Negotiations Begin as Antigua, the US, and the European Union Try to Settle their Online Gaming Dispute

by Lou on September 25, 2007

The United States offered to settle their dispute regarding online gambling issue with the European Union.
The US offered to open areas that include storage, warehouse services and technical testing to compensate for gaming restrictions implemented with the passing of last year’s Unlawful Internet Gambling Enforcement Act (UIGEA).
This offer is inadequate. Opening offers always are. That’s the way negotiations go. The offer the US put on the table will not offset an estimated $4 billion dollar annual loss to EU companies, so it’s only the first salvo—a feeling out process—in a protracted encounter.
The EU asked for an extension until October 22 to review this offer, since the US filed it only days before the deadline. The extension was granted.

The Caribbean island nation of Antigua, which brought this complaint to the World Trade Organization, is also upset at initial US offerings to settle this case. The US claims that the $3.4 billion annual compensation to Antigua should be more in the area of $500,000.

Antigua’s lawyer, Mark Mendel, said Antigua’s strategy is twofold: First, Antigua will try to open the online gaming market to its operators. If that tack fails, they will seek to revoke trademark, intellectual property, and copyright agreements between the two countries. This is the nuclear deterrent of trade wars and if implemented, will have serious implications for US business like Microsoft, and variety of pharmaceutical companies who rely on patents to recoup their research and development costs and make a profit. The music and DVD business, the economy at large, and the American people would also be hurt by this kind of action.
But this is only the first salvo in a protracted negotiating process, like boxers pawing at each other as they probe for openings in the first round of what’s scheduled to be a longer fight. It’s a poker game of sorts, with each party riffling their chips as they try to get the other to fold their hand. But everyone realizes this and no one is going to back down now. What the US seems unwilling to admit, however, is that Antigua holds the bigger cards in this game and appears willing to make a big bet when it’s time to go for the throat.

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