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Antigua attorney speaks out on landmark WTO case

DOJ, USTR keep heads in sand

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And how about the procedures at the WTO - in a step-by-step kind of way, how do those work? Certainly the terminology is quite different, at least as far as the procedure goes. You don't go to court, since this is more like an arbitration proceeding than a typical court case, you convene a panel, for example. What does that consist of? Who's on it? It's not the most transparent process- what are the inner workings of the WTO like?

It is a very European process. The first "panel" - really, the initial or trial court - is selected from a large panel of international volunteers with good trade credentials. In our case, the panel consisted of a lawyer from England, a diplomat from Thailand, and a trade academic from India. You present your case substantially by written submission. There are no witnesses and no testimony. In the first process, you have two presentations before the panel, which are really oral presentations of written statements, followed by a question and answer session that can be good, bad, or useless, depending upon your panel.

A loss at the panel stage leads to a binding decision unless the loser quickly appeals, which the United States did in our case. An appeal goes to the WTO's "appellate body", which is a standing body of seven members from a number of countries, all of whom must be lawyers in their home countries. Your case is assigned to a random panel of three of the members, and it is much like an American appellate process - submission of briefs and counter briefs followed by an oral hearing where you make a presentation and then may or may not be subject to rigourous or not-so-rigourous questioning.

The appellate body is supposed to consider matters of law only and not make new findings of fact or survey new evidence. The one key power the appellate body lacks is the ability to "remand" a case - that is, send it back to the panel for reassessment based upon the proper legal standards and reasoning as adopted by the appellate body. All that it can do is approve or reverse a case, in whole or in part. I was very disappointed in the appellate body's treatment of our case. While we maintained our victory, the reasoning was so opaque and the review of many issues so shoddy or inconsistent, it was really very poor work. But there is no further appeal of a case after the appellate body has its go, so both sides are stuck with it.

After we won the appeal, the United States was supposed to change its laws to accommodate the decision. I could describe for hours the various delaying tactics and twists and turns that have gone on since then, but I can summarise by saying that the WTO gave the United States a period of time to bring itself into compliance. During this period, the United States did nothing, but at the end of the period announced to the WTO that they were indeed in compliance. So, once again we brought them before a panel to assess the status of their so-called "compliance".

It was here that we won clearly and decisively in the decision announced on 30 March of this year. After that ruling, it was really impossible for the United States to argue any more that it had "won", or that its prohibition had been "broadly upheld" or that it just needed to "clarify the Interstate Horseracing Act", as the United States had publicly been saying. I was and remain very happy about that ruling, and am extremely grateful for the excellent work done by the panel. That panel, by the way, had the original panelist from Thailand, a trade lawyer from Chile and was chaired by a distinguished businessman from Sweden.

So where are we at now? The US keeps losing, but nothing has happened yet. The Antiguans have formally requested to be allowed to suspend their obligations to the US, but when can we expect something concrete to come out of this? Clearly, the WTO in uncharted waters here.

We are no doubt headed to an arbitration to determine the trade concessions that Antigua can levy against the United States until it complies with the decision - or until we can finally negotiate a fair settlement. That process will start in September probably. The trade concessions process is provided for in the WTO's rules in order to make a hesitant dispute loser to speed up the compliance process. It has not been used very much, because generally losers either comply or they negotiate reasonable settlements. Here, the United States has done neither, so we really have no choice but to see what type of sanctions we can get and whether these sanctions can motivate the American government to act.

What you basically do with these trade sanctions is punish an "innocent" sector of the loser's economy to compensate for the damage done to the winner's economy on an annual basis by the failure of the loser to comply. Thus, the loser makes a completely unrelated sector of its economy suffer for its protectionism in another sector - here, to prop up its domestic gambling economy, the United States is in essence offering up other sectors for punishment. Not really a very smart political decision, usually, so most countries don't let it get to this stage.

And now, the United States has really upped the ante by trying to solve the dispute by withdrawing the commitment to gambling services that it had initially made some ten years ago or more. Although we had not planned on this being the case, our dispute has presented a virtual plethora of firsts in WTO litigation. It is incredible to me to think that in the dozens and dozens of disputes - some very, very big - the United States has had at the WTO, they are taking unprecedented actions in this simple case brought by tiny Antigua.

Although we of course were aware of all of the possibilities when we brought the case, we had surveyed the United States' actions in all of its dispute cases at the WTO, and found that it had always either complied or was on its way to compliance. But in the 25-plus cases it had expressly lost, it never once had refused to comply, much less try to withdraw its treaty obligations in the affected sector. So, particularly given the Antiguan government's willingness to compromise to some extent, we fully expected the United States to do the same here.

Given the massive prevalence of gambling in the United States, this "moral issue" thing is simply a red herring. It really is amazing that the United States is willing to risk the sanctity of the WTO's dispute resolution process on this case. But then again, when I was assembling this case back in 2002, we didn't yet know just how intransigent this administration could be in virtually everything it does. Maybe that is playing a role here, I just don't know.

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