ON 16 APRIL 1994, THE NOW DEFUNCT IRISH Press newspaper carried a prominent photo of Sutherland on its inside cover page. The reason was that the day before, Sutherland, as director general of the General Agreement on Tariffs and Trade (GATT), had presided over the signing of the Uruguay Round of multilateral trade negotiations. It was a significant landmark and deserved recognition. But what made the Irish Press photo different was that it featured a series of arrows, pointing to Sutherland’s features. The intention of this particular physiognomical exercise was to highlight the characteristics that had helped him succeed at the summit of international relations. Perhaps the photo said more about the pervading mentality in Ireland at the time than anything else. With the dark shadow of the bleak 1980s still casting a pall over pre-Celtic Tiger Ireland, confidence was extremely low. It was almost as if this was proof that an Irish person could succeed at the very highest level through their innate ability. Just because we were Irish didn’t mean that our rightful place was at the back of the queue.
When Sutherland took up the position the previous year, few people rated his chances of success. GATT was part of the post-war global economic architecture established under the Bretton Woods Agreement, which established the rules and institutions needed to regulate the international monetary system. The aim was to break down barriers to international trade. Most countries agreed it was a laudable objective, although there was very little consensus on how to bring about the removal of those barriers. Each individual government pleaded that it needed to protect politically or economically sensitive sectors. By the 1980s, advancements in technology and transportation meant that cross-border trade had become logistically easier than ever before. At a ministerial meeting of GATT members held in Geneva in 1982, a decision was made to launch a major new negotiation on trade. The talks broke down because of a failure to reach a compromise on agriculture, but enough common ground was forged to lay the basis for what became known as the Uruguay Round. In September 1986, at Punta del Este, the 123 ministers in attendance were able to agree an agenda that covered most areas of trade.
The scope of the Uruguay Round was more far-reaching and ambitious than any previous attempt to broker an international agreement on trade. New areas such as services and intellectual property were included in the agenda, as were commitments to reform trade in areas such as agriculture and textiles. The original timeframe set by ministers for the conclusion of the round was 1990. While there was widespread hope that an agreement would eventually be reached, privately many ministers doubted that such a schedule was realistic.
According to an official account of events, ministers met again in Montreal, Canada two years later, in December 1988, for what was supposed to be an assessment of progress at the round’s halfway point. The purpose was to clarify the agenda for the remaining two years, but the talks ended in deadlock that was not resolved until officials met more quietly in Geneva the following April. Despite the difficulty, ministers did agree during the Montreal meeting a package of early results. These included some concessions on market access for tropical products – aimed at assisting developing countries – as well as a streamlined dispute settlement system and the Trade Policy Review Mechanism, which provided for the first comprehensive, systematic and regular reviews of national trade policies and practices of GATT members. The round was supposed to end when ministers met once more in Brussels in December 1990. But they disagreed on how to reform agricultural trade and decided to extend the talks. The Uruguay Round had entered its bleakest period.
Despite the poor political outlook, a considerable amount of technical work continued, leading to the first draft of a legal agreement. This draft ‘Final Act’ was compiled by the then GATT director general, Arthur Dunkel, who chaired the negotiations at officials’ level. It was put on the table in Geneva in December 1991. The draft became the basis for the final agreement: its text fulfilled every part of the Punta del Este mandate, with one exception – it did not contain the participating countries’ lists of commitments for cutting import duties and opening their services markets.
Over the following two years, negotiations lurched between impending failure and predictions of imminent success. Several deadlines came and went. New points of major conflict emerged to join agriculture: services, market access, anti-dumping rules and the proposed creation of a new institution. The resolution of differences between the United States and the European Union became central to hopes for a final, successful conclusion.
In November 1992, the US and the EU settled most of their differences on agriculture, committing to reduce export and domestic support subsidies in a deal known informally as the ‘Blair House Accord’. There are echoes of the Brexit negotiations in the final push to gain agreement on the Uruguay Round. Theresa May, the British prime minister, would spend most of 2018 telling anybody who would listen that 90 per cent of the Withdrawal Agreement had been finalised between London and Brussels, and that the only remaining matter was to reach a compromise on the backstop for the Irish border – when in fact the backstop may have been only one item in the overall framework, but it was hugely divisive and irreconcilable.
Arthur Dunkel was a chain-smoking Portuguese-born Swiss civil servant who had been director general of GATT since 1980. Over those twelve years he had been the right man for the job. He had a painstaking eye for detail, a necessary pre-condition for putting an agreement of such complexity together. He was also good at cajoling countries to accept that reaching an agreement would require all member states to give something up. But by December 1992 he had run out of steam. Efforts to get a deal over the line were desultory. The previous month Bill Clinton had won the election to become the forty-first president of the United States. He had an ambitious agenda, including trade.
Clinton appointed Mickey Kantor as the US trade representative. Kantor, who would later serve under Clinton as Secretary of Commerce, says, ‘Clinton was deeply concerned about the lack of momentum in the Uruguay Round. There seemed to be a lack of energy to make it happen. I was under huge pressure to get a deal done. I had nothing against Arthur Dunkel, but I knew it needed a change of leadership.’
Kantor knew Brussels-based lawyer Ray Calamaro, a specialist in trade who had met Peter Sutherland when he was still a European commissioner. The two struck up a friendship. Kantor had held talks in early 1993 with Leon Brittan, the European Commissioner for Trade. Both men agreed that a change of leadership was needed to get the Uruguay Round moving again, but finding a replacement who would be acceptable to the most powerful blocs within GATT was not going to be easy. When Kantor rang Calamaro in February 1993 to discuss the dilemma, Calamaro told him Sutherland had all the right credentials. Kantor did some background checks on Sutherland. ‘He had shown tremendous guts and resolve as the attorney general in Ireland and again as a European commissioner. This was the sort of person we needed,’ Kantor says.
At that stage Sutherland had already become chairman of AIB in Dublin. One close friend said it was a role he enjoyed, but he was bored. His period in the commission had instilled in him a deep interest in international affairs, and he harboured desires to become president of the European Commission. The role of director general of GATT was therefore enticing, but there were obvious pitfalls. Sutherland had developed a close relationship with Richard O’Toole, his chef de cabinet at the commission, and trusted his judgement probably more than anybody. So he rang O’Toole when an initial approach had been made about the GATT position. ‘I said well, it seems to be bogged down in a lot of nitty-gritty. There is no guarantee of success because this show has been going on now for nearly seven years.’ The key people in making an agreement work were the EU and the US, O’Toole told Sutherland. It was they who had to make concessions to other countries in order get them on board, and they also had to be willing to make concessions to each other.
O’Toole advised Sutherland that if he was thinking of taking the position then he would have to decide how long he was willing to commit to the negotiations, as well as discovering what sort of commitment he was likely to get from the big players to make it work and figuring out a strategy for making it come together. Sutherland rang O’Toole a few days later to tell him that he was more than likely going to take the job. He also asked O’Toole to examine the existing negotiations more thoroughly. That meant a trip to Geneva for a meeting with Dunkel to investigate the state of play.
‘So I said okay and I went down to Geneva. Dunkel was extremely secretive. We met at a hotel close to Geneva airport. I went through the whole negotiation with him, and it was apparent to me that from a technical point of view, the bulk of the work was done. There were about seven or eight big core issues that needed to be resolved. But they were resolvable. Dunkel himself was very tired, he was worn out. I don’t think his health was great and he was rather depressed – he was very pessimistic about the whole thing.’ O’Toole went back to Sutherland and said he should give Dunkel credit for the progress achieved to date in successfully putting together the technical aspects of a future agreement. Sutherland agreed, and would publicly acknowledge the role played by Dunkel on a number of occasions.
‘I told Peter I didn’t think he [Dunkel] had either the energy or the political force to move it further. That was why, in O’Toole’s opinion, Dunkel was bowing out. Nor did he think the member states would be able to get fully behind Dunkel, because he was associated with too many of the technical decisions that had already been made. The problem, continued O’Toole, was that the trade experts were talking to each other in technical jargon, while what they were fundamentally dealing with at home were political issues. The process had to be taken out of the technical morass and given a political dimension that people could understand; the politicians could then be persuaded to make a deal on that basis.
Sutherland saw it the same way. ‘And so he took on the job, and he asked me to come and work with him as an assistant director general. He managed to persuade the general council that that would be okay. So we soldiered again for two years.’
Arthur Dunkel died at the age of seventy-two in 2005 – broken by the talks, those closest to him claim. The following is an extract from his obituary in the Guardian newspaper:
But he was always philosophical. He saw his role in part as carrying the can for political leaders. A tall, lanky man with permanently bent shoulders and pockets loaded with Gitane cigarettes, he gave the impression of bearing a burden. In some senses, that was the case; Dunkel had an almost papal presence in the Gatt. He was neither a manipulator nor a servant of spin. Yet he understood the power of words. When he spoke, delegates listened and analysed. That is how he provided leadership, direction and vision while endowed with almost no executive power. His essential humanity and decency were uncommon in public life. He had no pretensions to cut him off from those with whom he worked, at all levels: members of the Gatt staff saw him queuing for coffee in the cafeteria, print room workers with whom he checked documents and hard-pressed interpreters got equal attention.[1]
Sutherland met Mickey Kantor for lunch in Brussels in March 1993. It was a crisp Sunday in the Belgian capital. ‘I knew about twenty minutes through that lunch that Peter was the person. I have rarely met anyone like him. He had only about ten days to prepare for that lunch but he was extremely well briefed,’ says Kantor.
Rufus Yerxa, a former US ambassador to GATT and by early 1993 an assistant trade representative under Kantor, also attended the meeting. ‘After the lunch, I remember this distinctly, Kantor and Sutherland went for a walk and it was clear they hit it off pretty well. But Sutherland had one question for Kantor which he had also asked Sir Leon [Brittan], which was I’m not going to take this job unless I’m convinced that you are politically committed to finishing the Uruguay Round.’ He needed Kantor’s assurance, said Sutherland, that he wasn’t wasting his time, that the US was committed to reaching an agreement. ‘Kantor said to him in no uncertain terms that the Clinton administration was committed to finishing the deal. And then after that Sutherland agreed to it and basically the member states of the EU supported him.’ Interviewed at the WTO in 2011, Sutherland himself recalled that lunch. ‘Kantor said, look into my eye. I know you don’t make history unless you make agreements. I knew he meant it. I rang him once from South Africa and used some very undiplomatic language over a disagreement. I said to him, remember what you said in the restaurant, now is the time to deliver.’
Kantor then met Leon Brittan. With the Europeans favourably disposed to Sutherland, Japan and Canada, the other two members of the grouping of countries known as the Quad, quickly came on board, and Sutherland was offered the job of director general of GATT. Sutherland officially took up the role on 1 June 1993; with Clinton pushing Kantor to have the talks wrapped up by the end of the year, it was a daunting task in almost every way.
On his first day Sutherland met with British Prime Minister John Major in Downing Street. It was a meeting of minds. The two men got along very well and developed a good rapport. Major assured Sutherland that he would give him whatever support he needed.
Even though a good deal of progress had been made since the commencement of the talks in 1986, Sutherland knew that if differences between the Quad member states were not resolved then the process could be easily derailed. Agriculture had been one of the main sticking points since talks first got underway. There was a yawning chasm between the US and the EU on agricultural products. If Sutherland was to succeed, then he would have to find a way of reaching a compromise. The Blair House Accord, finalised in November 1992, was merely a sticking plaster – as Sutherland quickly found out.
The next head of state he met was Edward Balladur, the prime minister of France. Balladur raised a number of red flags. He and Helmut Kohl, the German Chancellor, had held a number of meetings on agriculture, and both men issued a joint statement. This was interpreted by the French as meaning the Blair House Accord would have to be renegotiated. If that were to happen then it would be a major setback for the talks. A separate meeting between Kohl and Sutherland, however, proved to be extremely useful; Kohl not only signalled a willingness to back Sutherland, but gave him a number of tips on how to deal with the French.
Sutherland knew that the relationship with Balladur would be critical. Notoriously protectionist when it was in their interest, the French had the ability to veto the EU position, which in turn could collapse the talks. As Sutherland explained in a subsequent interview, he requested a one-on-one meeting with Balladur. ‘I told him I recognise your concern, I recognise there is huge political pressure on you at home, but there must be an agreement. There has to be compromise. Whatever drawbacks you perceive in an agreement, they are nothing to the potential chaos that would result if there is no agreement at all.’
Sutherland then went to Japan, where he had a number of fraught meetings with farming groups over rice production and quotas, and to India, where tricky negotiations took place over the issue of intellectual property rights. ‘A lot of things could have gone wrong,’ says O’Toole. ‘But I think all of those parties did make advances in their positions as a result of the persuasive effort of Peter, sufficient to make the thing come together.’
Roderick Abbott, number two on the European negotiating team, had his first encounter with Sutherland just after he had been ordered by his boss to withdraw all of the EU’s bilateral offers to Japan because it had offered no concessions on footwear. Footwear was a long-standing problem with the Japanese. They had quotas and enormous tariffs, and they were not prepared to compromise on either. The Japanese negotiators insisted that they could not afford to offend that particular segment of Japanese society, says Abbott. ‘So we withdrew all our offers, including our offers on shoes because they didn’t reciprocate. And that led to me being summoned by Peter down to a meeting of his negotiating committee.’ Abbott had been called to explain himself because withdrawing the offer to the Japanese affected other countries – in particular the Brazilians, who also sold footwear to the EU and issued a protest. ‘That was quite a daunting experience,’ says Abbott of his meeting with Sutherland. ‘We were in the largest negotiating room, probably getting on for a hundred people, all very senior, and I had to go and dare say, “Look I’m sorry. These were my instructions and I carried them out”.’ Sutherland noted Abbott’s explanations and urged the EU and the Brazilians into bilateral discussions, which eventually led to an agreement. The EU and Japan also settled their differences.
Abbott remembers that his main focus at the time was to ensure that the EU-Japan-Canada-US quadrilateral maintained progress in moving towards zero tariffs across a number of different sectors. ‘We ended up with something like twenty different sectors where we all agreed to go to zero tariffs,’ he adds.
The process entailed an extremely punishing schedule for Sutherland, who visited five continents during that period. He was also commuting from Dublin, as his family had not relocated to Geneva.
Sutherland was asked in 2011 what lessons from the Uruguay Round would help move along the Doha Round, which had hit an impasse after ten years of negotiations. He responded that the success of any negotiation hinged on ensuring that people in the right places were persuaded by the right arguments. ‘People say I was a bit of a bully. I hope I did it with a smile on my face. I don’t think I would have done anything differently. I had the right people around me. You have to get the right people. If you have a trade minister spitting bile into the ear of a prime minister you have a problem.’[2]
The skills picked up by Sutherland in the Law Library, probably more than any other factor, were key in getting the negotiations over the line: the cajoling, the gentle persuasion, the inability to take no for an answer. Mickey Kantor describes him as a ‘force of nature. He was very charming, but I always knew where I stood with him. He was incredibly tough.’ Rufus Yerxa says there were a few times when Kantor felt he was being pushed too hard by Sutherland on certain issues. ‘But I don’t think they ever really accused Sutherland of having a bias towards the European approach. Sutherland was willing to be really hard on the Europeans, particularly on some key issues like agriculture. And in those days we had fought out a lot of the US–European fights earlier in the round, so there wasn’t really a problem in the closing stages – for example industrial market access, where the US insisted on a request offer approach rather than a Swiss formula.’[fn1] The US eventually prevailed with that argument, while many of the market access negotiations were done on a strictly bilateral basis. ‘My recollection of how Sutherland handled things is he didn’t get involved in taking sides between the US and EU where we had differences, but he pushed us along to a solution and said it would be the US–EU blockage which was holding things up. And so he encouraged both sides to get over their differences.’
Yerxa says that as the December deadline approached there were many showdown meetings between Kantor and Leon Brittan. ‘A lot of issues were still unresolved – a lot of agriculture issues, a lot of issues related to fights between the US and EU over aircraft subsidies and audio-visual, financial services, a number of other things.’ Sutherland, says Yerxa, played a key part in several high-level, intense negotiating sessions. But his main task was keeping things rolling in Geneva, finalising the text in areas other than those where the US and the EU, and sometimes maybe Japan and Canada, were fighting.
Finally, after months of resolving issues in Geneva, while high-level bilateral negotiations simultaneously took place between the US and the EU, a basic deal to approve the text was reached in December 1993. ‘Sutherland gained a reputation during that short period for being a very effective closer. He pushed everybody in the direction of a deal. He played hard ball with the Japanese, he played hard ball with the Europeans, he played hard ball with us. And eventually we got a deal.’
According to Abbott, Sutherland was very effective at ensuring that the core countries – the US, the EU, Japan and Canada – were all going in the same direction. By talking to their people, he would find out who was blocking what. After months of hard bargaining and compromises, the December deadline was fast approaching. It was inevitable there would be a few last-minute roadblocks. This, says Yerxa, was when Sutherland really burnished his credentials.
‘He was a very persuasive speaker and a great advocate. He was also a very good lawyer, by the way.’ He recalls one incident in the very closing hours of 15 December, there was still a deadlock between the US on the one side and India and Pakistan on the other over some language in the textiles agreement. The US chief textile negotiator Jennifer Hillman and the chief US negotiator John Smits were refusing to move, and so were India and Pakistan. Both were threatening to veto the whole deal after the US and the EU signed off on it. ‘It was very late in the night. It was actually the night before we were all to meet in the International Conference Centre to sign off on the deal. I got a call at something like two in the morning to come down to Peter’s office. We had a session to sort this stuff out. Kantor had gone to bed up at the InterContinental Hotel thinking the deal was completely done.’ Kantor had refused to budge on the textile agreement and presumed that Sutherland would push it through.
But India and Pakistan would not move from their position and were demanding changes. ‘Sutherland finally came up with the language during that session. He crafted some language himself with his legal reasoning and skills that he thought was a good compromise. And then he kind of forced me to say yes to it, but I told him I couldn’t say yes to it until I talked to Kantor. I had to call Kantor at three thirty in the morning and wake him up.’ Kantor was impressed with the final language, only asking if Yerxa thought Washington would find it acceptable. The consensus was that they would, and the deal was done. ‘I make that point because it showed Peter’s skill with crafting compromises and legal reasoning. He was a very good lawyer and he had a force of personality.’
As Brendan Halligan noted, Sutherland’s ability to draft documents had been picked up during his early days in Fine Gael, learned from people such as Jim Dooge, Garret FitzGerald and Alexis FitzGerald. It certainly stood him in good stead at this crucial moment in his career.
Every country seemed satisfied. Most importantly, the US and the EU were willing to sign the draft agreement. A historic deal was in sight. Then, at literally the last minute, the Japanese ambassador raised a red flag that had the potential to collapse the entire talks. Seven years of intense and difficult negotiations were on the line. The US had insisted that anti-dumping regulations had to be very strong. The Japanese wanted to weaken them. There was a greenroom adjacent to the main negotiating room. Sutherland requested a bilateral discussion with the Japanese ambassador.
According to those present, what happened in that room would not be recommended in too many diplomatic handbooks. Sutherland pinned the Japanese ambassador against the wall. There was a lot of screaming and shouting – all coming from Sutherland, it should be noted. He demanded the phone number of the Japanese prime minister, threatening to ring him, even though it was the middle of the night in Japan, and tell him that his ambassador was about to wreck the first multilateral global agreement on trade ever achieved. When the ambassador declined to pass on his prime minister’s number, Sutherland went ahead and announced at the main press conference that the deal would be signed by every member state. The stakes for the Japanese had been dramatically raised. The ambassador would have to publicly veto the deal if he wanted to follow through with his objections. He didn’t. That was it. The deal was signed.
The main points that were agreed: the richer industrialised nations agreed to cut tariffs on industrial goods by 40 per cent. Over 40 per cent of trade would now be done on a duty-free basis. In the sensitive area of agriculture it was agreed that domestic farm subsidies would be cut by 20 per cent and subsidies on exports by 21 per cent. In terms of intellectual property, patents would be protected for twenty years and copyright for fifty years, while trademarks would be given stronger protection. New rules were introduced as to what constituted dumping, which is the practice of a country lowering the price of its exports to get an unfair market share. It made it much harder for a country to claim that products were being dumped so that they could unilaterally impose tariffs.
After each of the 125 countries that signed up to the agreement in December 1993 had gone back to their governments to sign it off, Sutherland banged the gavel at a lavish ceremony in Marrakesh on 15 April 1994 to officially conclude the Uruguay Round. Each country’s representatives were requested to come to the stage when it was their turn to sign. As the Americans’ turn came, they made no movement. Sutherland went down to the US delegation, which included Kantor and Al Gore, the vice-president. Kantor said, ‘Peter, we have a problem and we can’t sign.’ Sutherland replied: ‘No, you don’t have a fucking problem. Get up there and sign or I will drag you up there.’ Kantor laughed and turned to Gore, saying: ‘I told you he would react like that.’
The agreement was 22,000 pages long and weighed 385 pounds. ‘I’m tempted to do an Irish jig on this table to show what I think,’ Sutherland told reporters at the ceremony. ‘No one got everything they wanted, but that is the nature of these negotiations.’ Sutherland was now in the league of international big hitters.
*
One of the more intriguing questions that arises is whether the Uruguay Round would have happened anyway. Was a consensus forming on the benefits of global trade that would have pushed the deal over the line?
Pascal Lamy says it was a combination of factors. ‘It’s a mix of circumstances, luck and Peter’s own personal input in a very, very complex chemistry. The talks started in 1986, so there had been quite a lot of water under the bridge, but the experience of the negotiations, which I know well, doesn’t tell us that having talked for so long the negotiations would succeed. I’m pretty sure Peter’s input was pretty substantial. And that’s the sort of memory he left in Geneva. Many people in Geneva think he came to the WTO to push his career and was not committed enough to the institution to stay much longer, which probably could have been the case. But again Peter was very ambitious – moving forward, taking one more bit of the ladder and then looking to another ladder was something which was substantial to him.’
Kantor, however, says it is unlikely that the Uruguay Round would have concluded without Sutherland’s input. ‘He was absolutely critical. I really don’t think it could have been done without him. He was absolutely relentless. He had the right mix of charm and heft. Look at the Doha Round, it started in 2001 and there is still no deal.’ John Major agreed at the time that in his opinion, the success of the Uruguay Round owed everything to Sutherland.
But the drama was not yet over. Later that year, when the trade deal was due for ratification by the US Congress, Sutherland got a call from the White House to say there was a problem. The Republican Party looked set to block it. Sutherland arranged to meet Newt Gingrich, the Republican Speaker of the House.
‘He told me he had two problems. Agriculture and sovereignty. Agriculture was dealt with. I told him sovereignty had stopped the US from creating the ITO [International Trade Organisation] in the late 1940s. Sovereignty is not something you should be concerned about. I drew the distinction between the WTO and the EU. In the EU national courts can be invoked to support international agreements against their own governments. That is a degree of supranationalism beyond what we have asked for. But what we have done is ensure there are enough sanctions in trade so that if you don’t comply with the adjudicating body of the WTO, there will be repercussions. So I said it is a major step forward and you should go with it. At the end of the interview he said, “I will”. And that was how we got it over the line.’[3]