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Antigua attorney speaks out on landmark WTO case

DOJ, USTR keep heads in sand

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House of Cards With the recent news that the Conference of the Caribbean Community (CARICOM) has joined the EU, Japan, and India in supporting tiny Antigua in its WTO case against the US regarding the cross-border provision of gambling services, we thought the time was right to finish our interview with Mark Mendel, lead counsel for Antigua in this landmark trade case, that we began back at GIGSE in Montreal.

Mark, you've been Antigua's counsel on this case for a while now, and I thought maybe you could give us a little history of the case for our readers who might not be familiar with it.

Antigua brought this case in 2003, primarily as a result of increasing efforts of the United States Department of Justice to prevent Antiguan companies from providing remote gambling and betting and services to consumers in the United States. We had evaluated the legal issues and determined that under the WTO's General Agreement on Trade in Services (the "GATS"), the United States had made an unrestricted commitment to allow the cross-border trade in gambling and betting services from other WTO members, such as Antigua. Thus, the actions by the DOJ to stop the industry amounted to a violation of an international treaty.

The real objective of the case was to bring the United States to the negotiating table for some fair and reasonable solution that would allow Antiguan operators to provide services to consumers in the United States on some agreeable middle ground. Although, frankly, under the GATS Antigua is entitled to have the United States repeal its offending legislation, that was never really our plan or expectation. We just wanted some fair and reasonable treatment.

Unfortunately, from the beginning of the case to the current date, the United States has shown no willingness to compromise at all. So, we have tested them at the WTO through its dispute resolution process and have won at every stage. There is enormous and very complicated history here, but basically as the United States would not compromise we had to prosecute our case, which we had assessed as very sound. Through the smoke and chaff, the WTO has consistently said the United States had agreed to allow these services and by prohibiting them, the United States was in violation of the GATS.

The WTO rejected a so-called "morals" defence pushed by the United States at the very last moment of what might be called the original "trial" of the dispute at the WTO on the basis that the United States - which had said it prohibits all remote gambling throughout the country - could not establish that it did indeed prohibit all domestic remote gambling as well as that from foreign countries.

In essence, if the United States was going to say that "remote" gambling was so bad that it was necessary to prohibit it across the board, then it indeed needed to be consistent about that, and not use the claim as a way to discriminate against foreign trade. Although the discussion of this issue in the earlier rulings is somewhat impenetrable to the non-WTO literate (and was even so to many of them as well), the most recent ruling that came out in March of this year made it crystal clear. The United States has a wide variety of legal, domestic-only remote gambling operating currently.

Further, something that so many people have not realised but this last panel finally got right, and that is that federal law doesn't prohibit remote gambling at all - just remote gambling that crosses a state or international border. By leaving states free to have as much intrastate remote gambling as they want, but prohibiting services that cross a border, the federal government cannot possibly say that it prohibits all remote gambling. And, of course, the crossing of a border is, by itself, not a logical basis for discriminating against services. At least not under international law.

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