SUNS #4432, Monday, 10 May 1999

More reflection, consultations on WTO DG choice

Geneva, 7 May (Chakravarthi Raghavan*) -- After nearly six hours of further discussions, on substance and procedures, held on Thursday 6 May, the General Council of the World Trade Organization was no nearer choosing its next Director-General, and the chairman, Amb. Ali Mchumo of Tanzania, has recessed the meeting for further reflection and consultations.

But a number of supporters of Supachai, including Japan, Hong Kong China, India and others said that in their view the "management" of the process -- with facilitators Lafer and Rossier, and then from February by Chairman Mchumo and Rossier for naming a Director-General -- that began in July 1998, had ended with Mr. Mchumo's report of 30 April, and the Council was now in the 'decision-mode' and any consultation by Mchumo had to be on that.

There has been no indication of when the next meeting will be held. While there was some talk of a meeting next Wednesday (12 May), given the normal Ascension holidays in Europe and other meetings elsewhere, it seemed more likely that consultations would be held and a meeting convened in the week of 17 May.

There were no official briefings at or after the 6 May Council meeting, though like the process, this merely seems to have driven "underground" media briefings by trade officials and delegations, though some of the last spoke freely to the media outside the meeting room about what they had said inside.

One of those who did, Amb. Alejandro De La Pena of Mexico, said the problems facing the Council was due to the failure of the members to clearly specify the procedures and processes, well in time before a vacancy in the office and before any candidate or candidatures were likely. Instead, after the 1986 Contracting Parties decision, there had been no attempts and a rules-based organization seemed to be attempting to function without rules. "We are now making a spectacle of ourselves and we as members ought to be ashamed," he said.

While the tone of the meeting Thursday was set by the conciliatory statement of Mchumo and his appeal for "calm and friendly" consideration of the issue, and US officials had indicated half-way through the meeting that delegations were trying to re-establish mutual communications and dialogue that had completely broken down, by the time the meeting ended Thursday night, it was not at all certain that the initial tone was prevailing.

There are meetings over the weekend in Berlin of the EU Council of Ministers, for preparing a mandate to the Commission for Seattle, but whether the divided EU would be forced to focus on the D.G. issue remained uncertain. Next week (during the Ascension holiday period in Europe, when the WTO normally recesses), the Quad countries (Canada, EC, Japan and the US) are due to meet.

The D.G. issue has found all regions, and regional groupings, divided, but the manner in which the US was aggressively pushing the candidature of Michael Moore over that of Dr. Supachai is strengthening the public perception of a North-South divide, and a US effort to dominate the WTO with an industrialized country national of its choice. Beyond some unofficial briefings that Moore's candidacy was more likely to satisfy the US non- governmental organizations and the Congress, US officials are not even able to explain what is their objection to Dr. Supachai, nor do they seem willing to come out into the open, fighting their battles with smear campaigns and innuendos.

As David Woods, former GATT press officer (under Arthur Dunkel and Peter Sutherland) has put it in a letter to the Financial Times, "some parties are behaving as if the selection process were an only slightly quieter extension of the bombing of Serbia..."

Some US reports say that taking everything into account, the US State Department and Treasury had favoured Supachai, but that the USTR prevailed in swinging the US choice to Moore, and pursuing a no-holds barred campaign that seems likely to impact on the process to Seattle.

The General Council has before it a recommendation from Chairman Mchumo, in his report of 30 April, to elect Michael Moore of New Zealand as Director-General, and a validly tabled Kenyan proposal to build a consensus around Dr. Supachai.

The long debate about the status of the Kenya proposal and the Mchumo recommendation, showed that some 19 speakers, representing 25 countries, spoke insisting that the Kenyan proposal was valid and had to be taken into account by the Council for any decision; some 15 others opposed its validity or consideration, on procedural grounds, while five others who spoke took no particular view on either side.

There was even a challenge from Mexico whether Mchumo's recommendation amounted to a "proposal" in terms of the Council rules (which require proposals to be put forward 12 hours in advance) and agreed procedures for electing a D.G. New Zealand, and those supporting Moore, argued that the agreed procedures for selection and the 1986 decision of the Contracting Parties on appointment of a Director-General, allowed only for the Chairman to make a recommendation and for others to accept it. New Zealand even suggested that the rules of procedure of the Council would not or could not apply!

But the supporters of Supachai, and in particular India and Mexico demolished this case. India cited chapter and verse of the 1986 decision of the Contracting Parties, the July 1998 decision of the General Council in setting in motion the process for selecting a successor, including naming facilitators to manage the process and distinguishing it from the decision-making process that rested with the Council, and successive reports to the General Council to make clear that the Council at no time had either agreed to the elimination of candidates from consideration by the Chair and facilitators or for accepting a proposal from the chair without demur.

The US and other Moore supporters attempted to portray the other side as denying consensus and vetoing the Chair's proposal, and formulating their own objections to the Kenya proposal in favour of Dr. Supachai as procedural rather than one of objection.

India, towards the end, suggested that to remove the "subjectivity" in the judgements of Mchumo and facilitator Amb. William Rossier, based on the criteria of "level of tolerance", the chair and the facilitator should be requested to disclose details of objections to either candidate expressed in the private "confessionals."

Those who favoured the Kenya proposal included Kenya, the ASEAN's seven members, Dominican Republic, India, Hong Kong China, Japan, Korea, Mexico, Norway (which had supported Supachai but had said on 30 April and 1 May that it would go along with the Chairman's proposal of consensus for Moore), Brazil, Australia, Pakistan, Guyana, Uganda, Panama, Haiti, Honduras, Sri Lanka and Zimbabwe.

Those who insisted that only the Chairman's recommendation for Moore could be considered were: the US, Argentina, Chile, Romania, Nigeria, Lesotho, Colombia, New Zealand, the Czech republic, Bolivia, Costa Rica, Guatemala, Turkey, Uruguay and Nicaragua.

Others who spoke, without specifically favouring or opposing the Kenya proposal were Kyrgyztan, Canada, Belize, Hungary and Venezuela.

Mchumo, in opening the meeting 6 May, made a conciliatory statement, appealing to members to recover "the calm and friendly spirit" in which business is normally conducted. He clarified that while he saw his mandate as one to come up with a single name for election by consensus, and that it inevitably meant eliminating others from the process, and his own proposal to elect Michael Moore of New Zealand by consensus was before the Council, the Kenya proposal for building a consensus around Dr. Supachai was also on the table. He also announced his intention to bring the meeting to an end at a "civilized hour" (in time for delegates to have dinner with their families), since frequent late-night meetings were not good for the temper.

The chair acknowledged that his statement about Supachai being eliminated had "naturally" caused a great deal of concern, and went on to explain how and why he reached the conclusion, basing himself on the mandate to him from the Council to propose a single name around whom, there was the best chance of building a consensus. Moore's name was arrived at on the basis of the three criteria used throughout the process - a process of reduction in which candidates least likely to command consensus were eliminated one by one. By coming forward with a single name he had inevitably eliminated the third name.

In saying Supachai's candidacy was eliminated, he had meant that this was so as far as the stage of the process culminating in his recommendation and his proposal was for building a consensus around Moore and "I maintain that proposal."

Mchumo however agreed that a new factor had appeared on Monday, in the form of a Kenya proposal to build a consensus around Dr. Supachai, and in his statement of 4 May he might have paid insufficient attention to the proposal. But he was not trying to disallow or set aside the proposal. He was only making clear his own view of its status in relation to the process he was required to conduct and that process was still going on, with his own proposal for Moore remaining before the Council for decision.

However, the Kenya proposal too was clearly on the table and had been the main subject of discussion when the meeting had been suspended Tuesday, though the discussion had turned to essentially procedural questions. Mchumo wanted to conclude that discussion. And in proposing that a consensus be formed around Moore, he had not tried to take over the power of decision belonging to the Council.

In the discussion that followed, Malaysia's Amb. Hamidon Ali for the ASEAN, called for due process and fair play in the process. The agenda before the meeting was the appointment of a Director- General and there were now two contenders. The chairman had made a proposal on which there was no consensus, and the ASEAN reiterated their formal objection to the recommendation. As far as this recommendation was concerned, the efforts towards a consensus had been exhausted but no consensus had been achieved.

On the other hand there was a formal proposal of Kenya for a consensus around Dr. Supachai, which followed from the many proposals on this made from the floor. Many of those who had manifested supported for the proposal of the chair had said at the same time that they could go along with a proposal for consensus around Supachai. On the basis that they meant what they had said, there should be no objection to the appointment of Supachai as the next D.G., Malaysia added.

New Zealand's Amb. Roger Farrel, sought to counter this with the argument that the proposal ran counter to the procedures already agreed upon, which required the Chairman to make a recommendation. The Kenya proposal gave rise to a number of legal and procedural problems - essentially of fairness to all four candidates. It ran counter to the selection procedures decided upon in 1986, and endorsed by the General Council in July 1998, to the effect that the Members would appoint a DG by consensus. The agreed procedures did not permit any single member like Kenya or a group of them to put forward a recommendation for consensus. Only the Chair was mandated to designate a person to be appointed by consensus.

India's ambassador S.Narayanan, and Mexico's Amb. Alejandro De La Pena, read from the text of the 1986 GATT CPs decision and the July 1998 decision, setting in motion the current process. The two envoys challenged the view that the agreed procedures required the Chairman to put forward a name and this was binding. The 1986 decision said that the Chairman of the CPs was to conduct the consultations six months before the termination of the first term of office of the D.G., but made clear that the D.G. is to be appointed by the Contracting Parties. The 1986 decision, was in the form of a statement by the Chair of the CPs which had said that this was being done deliberately so that "there will be a reasonable amount of flexibility in the future application of the procedures forming part of this statement."

According to the minutes of the Council meeting in July 1998, Narayanan pointed out, in initiating the current process for choosing a successor, the Council chair, Amb. John Weekes of Canada had noted that since his own country had a candidate, even though promoting that candidature would be the responsibility of his deputy, to ensure that the process of consultation was conducted without any question about its integrity, he intended to ask Mr. Rossier to consult members on how to proceed with the consultations which had to be conducted by the Chair. "The selection of the next Director-General," Weekes had emphasized, "was the responsibility of Members. It was not a task that could be delegated to a Chair or a group of persons.

"It was important that Members not confuse the management of the process with the responsibility to select and appoint the next Director-General," Weekes had said.

The published minutes showed that various members had expressed views on the nature of the consultations, which were taken note of by the Council which expressly had only agreed to the procedures suggested by the Chairman.

On the New Zealand contention that the WTO council procedures would not apply, Narayanan noted that the convening of the Council for selecting/electing a DG, or at the meeting the Chair giving the floor to speakers and directing the proceedings, were all being done in accordance with the rules provided for, and to argue that the selection of a DG was outside these was not sound.

Citing the various reports from the facilitators and Chairman Mchumo (in documents not yet officially de-restricted, but unofficially provided to the media by trade officials), India cited Mchumo's own statement on 22 February, when taking full charge of the process, that the decision to appoint the D.G. for the first term had to be taken after the process of consultations. Mchumo had also said that it was a "Member-driven process" and not one for the Chair or facilitator. "Eventually, it is Members who will elect the Director-General, not the Chairman and/or the Facilitator. The decisive role had to be played by the Members themselves."

Citing from the Chair's reports of 1 March, 17 March, and 27 March, India pointed out that Mchumo had consistently pointed out that there had been no change between the two leading contenders either in the hierarchy of support or their widespread geographical support. And in the intervention of 14 April, India had warned that if by 30 April, no consensus was achieved, "willy nilly we have to resort to voting, a prospect which we don't like." But if consensus-based decisions become impossible, "it may be appropriate to decide the issue with voting instead of allowing the issue to simmer."

In their interventions, India and Mexico, insisted that no candidate could be eliminated from the race by the chair. Japan and Hong Kong China said that the selection process which began in July 1998 and had been entrusted to the facilitators, and to the chair and facilitator, was over with the 30 April report and the question was now in the hands of the Council for decision by the Council.

Also, the statement by Mchumo and Rossier about McLaren's candidacy was not that he had been eliminated, but that no consensus was possible around him. The Council had agreed with this and allowed other consensus efforts to be explored.

The only way a candidate could be eliminated was for the Council to appoint a D.G. or for the candidate himself to withdraw, Narayanan said.

He commended Brazil's view that a consensus has to evolve and could not be imposed. The US contention that on the last two occasions (appointment of Sutherland and Ruggiero), the suggestion of the chair had been accepted was not a sound one. In both cases, there had been only one candidate at the end, the others having withdrawn. But the view that the Chair's proposal should have an automatic consensus was not reasonable.

Brazil's Amb. Celso Amorim reiterated his country's support for Dr. Supachai, but said that it would not block the election of Mr. Moore "if there was a clear consensus" in his favour. Amorim said that everyone was aware of the realities, but the consensus- building process should not become one of imposing a consensus.

Brazil noted that the Chairman in his opening remarks had said he would continue consultations. But he had to do so taking into account not only his proposal, but that by Kenya which was validly put forward and on the table. Amorim also referred to the fact that Canada was maintaining the candidacy of McLaren, and said that Mchumo could conduct consultations on all the candidates.

While Amorim's remarks were interpreted by some to mean that Brazil was pointing to the third candidacy, Mr. Amorim himself when reached on the phone denied this, but said he was only pointing to the actual legal situation. Brazil fully supported the Kenya proposal for building a consensus around Supachai, he added.

India said that the supporters of Moore were repeating like a slogan "no vote, no veto". If that were so, let everyone, including the US, join in asking the chair and facilitator to tell the Council what they meant by their remarks in the statement of 30 April that "there were more objections to Supachai than to Moore" and explain the "degree of tolerance".

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

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