World Trade Organization ruling favors Antigua

by Lou on March 31, 2007

The World Trade Organization (WTO) released its public ruling in favor of Antigua and Barbuda (Antigua) in its dispute over internet gambling with the US. Last month a confidential version of the report was provided to the parties and leaked to the media, so today’s ruling came as no surprise.

“It vindicates all that we have been saying for years about the discriminatory trade practices of the US in this area, and we look forward to the US opening its markets on a fair and balanced basis as the WTO agreements and the international community requires,” said Minister of Finance and the Economy for Antigua, Dr. Errol Cort.
Cort added in a statement to Bloomberg News that today’s ruling “…offers hope to the global online gambling industry currently under siege by the U.S. Department of Justice.”

The big question is what happens next. The US is likely to appeal this finding, and if they do they’ll probably lose, but that will chew another year or so.

Antigua, with a population of approximately 70,000, can’t exert any real pressure by themselves. Their economy is too small to impact the US simply by increasing duties on goods.

They can seek sanctions called “cross-retaliation,” in which they would withdraw intellectual property protection for U.S. trademarks or copyright. These sanctions are legal at the WTO when an economy can’t afford to impose traditional sanctions such as higher customs duties on goods.

While this is a drastic measure, it would have the effect of inviting software pirates and other intellectual property thieves to do business in Antigua in order to create the kind of disruption designed to force the US to bring its online gaming laws in line with their obligations to the WTO.

The prognosis is mixed. Mark Mendel, head of Antigua’s legal team, said: “The United States on one hand prohibits competition in remote gambling from Antigua while on the other promoting and protecting a massive domestic industry. If the WTO agreements apply under any scenario, they apply here.”

Las Vegas attorney Anthony Cabot was much more cautious as he assessed the situation, saying: “It means very little. Antigua is simply too small a trading partner with the US. If there is any potential in the ruling, it does at least give a roadmap to follow for any bigger trading partner with the US.”

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