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WTO looking for a Houdini?

Another General Council meeting has taken place without yielding an outcome to the selection process for a new WTO Director-General. While the respective supporters of the two competing candidates hold on steadfastly to their positions, the deadlocked process - and the manipulations that have accompanied it - appears to have dealt a serious blow to the standing of the offices of the Director-General and the General Council Chair.

by Chakravarthi Raghavan


GENEVA: After another three hours of repetitious discussions, a resumed meeting of the World Trade Organization's General Council still remained on 26 May evening at an impasse over the selection of a Director-General - with the respective supporters of US-backed Michael Moore of New Zealand and Thailand's Supachai Panitchpakdi standing firm on their positions.

Comments on both sides may have been briefer this time around, but the rhetoric of the debate remained the same. And while some new voices were heard, expressing support for the "Chairman's proposal", it was not clear whether they were really new support or came from those who had indicated support end-April now voicing support from the floor.

One day or the other, over the next several days, or maybe some weeks and months later, a Director-General would be named, though it looks as if the WTO would need more than a "houdiny" - the term used on 26 May by Zimbabwe to describe the Tanzanian Chairman of the Council, who may probably be regretting his ever having taken on the job, which is proving to be a thankless task - to pull it off.

The process has now reached such a pass that, irrespective of the outcome, the usefulness, prestige and functions of the future Director-General (whose office under the WTO Agreement has no powers or initiative beyond what the membership instructs from time to time) have now been dealt some serious blows.

The repetitious iteration by the US that the proposal to name Moore as the DG was the "Chairman's proposal", in effect thus "occupying" the Chair, appears to be undermining and eroding the position and role of the General Council Chair (and by extension the chairs of other WTO bodies) not only on this issue, but on many tougher and more difficult problems ahead.

And outside of the charmed circle of trade officials and bureaucrats of countries, the public perceptions of the WTO as non-transparent and undemocratic - and thus lacking legitimacy - and with a partisan secretariat favouring large corporate interests over the public interest, have also been strengthened.

In the discussions, the Zimbabwean ambassador, Prof Jokonya, at one stage seeking the guidance of the Chair, somewhat jocularly called him "the houdiny" - a reference to the American magician Harry Houdini (the professional name that the Hungarian-born Ehrich Weiss took) who, after having started off as a trapeze performer, became world-famous for his performances of extraordinary feats of magic - the ability to extricate himself from handcuffs, ropes, locked trunks and bonds of any sort. (In one astonishing feat, he had himself locked in a packing case, which was bound with steel tape and dropped into the harbour off the Battery in New York. Houdini appeared on the surface of the water in 59 seconds.) But more than a Houdini may now be needed to undo all the problems of the WTO and its members.

General Council Chair Amb. Ali Mchumo began the 26 May meeting with a statement that his proposal to appoint Moore by consensus was gaining more support, but was faced with harder reiterations of denials of consensus over it. And Mchumo ended the meeting with the statement that the consensus was still elusive, but that discussions had given some food for thought and that he would continue to hold more "informal consultations."

Probably the only "new" element injected into the discussion was a summing up of the situation by Australia, a strong and consistent backer of Supachai, that it was time to recognize that neither the Chairman's proposal (favouring consensus around Moore) nor the Kenyan proposal (favouring consensus around Supachai) had generated a consensus, that both candidates enjoyed a very large degree of support among the membership and that the new DG must be selected from among the two.

If these three premises were accepted, said Australia, it may be possible to move the process forward through a "circuit- breaker" - generally interpreted by most members afterwards as a codeword for an informal ballot, whose outcome could be turned into a formal consensus.

Mchumo himself recognized that the discussions, including the Australian proposal, had provided some "food for thought", and promised to pursue them in further consultations. But judged by the remarks of the US and some of its supporters, it appeared that Mchumo may not be allowed much flexibility by them in exploring new avenues for solutions.

In his initial statement, Mchumo said that his consultations since the last meeting had not closed the gap, but that some important and useful points had been made, and thus some progress had been made.

There had been "very powerful support" for the view that the appointment should be from among existing candidates. And while some delegations would not exclude any options, no one had said the process opened last July should be regarded as exhausted and a new one should be opened. "To declare the current process at an end would bring the Organization into uncharted and dangerous waters," since it could not be foreseen how long they would be without a Director-General or how easy it would be to reach an agreement on a new candidate or procedures for choosing one. So long as there was a chance of reaching agreement within the current process, he would not be prepared to assume responsibility to admit the one set up in July last year had failed.

If, as everyone had said, there was no objection on grounds of personal merit to either of the candidates, it ought to be possible for members to agree on the proposal made by him for election of Moore, Mchumo said, adding that he could not impose an agreement but only appeal.

Mchumo also said that the consultations had shown an increase in the number of countries willing to support his proposal. Also, in his view,the Kenyan proposal on the table had been extensively discussed but had met with objections.

Opposing camps

A number of Moore supporters - including Belize, Costa Rica, Uruguay, Chile, Lesotho (also for Botswana, Mozambique and Swaziland), Romania, Bulgaria, Nigeria, Guatemala, Colombia, the US and Israel - supported Mchumo's proposal, emphasizing his view that support for Moore had grown. They also argued that except for the ASEAN, no one else had formally objected to a consensus around Moore, nor had the ASEAN given any specific grounds. The Kenyan proposal could not even be considered since it was not part of the process agreed to in July 1998. And recourse to voting to break the deadlock was not part of the agreed procedure and would set a "very dangerous precedent."

The US also insisted that the Chair had made the proposal for building a consensus around Moore on behalf of the entire membership and it was no longer a Chairman's proposal, and that the US would not even consider the Kenyan proposal which, in the US view, did not have the same weightage. The possibility of a decision by vote was also rejected by the US.

On the other side of the argument, Mexico, Australia, Japan, India, Zimbabwe, Haiti, Hong Kong China, Kenya, Pakistan and Egypt reiterated their support for Supachai and for the Kenyan proposal.

The Chairman's proposal for electing Moore had been considered in detail but clearly did not enjoy a consensus. It was not merely the ASEAN that had blocked a consensus, but several others had clearly said that they could not join a consensus around the proposal. Principles of fairness and equity demanded that the Kenyan proposal be considered in the same light and members be given an opportunity to discuss it substantively - more so since no one had so far specifically and formally opposed Supachai.

Pakistan insisted that the process agreed in July 1998 did not in any way mean that the members had abrogated their right to submit proposals. Pakistan also challenged the view of Moore's supporters that Art IX of the WTO Agreement (for a vote if no consensus was possible) did not apply to the selection of a Director-General.

Malaysia, on behalf of the ASEAN, reiterated its view that the Chair's job was to facilitate a consensus and that the Chair was only the manager of a process whose ownership remained that of the membership. The power to appoint a DG under Art.VI.2 of the WTO Agreement remained with the Ministerial Conference, and when it was not sitting, the powers could be exercised by the General Council under Art. IV.2. This power had not been delegated to the Chair or any other body.

In a clear rejection of the view of Mchumo and the US that the July 1998 process was still continuing, the ASEAN said that with the Chair's report of 30 April recommending the appointment of Moore, the consultation process "stood terminated."

The ASEAN had expressed its formal objections to the consensus decision, in terms of Art IX.1 of the WTO Agreement, and this was "conclusive that there is no consensus" on the Chair's recommendation.

Following the failure of the consensus, Kenya had formally proposed under Rule 28 of the Council's Rules of Procedure an attempt to establish a consensus around Supachai and, under the rules, the General Council was obliged to consider the proposal.

All reasonable efforts must be exhausted to arrive at a decision by consensus on the proposal before decision-making by other means could be contemplated. In the absence of consensus on the Chair's own proposal, "every reasonable effort" must be made to build consensus around the Kenyan proposal to appoint Supachai as Director-General.

Blitzkrieg

Amb. Jokonya of Zimbabwe said it was a source of disquiet that the major media in the Western world had embarked on a blitzkrieg against the candidacy of Supachai. The moral compulsions of the journalistic profession seemed to have all but disappeared. But the Council should not allow itself to be debased by its proximity to "this modern weapon that had reduced democratic processes to a farce."

Even the "consensual doctrinaire" could have no doubts that there was no basis for consensus on the Chairman's proposal. Mchumo, Jokonya said, had used his considerable charm and powers of persuasion to get a consensus around his proposal, had petitioned and supplicated for a consensus, and had even remonstrated with the members opposed to be magnanimous and join the consensus. But all these had failed.

And while Zimbabwe respected those who insisted on reaching a decision by consensus, "we do take umbrage when colleagues go as far as saying they will never accept the provisions of the WTO constitution in the absence of a consensus". The mind boggles at this, since it denigrated the WTO constitution and objectively held views of those who agreed that in the absence of a consensus, there had to be resort to the alternate provisions of the constitution, namely a vote.

The consequence of repeatedly saying "never" in diplomacy was "gunboat diplomacy". The WTO was a rules-based organization, and there were rules that there should be consensus where possible and a vote if consensus was impossible.

As Zimbabwe had said before, the consensual approach of GATT and now of the WTO had served some nations very well, but it had served many countries ill, and among the latter were the poor countries whose present circumstances in the WTO were of continuous economic decline and marginalization. It was these countries, especially the LDCs, the majority of which were in Africa, which cried foul over the Marrakesh Agreement.

"We remember the promises of Marrakesh very well and we are not prepared to be diddled by your consensual magic," Jokonya said. Just because they held a contrary view should not be seen as disrespect to the institution of the Chair, which had tried to get a consensus that could not, however, be found.

Quoting an English philosopher, Jokonya said the WTO members (in their search for a consensus around Moore) were in the position of "people in a darkened room looking for a black cat which probably is not there anymore," and they had to find a way to get out of the dark room. The Kenyan proposal offered a way out, suggesting there is "a possible black cat in the other room where there are lights." It would not cost the Council much to explore it. In the absence of a consensus around Moore, the Chair should embrace the Kenyan proposal. "Only ostriches could afford to bury their heads under the sand and pretend we are making progress." Even the powerful may find it possible to accept a consensus around a candidate from a developing country. At best "you might end up with a Director-General, at worst with another deadlock."

In a reference to the insistence of the US that there be no vote, Jokonya said "in that event those who rigidly elevate consensus to the level of a global ethic should tell us whether they wish to revert to the old days of gunboat diplomacy by imposing their will."

This would be a desecration of their commitment to democracy and would diminish the viability of the WTO.

Crisis

The multilateral trading system was facing a crisis, and each day the choice of a DG was delayed it enlarged the dimensions of that crisis and polluted the environment within which the selection could be made by agreement.

"For the small and weak countries, this development was ominous. If we cannot choose a Director-General using clearly established rules of procedure so carefully crafted in the WTO, woe betide us in Seattle when self-interests of nations will be at stake."

Uganda's Nathan Urumba said under instructions from Kampala, he was reiterating his country's support for the Kenyan proposal. It was time to recognize that there was no consensus behind Moore. Addressing himself to the Chair, Urumba said the Chair had no candidate and must therefore try to find a way out.

"If a Chairman's proposal is seen as a fiat that everyone had to accept, it would do great institutional harm," Urumba said.

Japan said that efforts should be made to find a consensus around the Kenyan proposal, and failing that there should be recourse to voting to resolve the issue.

India expressed concern over the Mchumo view that since no one had expressed any reservations on the merits of either candidate, a consensus should be reached around the Mchumo proposal for electing Moore. On the other hand, said India, the fact that no reservations had been expressed on merits against either candidate was a reason for the Chair to conclude that a consensus was possible in favour of either. The Kenyan proposal was on the table, and in accordance with procedures it was important to consider the proposal substantively.

The process agreed in July 1998 had not in any way changed the procedures laid down in 1986 by the Contracting Parties for the election of the DG. It was not factually correct or logically tenable to contend that the proposal of the Chair was that of the members. There were two proposals on the table, both with equal status and weight, and it was not possible to argue that the Kenyan proposal did not have the same weightage.

Mchumo ended the meeting with the view that the discussions, including the Australian intervention, had provided some food for thought and he would continue informal consultations. (SUNS4443)

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

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