Is the US Starting to Bend in its WTO Dispute?

by Lou on June 25, 2007

Antigua, which won a World Trade Organization ruling last year when the US restricted their access to online gaming services, is asking for WTO authorization to target American trademarks and copyrights if the US refuses to change its legislation.

Last December the WTO ruled that US law unfairly targets offshore casinos. They told the US that restrictions against sport betting could be retained if they were also applied to American businesses, such as remote horse betting and fantasy sports leagues.

Sanctions would come into effect “shortly,” Antigua said, unless the US requests a WTO arbitration panel on the level and scope of the sanctions.

“While we realize this is a significant step for Antigua and Barbuda to take, we feel we have no other choice in the matter,” said Errol Cort, Antigua’s Finance Minister.

Cort added, “Until such time as the United States is willing to work with us on achieving a reasonable solution to this trade dispute, we will continue to use every legitimate remedy available to protect the interests of our citizens.”

Gretchen Hamel, the US. Trade Representative’s spokesperson said, “We will continue to work with Antigua and Barbuda to try to find a mutually satisfactory resolution to this dispute.”

It may be a telling phrase. Reading between the lines, this appears to be the first time Hamel suggested that the US would be willing to negotiate a settlement with Antigua. A negotiated settlement would amount to compensation paid by the US to Antigua, to buy its way out of this situation.

But it may be too little, too late. Recently Costa Rica joined the European Union, India, and Japan in claiming the US’s stance on online gaming violates treaty obligations under the WTO, and are seeking compensation in accordance with WTO procedures.

While buying off Antigua, a tiny nation with a population hovering around 70,000 doesn’t appear all that difficult, buying off trade giants such as the EU is just prohibitively expensive. Some solution will have to be worked out, or else the US will find itself fighting the WTO, an organization that has provided them many more benefits than the current issue that’s dogging the US Trade Representative.

If the US is not willing to live up to its treaty obligations what will they do when Antigua, the European Union, Japan, India, and Costa Rica line up with Antigua at the WTO compensation window? At this juncture, I don’t have a clue.

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