6:20 AM Dec 2, 1994


Geneva 2 Dec (Chakravarthi Raghavan) -- With the United States ratification now in the bag, GATT Director-General Peter Sutherland expects the World Trade Organization to start off on 1 January 1995 with some 100 members on board.

In presenting this assessment at a press conference Friday, Sutherland said that only four countries had indicated that their accession will come only in 1995, and not before end of this year.

The four are: Cyprus, Leichenstein, Poland and Switzerland.

(In case of Switzerland, the ratification/implementation legislation is going through its legislative process, and is expected to be completed by the end of the month.

(According to the Swiss constitution and practice, a referendum can be sought and initiated (with 50,000 signatures) within three months. If there is no such initiative, the Swiss can ratify at the end of that period. But if there is a referendum initiative, one could be scheduled earliest only after the summer or early autumn. Leichenstein, which has a customs and monetary union with Switzerland, has to undergo a similar ratification-referendum process.

(But while facing this uncertainty, Switzerland appears to have won general OECD backing for its bid to host the WTO, with the OECD members agreeing not to outbid each other in offering privileges and immunities to the multilateral organizations, their secretariats and missions, and creating a large privileged group within local communities. In the bidding against Bonn and Germany, the Swiss agreed to several 'sweeteners' in terms of privileges and immunities, and negotiators trying to pin them down have been finding the Swiss clawing back on the promises, in the full assurance that no new bidding game will be there.)

Sutherland viewed the US Congressional votes in the two Houses, as confirming the US commitment to multilateral process, and one that was needed to start off the WTO.

According to the latest count, some 40 countries have either ratified or completed the domestic ratification process, and by the time of the 8 December implementation conference meeting, this number would swell up, and 100 would be a realistic target for membership on 1 January.

While the Europeans would not have completed their processes on 8 December, they would be able to assure the implementation conference that would be on schedule.

Asked about the US ratification being tied to a threat of walking out if there were three rulings in a row against it, Sutherland said: "Everyone can leave the WTO, just as they could have left the GATT. What domestic arrangements any country has for this was an internal matter.

"But I have no worry on this issue," he continued.

"The Dispute Settlement process in the WTO, of a decision-making process to allow panels to take decisions, subject to a review by the appellate body, is such that on no rational analysis can such decisions lead anyone to take the irrational decision to withdraw," the GATT head, a former Attorney-General of Ireland declared.

"It is arrant nonsense to say that the WTO membership involves loss of sovereignty of any nation," Sutherland went on. "There can be loss of sovereignty only if an external body can over-ride domestic laws or legislative procedures. The WTO is no such body; it is only a contract that allows a WTO member which believes its rights to have been violated to retaliate (after going through the dispute settlement process)."

At the same time, Sutherland identified the largest benefit to be the emergence of a clear and secure multilateral system with significantly enhanced trading opportunities in the areas of goods, services and intellectual property. "It will be a system which will allow for the development of the world economy on the basis of rules, a rule-based system which provides assurances of trade security," he said.

The ratification and bringing into being of the WTO would provide a most eloquent answer for devaluing and discouraging protectionism, which in the past, as in the future, "works neither from an economic nor moral point of view."

Asked about the choice of a successor and whether one would be in place by the WTO start-off, and about his own term and contract running till end of June next, Sutherland noted he was not involved in the consultations over selecting his successor and that his term was originally set on the basis that it should be coterminous with the start of the WTO which at that time was envisaged to be 1 January.

He however avoided answering questions whether he would be available for a short-term and stay on until a successor could be found. "At this point that question does not arise at all," he said.

On the negotiations for the Chinese re-entry, he stressed that China was the sixth largest world trading nation and this was a major issue. Negotiations were continuing and he could add little to the statement of the Chinese vice-minister that China wished to conclude substantive negotiations in terms of placing its final offers on the table before the end of December.

Bilateral discussions and negotiations were taking place and would continue next week and Sutherland thought there was some evidence of progress.