss, in discussions with the diplomatic community, has twice revised upward its offers, and has been meeting regional groups of developing countries.

Ever since Germany, after reunification, decided to put its capital in traditional Berlin, the Bonn government has been looking for ways to attract UN organizations to Bonn.

Its efforts to get the UNDP and UNICEF (both headed by Americans) failed when the two organizations decided that their close work with the United Nations required their presence at New York.

Germany at Marrakesh aired its interest in hosting the WTO, and since then followed it up with official offers, and has been revising them, forcing the Swiss in turn to do so.

The German government has also been lobbying the delegations and capitals. It took a group of GATT delegation heads last week to visit Bonn -- where though the delegates found the conference room facilities would be inadequate.

The Swiss and German offers and revisions range from building or extending the headquarters building and conference room facilities that the new WTO would need -- far beyond those of the present GATT housed by the side of lake Geneva at Centre William Rappard.

The GATT's current headquarters arrangements are part of the UN headquarters arrangement with Switzerland. The GATT and its secretariat's legally function as the secretariat of the UN's 1948 Interim Committee for the International Trade Organization.

To get the support of developing countries, Germany has offered free office accommodation to Least Developed Countries and, reportedly, is willing to extend it to most of the other developing countries.

The Swiss have offered such accommodation to the LDCs, if its bid to host also the environment organizations (the secretariats of the Climate Change and Biodiversity Conventions) materializes.

Anything that the Swiss do for the WTO would have to be extended to other organizations.

The large army of international civil servants in Geneva, whether those of the GATT, the UN or of the specialized agencies, all have become involved in this lobbying to get the 'most' out of the Swiss in terms of privileges and facilities, and lobbying their delegations on this matter.

In fact it is difficult to come across a clutch of secretariat officials these days who are not discussing the relative merits and the kind of privileges they should get from host governments, not only when they are employed, but when they retire too.

Discussions among some diplomatic missions too tend to run on such lines about their tax-privileges, house-servants (whether they have to be paid Swiss wages) etc.

And while Bonn and Berne are trying to outbid each other and lobby capitals on these, Geneva may win over Bonn, some of the key delegations say, because of the value of informal interactions for them with the other UN organizations and agencies in Geneva.

Several of the missions and their heads also represent their countries before other organizations, even if there are specialists within their missions dealing with each of them. Delegates all share common infrastructures of their diplomatic missions.

And shifting to Bonn, would place the smaller countries and delegations at a disadvantage, cutting them off from the mainstream of multilateral activities. Only the majors, particularly the EU, Japan and the US would benefit: their missions can more easily coordinate activities in various bodies.

Though Germany has been making some very attractive offers, including provision of free office accommodation to the least developed country missions, many developing countries delegates say that headquartering the WTO in Bonn would mean that they would be forced to establish a separate infrastructure there for their missions and their own work would be cut off from work in related organizations in Geneva -- UNCTAD, WIPO, ILO etc.

And at the rate at which the US and Europeans want to load the WTO agenda via the 'trade-related' route, every facet of WTO activity would have some relationship to those in other UN bodies.

One Third World diplomat in a sarcastic way suggested that perhaps the WTO should first address the 'harmonization' of 'offers and facilities' by countries offering to host.

In the consultations that Szepesi has been holding with individual delegations, according to GATT sources, developing country delegations seem to be favouring Geneva over Bonn, though they have been careful not to disclose their views so far.

The Member-states of the European Union are divided, and the EU's Commission which represents the EU at the GATT has left it to individual States to convey their own views to Szepesi.

The United States and Canada have reportedly not made up their minds or have not disclosed it.

Meanwhile, a Swiss delegation spokesperson, Francois Norman, at a press conference on Wednesday complained bitterly of Germany's "unfair tactics" in seeking to get a decision on the WTO headquarters in favour of Bonn.

The Swiss diplomat was particularly critical of the German delegation which had prepared a comparative analysis of the Swiss and German offers and made it available to the media and to various GATT delegations.

Other GATT delegations said that part of the Swiss concern and worry perhaps is that German Chancellor Helmut Kohl might be seeking the support of the United States and President Clinton in favour of Bonn as WTO headquarters -- a move that might help the United States and its efforts to remove the WTO, its officials and diplomats accredited to it away from any UN system influences.

The visit of President Clinton to Germany, and his remarks at Berlin are being interpreted by many as indicating a subtle US balance of power game in Europe and trying to use Germany inside the EU against France and other Europeans.

The Swiss diplomat, in charge of host-country relationships with UN system organizations and diplomats, indicated that the various improvements in conditions for international staff and diplomatic missions that Berne had put forward in trying to keep the WTO in Geneva might not remain on the table if a decision to go to Bonn was taken.

While Germany, in making offers, has only to consider its costs visavis the WTO and the missions accredited, the Swiss who are host in Geneva to other UN organizations and specialized agencies would be forced to extend any facilities they provide to the WTO to others too.

Meanwhile the WTO Preparatory Committee's Sub-Committee is also considering other issues including the budget for the new organization and the assessment.

Committee sources said that the share/benefits of countries in the entire Uruguay Round accords would provide the basis: shares of each member in the goods and services trade, as established in the IMF balance-of-payments data, and the share of intellectual property registrations on the WIPO registry.

This is expected to result in the United States, and France, Germany and Italy within the European Union, having to pay higher budget shares in the WTO than they do now in the GATT. Their contributions are expected to increase by 25 to 30 percent.

The US and EU bids to keep budget contributions on current GATT basis (share of world trade in goods) was not acceptable to many others. But the initial year's contribution to the WTO might be kept on that basis, pending a proper assessment, committee sources said.