How Renato Ruggiero Became the First Director General of the WTO
This year's race for Director General (DG) of the World Trade Organization (WTO) is the third in the WTO's history. Both of the other competitions were contentious.
The General Agreement on Tariffs and Trade (GATT), the predecessor to the WTO, lasted from 1948 to 1994, and had four Directors General (DsG). From the retirement of the first GATT DG in 1968, DsG were chosen by consensus.
From 1968 to 1993, the position was filled by civil servants. Following an "informal understanding," these were "chosen from a smaller industrialized country" and the deputy director general positions were divided "between the United States and the developing countries..."(page 55; page references refer to the Kahler paper on which this post is based - see below)
Things began to change in 1993, when Peter Sutherland, of Ireland, was chosen as the last GATT DG. Sutherland had been a commissioner to the European Community, and thus had a somewhat higher political profile than previous DsG. In another change from the past, candidates from developing countries emerged to contest the selection. (pages 55-56)
The agreements establishing the WTO were signed in April 1994, and came into force in January 1995. The selection process for the first WTO DG began shortly after the agreements were signed, with nominations made during June 1994. The four nominees were Renato Ruggiero, an Italian diplomat and former Foreign Trade Minister, Rubens Ricupero, the Brazilian Finance Minister, and a former ambassador to the GATT, Carlos Salinas de Gortari, President of Mexico, and Kim Chul-su, South Korea's Trade Minister. (page 56)
During the first part of the WTO race, a parallel contest was going on for the leadership of the Organization for Economic Cooperation and Development (OECD). This race was resolved in the fall, when one candidate was given an 18-month term, to be followed by another candidate who was given a full five year term. The parallel OECD-WTO races led to proposals for tradeoffs between them. The failure of the OECD to reach a decision, and the resort to a term-sharing compromise, were repeated by the WTO in the spring of 1995. (pages 57-59)
Ricupero's candidacy ended first; he had to leave the race in September, "after admitting that he had massaged official economic statistics in Brazil to enhance his party's electoral fortunes." (56)
Regional blocs formed around the remaining three WTO candidates. The EU endorsed Ruggiero in September, while the US endorsed Salinas de Gortari and Japan backed Kim, in October. (page 56-57) As of October, the race among the remaining candidates was close. A first round of consultations that month found the member countries fairly evenly divided among the three candidates. (page 60)
The Salinas de Gortari candidacy was badly damaged when the Mexican financial crisis broke in 1994. Where the three candidates been neck and neck in the fall, by February Ruggiero had pulled far ahead of both of the others (page 60). Salinas' candidacy died when he withdrew on March 1, 1995, the day after his brother was arrested for murder. (pages 60-61)
Salinas� withdrawal left Ruggiero and Kim. The campaign dragged out for another two weeks, as U.S. internal indecision apparently prevented it from choosing between the two. The US Trade Representative, Mickey Kantor, was strongly opposed to Ruggiero, although other officials were not (pages 60-61).
In mid to late March, a series of compromises ended the contest. The U.S. accepted Ruggiero, but he was given a four-year, rather than a six-year, term; Sutherland, who had already agreed to one extension of his term, agreed to stay on until the end of April; a new DDG position was created for Kim (page 61). This set of compromises was controversial:
- "This open trade of a senior WTO position for crucial political support outraged some member states. The side agreement violated WTO rules, which stipulated that the creation of a new position first required consultation with the membership. African governments were particularly offended, since they had offered crucial support to Ruggiero, and they believed themselves underrepresented in Geneva. They immediately began to press for the creation of a fifth DDG position."(page 61)
As Kahler tells the story, this selection process was marked by a continuation of the shift towards political and away from civil service candidates, begun with Sutherland. It was also marked by heightened competition, increased competition from developing country candidates, an inability to meet the deadline for concluding the process, regional coalitions between candidates, frustrated developing countries, violation of WTO rules, and the promise of a DDG position to obtain support. Regional loyalties appear to have been more important than candidate policy positions.
Comments