OECD favourite calls for reform

(First Edition)

DONALD JOHNSTON, Canada's candidate and current favourite to head the Organisation for Economic Co-operation and Development, said yesterday that the institution needed to become more global, less bureaucratic and focus on labour markets, trade and the environment to remain relevant in the 1990s.

Mr Johnston is Nigel Lawson's main rival for the post, which may be decided in early June by the annual ministerial meeting of the OECD - the forum for the leading 25 industrial countries.

The OECD secretary-generalship has hitherto been the exclusive preserve of Europeans, but Mr Johnston has strong backing from the US and Japan, the OECD's two main shareholders, which may reduce their support for the organisation if he is not appointed to the post.

The Canadian, currently president of Canada's governing Liberal Party, refused to be drawn on the consequences of a failed candidacy, but he underlined the importance of improving the dialogue between the industrialised world and the rapidly growing countries of the Pacific rim.

'With their high growth numbers they have a major impact on world trade and represent a locomotive for growth,' Mr Johnston said.

'Someone from a non-European country gives the organisation a global perspective and, from that point of view, a Canadian is well placed since Canada has special relations with several European countries and a growing relationship with the Pacific rim.'

On a number of economic policy questions, the US has hinted that without European co-operation it will place more emphasis on Asian Pacific Economic Co-operation.

Mr Johnston would focus the OECD on the world's three main trading blocs, which are at present a secondary OECD concern, and launch objective studies on trade and the environment. He would also build a closer relationship between the OECD and the new World Trade Organisation - which will police the just-completed Uruguay Round world trade agreement. The OECD should play a highly significant role in analysing 'fair trade', thus helping to ensure the dismantling of non-tariff barriers to OECD goods in Pacific rim markets, the environment and competition policy, Mr Johnston said.