Salinas Eagerly Eyes Top Job In World Trade Organization
Mexican president faces competition in bid for new post
ARCHITECT of the North American Free Trade Agreement. Inflation fighter. Senor Privatization. Now, Mexican President Carlos Salinas de Gortari wants to add another title to his resume: chairman of the World Trade Organization (WTO).Skip to next paragraph
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By law, the 46-year-old Harvard economist can't be reelected. And he's too young and ambitious to retire when his term expires Dec. 1. Taking over the helm of the WTO - a new, more powerful organization that succeeds the General Agreement on Tariffs and Trade (GATT) in January 1995 - would be a coup for Mr. Salinas. ``The WTO chair will be an extremely important post,'' says Paula Stern, a senior fellow at the Progressive Policy Institute in Washington. ``He or she will be inaugurating a whole new chapter in international trade.''
During GATT's transition stage, a strong leader could build the WTO into the premier international trade regulatory body envisioned some 50 years ago, says William Cline, a senior fellow at the Institute for International Economics. ``Salinas would be a superb candidate,'' Mr. Cline says. ``His political stature, combined with his economic experience in international trade and development, would bring a new dimension to the GATT job.'' But, he adds, ``a weak director would create an organization which falls short of its potential.''
Originally, the International Trade Organization was to be set up alongside the International Monetary Fund and the World Bank. But the US Congress vetoed it. Instead, GATT was created 47 years ago on a ``temporary'' basis to oversee trade negotiations. The WTO was finally established by the last round of negotiations, the Uruaguay Round, which was completed in December.
The WTO will have more teeth in dispute resolution. And the Uruguay Round agreement has expanded the trade regime to include services and intellectual property rights. ``We're seeing an enormous expansion in responsibility and coverage of world trade,'' says David Woods, a spokesman for the GATT Secretariat in Geneva. He estimates that the inclusion of services will double GATT's volume of trade from the current level of about $3.5 trillion.
More countries are signing on to the trade regulatory regime. In February 1993, GATT membership totaled 106. Now there are 123 member countries, with another 20 countries (including China) expected to be admitted in the next year or two.
When trade disputes arise, member countries will no longer be able to ignore GATT dispute panel rulings. For example, according to new WTO rules, if one country raises tariffs in violation of the agreed trading rules, the injured country can take retaliatory measures.
The WTO chief will have to be both flexible and tough. ``We're looking for a rare animal: someone with a lot of diplomatic skill but able to stand up and promote the principles of the system effectively with ministers and heads of state,'' Mr. Woods says.
Salinas managed to win a near-unanimous endorsement for the WTO job at the Ibero-American Summit (all but Brazil, Spain, and Portugal backed him) last month in Colombia. And US Treasury Secretary Lloyd Bentsen expressed his support for Salinas last week.
But some trade experts say the Clinton administration may withhold its backing of Salinas until after Congress ratifies the results of the Uruguay Round and after Salinas has shown, by fraud-free elections on Aug. 21, that Mexico's electoral reforms are as effective as the Salinas economic reforms. Members of Congress, as well as some leading US consumer and environmental groups, see expanded WTO powers as an intrusion on US sovereignty with the potential of undermining health and safety standards. They don't want the WTO in the hands of a high-profile mover and shaker such as Salinas.
Salinas isn't the only one vying for the WTO post. There are three other declared candidates: Renato Ruggiero, a former Italian trade minister; Ruben Ricupero, Brazilian finance minister; and Kim Chul-su, South Korea's trade minister. More candidates may be announced before the nomination period closes at the end of July. The GATT member nations are expected to make a consensus decision on the WTO appointment by December.
Of the three declared candidates, trade experts say, Mr. Ruggiero offers Salinas the most competition. ``He's a senior diplomat, a longtime player in the trade area,'' Ms. Stern notes. Ruggiero has also been suggested as president of the European Commission. If the European Union lines up behind Ruggiero and the US behind Salinas, a compromise candidate may have to be found. Mr. Recupero, Brazil's GATT representative, is also lobbying hard for the post. ``I could start work tomorrow at the WTO because I don't need anybody to explain to me how this organization works,'' he told reporters July 5.