DG, DDG compromise at WTO this week?

by Chakravarthi Raghavan

Geneva, 20 July -- The WTO General Council was moving Tuesday towards a consensus package of decisions for appointing Mike Moore and Supachai Panitchpakdi to fixed 3-terms each in succession, and for appointment of deputy Directors-General by Moore in consultation with WTO members, and taking into account views of Supachai.

After nearly 3-hours of discussions and comments at an informal General Council meeting, the chairman, Amb. Ali Mchumo of Tanzania, wound up the meeting, expressing the hope that the decisions could be formalised this week, and there would be no attempt to change individual parts of the package that may unravel everything.

The compromise, likely to be formally adopted later this week, will bring to a close more than ten months of a contentious and bruising fight for the job that has hurt both candidates, and brought glaringly to the public attention the kind of manoeuvres, and non-transparent and manipulative decision-making processes at the World Trade Organization.

As Brazil's ambassador Celso Amorim commented to the media outside the informal General Council meeting, the WTO is like any other international organization, with a membership and a voting process for decision where a consensus is not possible. But it is sought to be run on the lines of a private club -- the old GATT, a provisional treaty that came into being in 1947 among a small number of countries. It is this structural problem that needs to be resolved.

Another Third World diplomat said the compromise is such that while the 'monopoly' of industrialized countries or Europe over that office has been broken, an office which was intentionally left without any power (by all key countries who negotiated the draft Marrakesh agreement for WTO in Nov-Dec 1993), but perhaps only to exercise some influence, has been diminished further.

In effect both Moore and Supachai will be "lame-ducks" to start with, the diplomat said. And while either of the designated persons as WTO Director-General, by individual capacity and ability, can still bring to bear on members an overall perspective for an organization being assailed from all sides, it would not be easy.

The one good thing, and a substantial achievement for developing countries, is the acceptance of the idea of geographical balance (common in other UN system organizations, but ridiculed so far at the GATT/WTO) and a decision to ensure that, unlike now when deputy Directors-General are being seen as "creatures" of the DG, the loyalty of future deputies would be to the institution and the General Council.

But if developing countries have been able to achieve this at the WTO, perhaps not a little thanks is due to the United States and the Washington political leadership and trade bureaucracy, as well as its trade ambassador and deputies in Geneva. It was the ham-handed way that they pushed for the election of Mike Moore (and much before for New Zealand nominating him), and the attempts at manipulating the final outcome that brought about this outcome.

A draft decision, evolved by Bangladesh and Australia over the past several days -- in the light of consultations with key countries -- and discussed at an informal General Council meeting Tuesday -- is expected to undergo some slight drafting changes and brought up before the Council for adoption, perhaps Friday.

Several points and difficulties of members are expected to be reflected in a chairman's statement, but the essential parts of the compromise package, negotiated among key countries over the last couple of weeks, are expected to remain.

While almost every member had some problems with one or the other part of the compromise, there was a general willingness to go along with the "package" evolve on the basis of its being "least bad".

The compromise decision for Moore and Supachai, the two contenders, getting 3-year terms in succession, but with no possibility of extension of any one's term - had been widely reported since the APEC trade ministers meeting in Auckland, and so has been the Supachai acceptance for Moore to take the job first.

What is new in the package are the provisions relating to the appointment of the Deputy Directors-General.

And while interventions and comments of some, particularly of Hong Kong China, sought to separate the compromise over the choice of a Director-General with those on the deputies, by the time the informal council ended Tuesday around lunch time, it was clear that it was a package and would go through only as such.

Some room was left for consultations and decisions in September on the number of deputy directors-general and their term of office, but not on the other ideas in the compromise about the appointment, namely, that before appointing the DDGs, Moore would not only have to consult the members (an euphemsitic way of saying that he has to ensure that no one would have strong objections), but also that the views of Supachai as Moore's successor would need to be taken into account.

Also, the appointment by Moore has to bear in mind the principle of geographical representation.

At the time of the appointment of Mr. Renato Ruggiero to the office in 1995, the decision provided for four deputy directors-general. A year or more ago, there was a move to reduce the number to two, and consultations were being held among members, when decisions were put on hold, even before the decision to invite nominees to success Ruggiero, at the instance of the United States (which wanted to see about the selection of a DG and the candidate who would take the job), and to ensure that a US national would always have a deputy's job.

In the bruising election campaign that followed, and more so as the choice narrowed down to one between Moore and Supachai, charges of deals and posts being offered to countries, have been bruited about.

And Tuesday, even as the informal General Council was debating the compromise, trade diplomats outside were mentioning various names as deputy directors-general (on the basis of names of Moore supporters).

There were also some suggestions that since Moore is from the Asia-Pacific Economic Forum grouping, the deputies would come from the US, Europe, Africa and Latin America.

However, on 30 April, in commending Moore and the geographical spread of his support, Mchumo and the Swiss envoy Rossier (as facilitator) did not consider him to be part of Asia, but Oceana, to underscore his support in Asia.

And in the UN system and agencies, New Zealand and Australia (and Israel) are part of the group 'West Europe and other States'

If Moore is now to be identified as from Asia-Pacific, and the APEC logic is to hold, then any US national, an APEC member should also be automatically ruled out, one Third World diplomat commented.

Others said, there is need for balance at the top management levels, and for representation of a deputy each from developing countries of Asia, Africa (long neglected and denied any role) and Latin America.

A European diplomat commented that they would end up ultimately at 5 or 6 deputies perhaps.

An observer noted that in the 1980s, when a US-supported Filipino was elected as Director-General of the UN Industrial Development Organization, the US brokered compromise involved 5 or 6 deputy directors-general for UNIDO - with the US later turning around and blaming the UNIDO for top heavy administration and wastage.

The draft before the General Council would also have as part of the Council decision that in March 2002, the General Council is to reaffirm the availability of Supachai for the office and, if he is not available, to commence immediately the process for appointment of a new Director-General, with one of the Deputy Directors-General to be appointed by the General Council as acting Director-General if the appointment process for a successor DG is not completed by 1 Sep 2002.

Pakistan has suggested a drafting change to say that if Supachai is not available, the successor should come from a developing country. But it was not clear whether this would be in the final compromise text that would come before the formal General Council.

The compromise provides that in the event of Moore vacating office prior to 31 August 2002, he shall be followed immediately by Supachai, who shall serve for only three years.

The compromise package also provides that "the Director-General shall appoint Deputy Directors-General in consultation with Members, taking into account the views of the other designated Director-General, and the need to maintain equitable geographical balance and being bound by any decisions of the General Council with regard to ensuring continuity at the senior management level of the Organization."

While the substance of this is part of the package, some drafting changes are to be made - whether it should be geographical rotation/balance or balance between industrialized and developing countries.

A final para of the compromise package provides that the decision "shall not constitute a precedent for future appointments of Directors-General and resolves that, in order to improve and strengthen the current rules and procedures, a comprehensive set of rules and procedures for such appointments shall be elaborated and adopted by the end of September 2000."

A provision to be added will also clarify that though Moore and Supachai are each to get 3 years, the term of office of a successor DG is to be set at four years (as now).

At one stage in these prolonged consultations over a split-term compromise, it was reported that the two candidates were not entirely happy with the outcome, but neither were in a position to lay down their terms.

Along with the issue of the number of DDGs and their term, to be taken up by Chairman Mchumo in September (by when the new DG would be in office) perhaps may also be the suggestion of Morocco and one or two others that "conflicts of interest" ought to be avoided, and ethical standards set, by requiring lapse of two years before anyone working in a country mission to the WTO, being appointed as DDG.

While this seemed aimed against a widely mentioned Moore choice, Mr.Andrew Stoler Deputy chief of the US mission, for his part in what others allege is 'dirty campaign' waged on Moore's behalf at an early stage, the Bangemann effect (of the EC Commissioner Bangemann joining a private telecom enterprise, raising within Europe outrage over the ethical issues) is also probably at play.

Mr. Renato Ruggiero, who demitted office in end April as Director-General, and who during his term promoted the interests of business and transnational corporations, is known to have now joined as head the Italian state petroleum enterprise ENI.

Mr. Sutherland his predecessor, who left a lucrative private sector job in 1993 to take on the post of GATT director-general, on demitting office went on to join a Wall Street investment bank and financial enterprise.

One of the points of the compromise, a preambular paragraph, that is to be eliminated (at the suggestion of Brazil and Pakistan) was the attempt to affirm, despite the horse-trading compromise that has emerged, that the outcome is on the basis of principles of transparency, fairness and equity.

As Pakistan's ambassador Munir Akram, reportedly told the informal meeting it was "like a person in a house of ill-repute, preaching the virtues of chastity."

Another change in the draft is to provide that while Moore and Supachai are each to get a non-extendable 3-year term each, in respect of the successor, the WTO would revert to the practice of 4-year terms.

The compromise decision to be adopted by the Council (if consultations show consensus) would provide for the appointment:

* of Mike Moore of New Zealand as Director-General for three years from 1 Sep 1999 to 31 Aug 2002;

to be followed by

* Dr. Supachai Panitchpakdi of Thialand as DG for three years from 1 Sep 2002 to 31 August 2005.

Neither "shall be eligible" for reappointment as Director- General.

While the principle of equitable geographical 'balance' or 'rotation' or 'representation' is well accepted in the system of the United Nations and its specialised agencies, the old GATT and the WTO since 1995 have been seen as 'fiefdoms' of the industrialized world and the majors. It has been straining credulity that the overwhelming preponderance of nationals of Europe and North America, at senior staff levels has been sought to be away as due to "recruitment on merit".,

At the informal meeting Tuesday, after the Bangladesh ambassador, Iftekhar Ahmed Chowdhury, introduced the latest draft (that had been circulated Monday evening to delegations), Brazil's Amorim said his country did not like the solution, as it raised issues about legality and precedents, but would not stand in the way of a consensus. He wanted it to be clarified whether it was a 6-year term, being split between Moore and Supachai, or a 3-year term for each. It should be specified that this would not be a precedent and the future DG should have a fixed 4-year term.

Argentina supported Brazil, while New Zealand praised Australia and Bangladesh for their 'courageous efforts'.

But Morocco's, Amb. Nacer Benjelloun-Touimi expressed his concern over the 'systemic consequences', but that he too would not stand in the way of a consensus. The text should specify, he said, that there should be no more than 4 DDGs, as currently provided, and there should be geographical balance, with one of them drawn from Africa.

Amb. Rita Hayes of the United States welcomed the compromise and wanted a decision to be taken so that members could turn their attention to the preparatory process for Seattle.

Japan's Amb. Akao said that the compromise should specify that there should be no more than 2 deputies. Japan did not like the idea of "geographical balance", but felt there should be a balance between the industrialized and developing world.

Mchumo at this stage suggested that he would consultations on DDGs in September, when members come back from summer holidays.

This gave rise to some confusion whether his consultations would be on the number of posts, or the entire compromise in that paragraph.

Hong Kong's Stuart Harbinson had some problems with the paragraph about deputy directors-general (geographical representation, and other details of the selection), and suggested the compromise over the DG need not be held up by this. The European Union's Amb.Rodrick Abbot suggested that to avoid further delays, the paragraph may be omitted

However, India's Amb. Narayanan, Pakistan's Amb. Munir Akram and Benjelloun-Touimi and several others stressed that the draft was a compromise package, and had to be adopted as such.

While Harbinson said that his views were on instructions from his government, India and others suggested that he should consult his capital again on the matter in the light of views of others. (SUNS4481)

The above article first appeared in the South-North Development Monitor (SUNS) of which Chakravarthi Raghavan is the Chief Editor.

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