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Why Impasse on Trade Boss Exasperates Friends of U.S. : With Salinas having withdrawn, Washington seems to be at a loss

March 19, 1995

This year was to usher in a new era of world trade. On Jan. 1, the General Agreement on Tariffs and Trade went into effect. The pact aims at vastly expanding world trade by lowering barriers and erecting a new trade agency known as the World Trade Organization. Yet here we are, months later, past the mid-March date when a general director for the WTO was to have been named, and the group remains without a permanent leader.

Why should anyone care? Because this powerful organization will administer new trade rules and mediate disputes involving 80% of the world's commerce. The new agreement will expand export markets for U.S. goods and services. That will mean more jobs for Americans, especially Californians. Indeed, a dramatic increase in U.S exports has pushed Los Angeles ahead of New York to become the nation's busiest trade hub. The trade pact could put more money into the pockets of Californians than any of the tax cuts proposed in Washington or Sacramento.

Yet the United States, despite steadfastly championing free trade and pushing hard for the new agreement during the seven grueling years of negotiations, finds itself the target of complaints that it has been indecisive and divisive in the process of selecting a WTO head. Of course the Clinton Administration could scarcely have anticipated the full course of events, especially those affecting Carlos Salinas de Gortari, the former president of Mexico and at one time Washington's prime candidate for the WTO job. Salinas withdrew his name March 3 amid controversy over Mexico's fiscal crisis and charges leveled against his older brother in a murder conspiracy case. The Administration apparently had and has no backup candidate.

There are two remaining major contenders for the WTO post. One is Italy's former trade minister, Renato Ruggiero; the other, South Korea's former trade minister, Kim Chul-Su. Reportedly, Washington isn't keen on either. The Clinton Administration's official line is that there is no "consensus candidate." This stand has puzzled and angered both the European Union, which backs Ruggiero, and Asian nations--especially South Korea, a staunch U.S. ally--which are backing Kim, a respected economist.

Europeans, Asians and other WTO members are irked with Washington because for months U.S. trade negotiators and top Administration officials raised no objection to either Ruggiero or Kim; suddenly, when Salinas withdrew, Washington was full of doubts. (Some observers are reminded of the Administration's troubles in vetting candidates for various domestic offices.) Many WTO diplomats maintain that the final consensus choice should be between the two.

In all fairness, the United States should not summarily dismiss Ruggiero or Kim, at least not without some substantial explanation from U.S. Trade Representative Mickey Kantor. Clearly Washington is concerned that each candidate comes from a country with policies that leave much to be desired in terms of free trade. Kantor reportedly is interested in finding a high-profile, free-trader of the likes of former Canadian Prime Minister Brian Mulroney or ex-British Prime Minister Margaret Thatcher. But are these really wise choices? The WTO is supposed to serve its widely disparate member nations--a task that won't be easy--not to enhance the stature of politicians who are past their glory days.

Two Republican House members, Scott McInnis of Colorado and Jay C. Kim of Diamond Bar, are seeking support in Congress for the South Korean candidate on the ground that Asia is the world's most important trading area. And from across the Atlantic, the British publication the Economist has an interesting suggestion. It proposes that unless Peter Sutherland of Ireland, the WTO's popular interim chief, reconsiders taking the job permanently after having declined it for family reasons, an American heavyweight be appointed to allay domestic U.S. fears about the loss of sovereignty on trade issues. Sutherland is a former director general of GATT.

Whoever is finally selected for the WTO hot seat, the disarray in Washington over this matter is distressing. With 123 nation members, the WTO conceivably can be an organization with huge clout in free trade--a dynamic that is fast reshaping the world politically, socially and, of course, economically. Getting the WTO off to a solid start is important. The Administration should decide soon whom it wants for the job and stop insulting its friends and allies.

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