Feeds

American gamble or bluff: WTO members bet on Antigua

EU, Japan, and India join sanctions call against US

The Power of One Infographic

Analysis Antigua yesterday filed for formal trade sanctions against the United States, demanding $3.4 billion in compensation from the truculent, recalcitrant super power for failing to open its domestic market to remote gambling services. Antigua, as expected, was not alone; the hottest online gaming market in the world, the EU, also filed for sanctions.

Antigua has been embroiled in a four year battle with the US over the provision of remote gambling services, and the WTO has repeatedly ruled against the US, in increasingly stern terms. After the US tried to insist to the WTO that it had brought itself into compliance without doing anything at all – a novel argument that riled the WTO compliance panel – the WTO issued a definitive and far reaching ruling in favor of Antigua, opening the door for sanctions for the tiny Caribbean country that has seen one of its principal industries pummeled repeatedly by the American Department of Justice (DOJ).

The rules of the WTO typically provide for traditional tit-for-tat trade sanctions, but for tiny countries like Antigua that depend heavily on imports, such an approach can be economically devastating, while doing virtually nothing to penalize the offending nation. The WTO thereby provides an alternative; countries may suspend their own obligations to the offending country. Antigua thus could sell unlicensed copies of American movies or software, for example, to compensate itself for losses resulting from the American actions.

Although gambling is the kind of allegedly trivial activity that inspires strong reactions in many people, important principles of international law and trade are at stake: just what kind of internet do we want, and to what extent can one country pick up its proverbial marbles and go home when trade disputes go bad? Do we want the freewheeling internet that characterized its early years, or a tightly regulated and controlled internet, subject to the prosecutorial whims of the administration of the day? Regardless of what one thinks of gambling and gamblers, just how far should American police jurisdiction really go?

The United States Trade Representative’s (USTR) has taken a similar hard line position to that of the DOJ, and it’s clear from the American arguments in front of the WTO that the two have been working in concert on this case. Not surprising, since this dispute has revolved around American criminal law and how it impacts internet gambling.

What is surprising is the extent to which the USTR seems willing to abandon the decades of hard-fought negotiations covering the international trade in services that ultimately resulted in the General Agreement on Trade in Services (GATS) for a policy ultimately damaging to American trade interests. The USTR, after pretending the US didn’t really know what it was doing when it failed to exempt gambling services from its schedule of commitments (countries are allowed to exempt “immoral” services or products, but cannot discriminate in doing so), and repeatedly getting hammered by the Antiguans, has decided to redefine its GATS commitments to eliminate gambling services, thereby opening the door for other WTO members to do the same. It’s not hard to understand how such an approach may quickly render international agreements worth less than the paper they are printed on.

And so, today, what is expected to become a parade of countries demanding sanctions against the United States as a result of its refusal to comply with WTO rulings on gambling services began to form, as Japan and India piled it on with more demands for compensation. Every other signatory affected will have a right to demand sanctions, and those sanctions may, depending on the circumstances, be applied against any American industry, from automobiles to semiconductors.

Perhaps this is just a game of chicken by the USTR, a kind of unilateralist posturing, although that seems hard to believe considering the floundering state of the current DOHA round of negotiations; just where the WTO goes from here, no one really knows.®

Burke Hansen, attorney at large, heads a San Francisco law office

Boost IT visibility and business value

More from The Register

next story
UK government officially adopts Open Document Format
Microsoft insurgency fails, earns snarky remark from UK digital services head
Major problems beset UK ISP filth filters: But it's OK, nobody uses them
It's almost as though pr0n was actually rather popular
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
MPs wave through Blighty's 'EMERGENCY' surveillance laws
Only 49 politcos voted against DRIP bill
Help yourself to anyone's photos FOR FREE, suggests UK.gov
Copyright law reforms will keep m'learned friends busy
EU's top data cops to meet Google, Microsoft et al over 'right to be forgotten'
Plan to hammer out 'coherent' guidelines. Good luck chaps!
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Reducing security risks from open source software
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.