It’s Official: Italian to Head Trade Body : Commerce: New world organization’s first director general issues warning about ‘economic nationalism.’

The first director of the new international body overseeing global trade, seeking to allay U.S. concerns that he would be soft on European protectionism, on Tuesday warned of “the danger of economic nationalism.”

After spending much of the morning meeting with senior Clinton Administration economic officials, Renato Ruggiero, a former Italian trade minister, won the Administration’s official blessing to become director general of the World Trade Organization.

The U.S. government had energetically opposed his candidacy until its favorite, former President Carlos Salinas de Gortari of Mexico, abandoned his own campaign for the post.

The former Italian official is expected to be given formal approval by the World Trade Organization’s delegation heads in Geneva today.

Ruggiero, whose long experience in the tightly knit world of European diplomacy had led to U.S. concerns that he would favor Europe’s politically powerful agricultural interests and would lack political clout, said that “my ambition is to be director general of all the contracting parties.”

Speaking to a small group of reporters, he said that he had two goals for his four-year term: opening markets through free trade and strengthening the global system that governs international commerce.

But warning that the world trading system is also facing the prospect of greater protectionism, he said: “The danger of economic nationalism is extremely bad and worrying.”

Among the leading U.S. concerns was that Ruggiero would favor traditional European policies supporting agricultural subsidies, which are being cut back under the international trade agreement that was completed in 1993 after seven years of negotiations.

Ruggiero and U.S. Trade Representative Mickey Kantor went out of their way, however, to emphasize that any disagreement between them had been swept away. The U.S. opposition ended when agreement was reached that Ruggiero, 64, would serve only one term and that the following director general of the new trade body would not be from Europe.

The Administration’s decision to abandon its objections to Ruggiero prompted sharp complaints from critics who said they feared that the United States would be outvoted in the world trade body.

Ruggiero said that the leading items on the agenda of the new organization, which is replacing the General Agreement on Tariffs and Trade, were well established as a result of the 1993 agreement.

These include negotiating new agricultural trade pacts and revising trade regulations governing the services sector by the year 2000.

In addition, he said, his agenda would include dealing with issues linking labor standards and the environment with trade matters, and establishing a sound mechanism for resolving trade disputes between the more than 120 members of the trade body.

He said that some 500 country-to-country agreements protect international private investment. It is time to reach multilateral agreements to provide even greater protection and wider enforcement of the pacts, he said.