Is the US looking to buy off Antigua in their trade war over online gaming?

by Lou on May 23, 2007

Is Antigua the ‘Mouse that Roared?’

We haven’t talked about the US versus Antigua and their World Trade Organization (WTO) dispute in a while, but new information is available right now.

According to Antigua’s attorney, Mark Mendel, the small Caribbean nation of fewer than 80,000 residents plans to file a claim asking for compensation from the US in exchange for a ban on Internet gambling.

Compensation is one way to resolve the dispute
Filing a compensation claim is one of the avenues open to Antigua although, according to Mendel, determining how much compensation is required to offset US actions is difficult to determine. Mendel said that Antigua will also continue on the WTO track, because the US will have difficulty withdrawing from its WTO commitments.

Figuring the price
Compensation would probably be predicated on the loss of income for the 32 registered online casinos in Antigua. Income fell to $130 million last year from a high water mark of $1 billion in 2000, when US restrictions on online gaming were first announced.

Earlier this month the US moved to “clarify” its commitments to the WTO, saying that opening its market to offshore Internet gambling was “never intended” to be part of pledges made when joining the trade arbiter.

How the WTO rules come into play
WTO rules provide for a country to withdraw from commitments to open its services market to foreign competition. But it can’t opt out of tariff cuts. Instead, the US will have to negotiate with any countries that object to the USA’s plans. By all appearances, the resolution to this WTO dispute will probably be a negotiated settlement between the US and Antigua, unless other larger and more powerful nations, who might want to have Antigua’s back in this situation, stand with them and make similar demands once the US declares its intention to back off on its commitments.
The USA’s level of hypocrisy can be overwhelming at times
Perhaps Antigua’s attorney, Mark Mendel put it best when he noted, “While the withdrawal of a commitment might be at least understandable if the US possessed a strongly anti-gambling culture, this is certainly not the case here.”

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