World trade dispute deepens

HOSTILITY over trade issues between the European Union and the US intensified last week when the two sides failed to agree on who should be the next director-general of the World Trade Organisation.

"What is at stake is the credibility of the multilateral trading system as a whole and the WTO in particular," said Ali Mchumo, the Tanzanian chairman of WTO's general council.

Supachai Panitchpakdi, Deputy Prime Minister of Thailand, and Mike Moore, New Zealand's opposition spokesman on trade, were in the running to succeed Renato Ruggiero of Italy, who steps down as WTO chief at the end of this month.

Mr Mchumo took soundings in private to find out who the 134 member countries wanted for the job. The aim was to reach a consensus, rather than take a vote. He hoped to present the name of the favoured candidate to a meeting of the WTO council for approval on Wednesday.

With most EU countries, including Britain, appearing to favour Mr Supachai, he seemed the favourite. But Mr Mchumo reported that objections by some countries ruled him out.

The US is thought to have opposed Mr Supachai. Thailand has been in dispute with the US on a number of trade issues, including shrimp catches. Washington is known to believe that Mr Moore is more closely in tune with its world view.

In an attempt to flush out the US position, EU trade commissioner Sir Leon Brittan said in a letter to Mr Mchumo that if a country had strong objections which amounted to a veto, it should say so publicly. But the US refused to respond.

Simmering disputes be- tween the EU and the US on trade issues seem to have intensified the traditional sensitivities surrounding the selection of a new WTO chief. A compromise candidate cannot now be ruled out.

Meanwhile, differences have emerged between the EU and US over the WTO and China. US trade representative Charlene Barshefsky visited China twice in March to discuss US-China trade relations and the country's bid to join the WTO.

With the US appearing to be making the running over China's entry, Sir Leon Brittan last month gave what seemed like a pointed warning to the US, that "no one party ... can determine the outcome on its own. No bilateral agreement between China and a third country can be imposed on other members of the WTO. Concessions made by China to individual countries should be extended to all other parties."

Last week, China announced deals it had struck with US aerospace, energy and power companies.