US and Europe in struggle for control of OECD

EUROPE and the United States are set for a battle over the control of the Organisation for Economic Co- operation and Development (OECD), the economic forecasting and co-ordinating body based in Paris.

Britain is proposing Lord Lawson, the former Chancellor of the Exchequer who served under Margaret Thatcher, to be the next OECD secretary-general, while France's candidate is Jean-Claude Paye, the current secretary-general whose second five-year term ends in September.

With a German candidate also in the running, the US is promoting Donald Johnston, a former Canadian minister, for the post in the belief that the OECD has become too 'Euro-centric'.

The 24-member organisation, essentially in origin the industrialised economies of West Europe, North America, Japan, Australia and New Zealand, prepares surveys of member countries' economies and of important issues, such as unemployment, facing the world economy. It then lays down guidelines for future policy. Every spring, the OECD holds a two-day council of foreign and finance ministers, a high-powered event preceding the annual economic summit of the Group of Seven leading industrial nations.

Mr Paye, 59, angered the Americans by what was seen as an anti- free-trade stance during last year's tense General Agreement on Tariffs and Trade (Gatt) talks. According to European officials at the OECD, the Americans believe the organisation needs someone who will concentrate on the problems of emerging economies of Latin America and Asia and open the organisation to the former Communist states of East Europe.

Kenneth Clarke, the Chancellor of the Exchequer, confirmed during a visit to Paris two weeks ago that London would back Lord Lawson as its candidate. He said he thought two terms were enough for a secretary-general, meaning that Britain would be unlikely to give Mr Paye much support even if it did not have its own candidate.

However, in answer to a question from a French audience, Mr Clarke indicated that Britain was more interested in promoting Sir Leon Brittan, the European Commission's external trade commissioner, to be its next president, than in Lord Lawson's candidature for the OECD. Sir Leon faces stiff competition from Ruud Lubbers, the Dutch Prime Minister.

At the OECD, David Aaron, the US ambassador to the organisation, recently wrote a letter accusing the secretariat of not playing a 'positive' role. He said it should have called for lower interest rates and more growth in Europe to counter unemployment.

The organisation, with Mexico expected to become the 25th member this year and with a South Korean application expected to become operative within two years, is expected to expand further to include some East European states by the end of the decade.

The US and Britain believe the OECD needs a political heavyweight to raise its profile while other states want a non-political boss to preserve its reputation for impartial analysis.

An OECD study of unemployment will be under scrutiny at the G7 'jobs summit' in Detroit next month called by President Bill Clinton. Officials said Washington had begun to take a new interest in the OECD, believing that it could become an instrument in promoting US foreign policy and domestic economic aims.