General Council to discuss "Bangladesh" compromise on DG

by Chakravarthi Raghavan

Geneva, 14 July -- The General Council of the World Trade Organization is to meet informally Thursday morning where members are expected to receive some details of proposals to resolve the deadlock over the election of a Director-General by the two candidates having a term each.

Bangladesh has been conducting consultations on a formula for New Zealand's Mike Moore and Thailand's Supachai Panitchpakdi taking the post in succession, and a paper on the compromise has reportedly been prepared - but with some unresolved questions left blank.

Trade diplomats do not expect a decision Thursday, but expect that the paper with the various details of this "job-sharing" would be discussed and sent to capitals thereafter for a final decision, to be adopted at a formal meeting of the General Council.

One trade diplomat said that while the outlines of the "compromise" have been considered in concentric circles of consultations, it was by no means certain that it would go through, since there are a number of ancillary details to be settled, and the more details need to be worked out the more problems may emerge.

The outlines of a "job-sharing" compromise emerged publicly, on the side lines of the APEC trade ministers meeting in Auckland earlier in July, and was attributed in the media as an Australian move.

In the consultations in Geneva that Australia initiated, it was referred to by Australia as a "Bangladesh proposal".

But trade observers have pieced together various elements that seems to suggest that the compromise is another example of the non-transparent, undemocratic and manipulative decision-making process at the WTO.

According to the information that trade observers and diplomats have pieced together, while Bangladesh did mention in the informal General Council (just before the Cologne G-7 Summit) the idea of the two candidates taking a jab at the post in succession.

There are some suggestions that in fact the idea came from the G- 7 (trade ministers and senior officials) in the days immediately before the Cologne summit - though some of the G-7 deny this.

According to this view, it was also felt that if the suggestion came from any of the majors who have taken positions on either side, individually or collectively, it is likely to be shot down, and the compromise needs to come from someone else.

Ultimately, the idea was broached in the Council by Bangladesh, but the Bangladesh ambassador did so by referring to it as one of the solutions being heard in the corridors outside.

But this idea appears to have been discussed by the Australian and New Zealand Prime Ministers, with Australia commiting itself to give Moore the first chance, and getting Thailand and Supachai's own consent for this.

And Mr. Moore almost shot himself in the foot, at Auckland, when he spoke of his "right" to get the job first -- because of the assessment of support for him announced in Council by its Chairman Amb. Ali Mchumo -- and that if necessary, the term should be extended if the next round of negotiations to be launched at Seattle could not be completed in the four years.

All these did not go down well here, nor the Australian attempts to "sell" the compromise to the Supachai supporters as "half-a- loaf is better than no loaf", and developing countries should accept it as it gives them a chance to take the top job (so far held only by Europeans) after four years.

Supachai has been quoted in the Thai and some western media that he would be willing to accept this compromise and give Moore the first chance. And while, Thai officials here have been telling their supporters that it was for the WTO members to decide on the compromise, it seems apparent that this would be acceptable to them.

From Thailand's own perspective, perhaps the compromise is seen as the best way out for itself.

In the consultations here so far (since the APEC meet), the idea of a four year term for each has been rejected by Latin American and African nations. And the attempt of Moore to lay claim to the first chance on the basis of the "Mchumo assessment" has also been questioned by some others who argue that the validty of Mchumo process had been questioned in the Council and can't be used.

At the various informal consultations this week, there have been some who have said that such a compromise was not the best, but they could live with it, but not on the basis of a four-year term for each.

Some have said that the two candidates could split a four-year term (each getting two years). Others have indicated their willingness, but very reluctantly, to agree to the candidates having three years each.

A paper prepared by Bangladesh and forwarded to Australia, and which it has suggested should be circulated by the secretariat as a draft decision, provides for the Council appointing the director-general and provide for deputies terms to be co-terminus with the DG's term.

The compromise decision provides that the Council appoint by consensus

* X as the Director-General for thre years from 1 Sep 1999 to 31 August 2002, and

* Y as the Director-General for three years from 1 Sep 2002 to 31 August 2005.

X and Y are mentioned as "either Mr. Moore or Mr. Supachai.

The draft further specifies:

* that neither candidate shall be eligible for reappointment nor shall his period of office be extended,

* that the General Council in March 2002 shall determine the availability of Y for office and, if Y is not available, the process for reappointment of a new Director-General shall commence immediately.

Also, if X vacates office prior to 31 August 2002, he shall be fllowed by Y who shall serve only for three years.

The draft also provides that the Director-General shall appoint Deputy directors-General in consultation with Membgers for a period limited to his own incumbency.

The proposed compromise decision is to constitute a precedent for future appointments. A comprehensive set of rules and procedures for such appointments are to be elaborated and adopted by end of Sep 2000.

But the "compromise" is not without critics.

There are some who bristle at the idea of the candidates cutting a deal, and suggest that the person to take the job first could be decided by a toss of the coin!

Others say that it is not unfair that the two candidates agree on a mutual arrangement.

But with DGs prone to travel the world and deliver speeches, and the deputies who come with him having to "learn" the job on the job, the secretariat would be run effectively, even more than before, by the Directors, mostly from the North.

In fact last year, before the DG process became so controversial, key directors had canvassed the view that there is no need for a DDG, or at best for one - and that directors could run the divisions themselves without any DDG to supervise them. It did not fly.

When delegations raise these questions, they are usually dismissed as seeking jobs, which may be involved too, but involve other some questions of greater import.

But there are also some substantive issues that go to the heart of the problem of the WTO secretariat and its bias towards the industrialized nations, and an "ideology" which is not even free- trade but neo-mercantalist -- promoting interests of corporations to break open the markets of the developing world.

And this issue of secretariat bias and role is now becoming more important, given that the WTO remit is no longer one that related to crossing of 'goods' at the border, but a whole range of domestic economic policies and issues of developing countries where national sovereignty and decision-making had prevailed.

The secretariat (and the Director-General) have no power under the Marrakesh Agreement on the WTO.

But the secretariat exercises a great deal of "influence", more so because of the lack of transparency in most things connected with the WTO.

Unlike in the UN system, where data about national composition of staff are provided, the WTO does not have any publicly available documents. It is not even clear whether the WTO Budget Committee gets this data.

The secretariat is dominated and run by staff overwhelmingly drawn from the western industrial world.

In the secretariat now, of the 23 or 24 staff at the level of directors, only three are nationals from the developing world - one dealing with Accessions, another heads the General Council division and third the textiles and clothing. The rest of the departments and divisions, and the key substantive ones, are drawn from and headed by staff from the industrialized world.

The staff at lower levels too are equally skewed.

According to some insiders, past and present, Mr.Ruggiero did make an effort to get more staff from the developing world, but was unable to make much headway under the system.

One staff member who did not want to be identified, explained that while there is supposedly recruitment based on merit, and applications are invited, and candidates are interviewed by an appointments board, few outsiders have a chance.

Divisions and directors engage "consultants" (on a short-term contracts) who also apply and having been inside, can always do better than an outsider who is being interviewed, one former staff member explained.

Whatever the reason, the fact is that the WTO secretariat is overwhelmingly dominated by nationals from the industrial world, and within them those from North America and Europe holding the substantial and key departments and divisions.

To describe or explain away all these on the ground of recruitment based on merit increasingly strains credulity. (SUNS4477)

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

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