8:20 AM Oct 21, 1994
MORE UNCERTAINTIES IN GATT/WTO TRANSITIONGeneva 21 Oct (Chakravarthi Raghavan) -- The WTO Preparatory Committee is due to meet on 25 October, among other things, to set a date for the WTO Implementation Conference, even as uncertainties mount about the WTO ratification by the US and other majors, the choice of a new GATT Director-General to succeed Peter Sutherland and head the new organization as well as manoeuvres and lobbying by candidates for various bodies posts under the WTO. The preparatory committee, which has to take decisions by consensus, has to settle the terms of reference of the various WTO bodies, some of which have to be in place along with the entry into force of the WTO, and agree on criteria or qualifications for selection of persons to man them. These bodies (involving some kind of political appointment) include the Appellate body under the Dispute Settlements mechanism of the WTO, the Textiles Monitoring body under the Agreement on Textiles and Clothing, panel of experts on subsidies (whose expertise would be used by the dispute settlement panels in subsidy disputes). Until very recently, particularly after the Uruguay Round mid-term review, in the run-up to the Brussels ministerial meeting and the post-Brussels negotiating there, there had been a kind of revolving-door, but one-way, job/patronage policy: delegates representing various countries, and involved in many non-transparent, informal consultations among small groups of countries, would be looking for or negotiating to join the secretariat, a process needing their 'acceptability' to the majors. Where the persons concerned have no specific instructions from their government on any stance to take, this process used to enable the secretariat or majors to isolate the opposition. Some countries, as a matter of policy, used not to permit their delegates to join the secretariat during their tenure as negotiators at the mission, and allowed them to do so only after a posting in their capital or elsewhere. In regard to the selection of a successor to Sutherland, the 10-minute consultations with individual delegations that the Chairman of the CPs, Andras Szepesi held on Thursday, would appear to have shown a complete deadlock -- with the three candidates having virtually equal support. Szepesi had begun this second round of consultations in an attempt to persuade delegates to convey their 'second choice' and thus set in motion a process by which a 'winner' in this informal polling could be recommended as a consensus candidate. However, according to some delegations who met Szepesi, the Latin American delegates indicated to Szepesi that they will not provide a 'second choice' name, and that they continue to fully back Salinas. As a result, Szepesi is reported to have told other delegates whom he met that he did not want to ask them their 'second choice', since this would be very unfair to the delegations being consulted and to the other candidates in the race. He is due to hold an informal heads of delegations meeting Monday, but whether there will be any 'breakthrough' then is not clear. Sutherland, who made clear at Marrakesh and immediately thereafter, that he will not be available beyond December, has made clear that this is his final decision and that for personal reasons (connected with the education of his children) he would not continue. As a result, some GATT officials informally even envisage that for a while, the GATT might have no D.G. in place, only a person in charge of the secretariat. As regards the Textile Monitoring Body, the Agreement on Textiles and Clothing (Art 8) says that such a body "is hereby established and shall consist of a Chairman and ten members." It then goes on to say: ""Its membership shall be balanced and broadly representative of the Members and shall provide for rotation of its members at appropriate intervals." There are atleast some six candidates for the post of the Chairman -- including two in the secretariat and others who are or have been delegates to the GATT and dealing with textile issues. There is quite a race among delegations for membership on the TMB -- with the entire the GATT/WTO membership pushing for a place. Under the MFA, the Textiles Surveillance Body was drawn up from the MFA signatories -- exporting and importing. It originally had only three importing members against five exporting countries, and then became a 5-5 body, with ironically Japan (to hit whose textiles and clothing exports the entire regime and its predecessors were began) after it ceased to be an exporting country (and with no import restrictions) having to be found a place on the body. The consultations on the TMB involve how the seats are to be divided -- among the currently MFA restraining countries and MFA exporters and their various classes (LDCs and small suppliers, major exporters, cotton textile exports and those with a variegated fibre exports etc). The US and EU are equating the terms 'balanced' and 'broadly representative', qualifications for the membership, to mean the same. But others argue that 'balance' had to be seen in terms of 'balance' of trade interests in the sector, while 'broadly representative' in terms of some kind of geographical representation. The US also claims the right to have a permanent seat on the new body. The problem for the EU is less -- with now 12 members, and a potential 16 from 1 January, the EU could be represented on the TMB, while satisfying the principle of rotation too. If the US gets a permanent seat, Canada and Japan too would demand one. This would really mean that the 'shall' for rotation is to be interpreted as 'may'. In English legal terminology, 'may' has many times been interpreted as 'shall', but it will be difficult to find a precedence the other way round, and the cosy kind of 'understandings' and 'practices' on which the provisional GATT agreement functioned could be allowed to continue under the WTO only at the risk of destroying the attempts to talk of a 'rule-based system', old GATT hands say. There are those who feel that whatever the 'shall', the US having a permanent seat during the 10-year period before the ATC is abolished (under Art. 9) has to be accepted as a 'reality'. But others are resisting it. The way this problem is resolved, will show whether the future WTO would really function as it is envisaged and spelt out, or whether in its decision-making process (as in the GATT now), it will be along the lines of George Orwell's Animal Farm where he wrote of the animals there: "All are equal, but some are more equal than others".