Will the US Try to Walk Away From Its Treaty Obligations?

by Lou on May 26, 2007

The US decided against an appeal in its World Trade Organization (WTO) dispute with Antigua. The United States now plans to withdraw from its obligations regarding gambling and betting services. Under WTO treaty obligations, this leaves the US open to damage claims from any WTO member adversely affected by their withdrawal. Those claim must be resolved through a negotiated settlement or arbitrated before the US may withdraw their commitment.

Antigua’s reaction was swift and sharp, and the small island nation of 70,000 has attracted support from Brazil, India, and the European Union.

John Ashe, Antigua’s ambassador to the WTO, said, “There is something clearly wrong with the concept that after a long, difficult struggle covering years of dispute resolution at the WTO an offending member could ultimately avoid the consequences of its loss by withdrawing the commitment that gave rise to the claim in the first place. As far as we are concerned, our dispute has been resolved and the US remains obligated to comply.”

According to Antigua’s lead attorney on this issue, Mark Mendel, “While we will not know until the filing deadline in mid-June, we have heard rumblings that substantial trading partners such as the EURO are seriously considering filing claims for compensatory adjustments. The potential adverse impact upon completely unrelated US business interests could be massive.”

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