The New Pirates of the Caribbean

by Lou on May 26, 2007

Antigua and Barbuda—an island nation in the Caribbean of 70,000—has asked that the World Trade Organization (WTO) allow it to suspend its intellectual property obligations to the United States.

Although the US government (read: Bush Administration) has shrugged their shoulders at the tiny nation’s victory at the World Trade Organization and have stated that they will do nothing about it, the Antiguans bat last and they’re carrying a very big stick.

Most trade disputes are based on tariffs. Your price subsidy leads to my retaliatory tariffs; you get the picture. But Antigua can’t play that game on equal footing with the United States. With only 70,000 people any retaliation on their part won’t ever be felt by a country the size of the United States. So what’s a (small) body to do? Well, it seems the WTO treaty obligations have an answer for that.

Repeated violation of WTO commitments following a contrary WTO ruling allows a victimized country such as Antigua to suspend its own obligations to the offending nation. This is much more damaging than tariff adjustments could ever be.

If the WTO allows Antigua to suspend all intellectual property obligations to the United States, Antigua would have an unlimited right to reproduce software, music, or any other intellectual property for its own benefit. In other words, Antigua could practice intellectual property piracy with the full and complete blessings of all the nations that are signatories to WTO agreements, and that’s most of the trading nations we do business with on a daily basis.

America has continued efforts to eradicate internet gambling in the three years since Antigua challenged—and defeated—the US before the WTO. Antigua’s plan was to develop its e-commerce segment to reduce its dependence on tourism, but American interference has caused the Antiguan online gaming industry to shrink by about 85 per cent.

Antigua is not alone in their plight, either. The UK has seen the DOJ has repeatedly arrest British executives who happened to set foot in the United States. How long can this go on? I’m not sure, but I do know that intellectual property giants such as Microsoft will wield a heavy hammer in Washington if US actions allow tiny Antigua to protect itself by inviting software pirates to their shores. If Antigua does this, you’ll see a brand new version of Pirates of the Caribbean. No swords and cutlasses here, matey; these modern day pirates will be copying and selling clone products at a fraction of the price, as they drink rum punch and dip their toes in the warm Atlantic waters.

The US was one of the driving forces behind the creation of the WTO, and has gotten more from it than they will ever lose in the Antigua dispute. Even now the US is threatening to bring cases against China to the WTO, and these are trade disputes where real money is at stake. The WTO certainly can’t be expected to look favorably at the United States in one dispute when they continue to refuse to obey WTO findings and rulings in another.

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