Antigua Brings $3.4 Billion Claim for Sanctions Against US to WTO
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Today, Antigua’s attorney, Mark Mendel, will seek to recover $3.44 billion in trade sanctions against the U.S. for their failure to comply with a World Trade Organization ruling that found the United States not in compliance with trade agreements regarding cross border trade in the gambling sector of the GATS.
Currently the WTO is in a fragile position. It has already ruled that the U.S. must comply due to the fact that it allows domestic companies to offer cross border trading on horse racing, lotteries, and fantasy sports, and therefore must allow foreign trade to compete.
The U.S. is seeking to withdraw it’s agreement from the GATS on the idea that it never intended to include gambling as part of the agreement.
The European Union has asked for compensation in the amount of $15 billion for its projected losses due to its inability to compete in this type of trade.
China, Japan, and several other countries are also seeking compensation in undetermined amounts.
Arguments will be made by Antigua & Barbuda to enforce sanctions already deemed necessary by the WTO. The panel that will decide the extent of sanctions has the unenviable task of striking at the heart of major trade areas that have no relationship to gambling in order that Antigua & Barbuda get their due.
Areas that will be affected include, but are not limited to, the Music, Movie, and Software industries. Many billions of U.S. dollars will be lost to domestic companies that provide these services and have trademark and copyright protections that it is assumed will be relaxed for Antigua’s benefit.
“The United States is wrong on this issue and as is true to the administrations actions in other areas of governance, it is being stubborn in its views thinking that because of its might, they will ultimately become the victor,” said Internet gambling analyst Gordon Price.
The U.S. has been a strong proponent of the WTO and is its largest trading sector. In the past, the U.S. has demanded that other countries follow the rulings of settlement disputes and conform to their agreements as written, when it benefited them. Now it is taking the position that we don’t have to play by the same rules. Since we are who we are, the other members must conform to our wants and desires.
“This is a classical case of the schoolyard bully, and as most schoolyard bullies, one day they get what they give,” said Price.
For the WTO to be successful all members must abide by the rules, no country is stronger than another when it comes to trade. This is the reason for the WTO. It is designed so that smaller countries can compete in the world market equally with the larger countries.
Many analysts, including those at the CATO Institute, believe that if the U.S. is allowed to adjust the GATS agreement that was formerly agreed upon, it could be the beginning of the end of the WTO.
Antigua And USTR To Talk Today About Internet Gambling Issues
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In the first meeting between the two countries since the WTO has issued sanctions against the U.S. for violating its commitments in Trade in Services regarding the cross border trade in Internet gambling, Dr. Errol Cort, Antigua Finance Minister is set to discuss the issue with Susan Schwab, the USTR.
Cort is hoping that the high level meeting today will lead to a resolution of the dispute.
Dr. Cort boarded a plane to Washington Wednesday night for their meeting on Thursday and said that the sit-down with Ms Schwab would be the first ‘detailed discussions’ between the two countries over the gambling issue.
Antigua has accused the U.S. of crippling its gambling industry by banning Americans from partaking in this recreational activity with operators that are duly licensed to conduct such business on the Island Nation.
The World Trade Organization agreed, backing Antigua’s request to impose sanctions by targeting U.S. copyrights, and trademarks in retaliation for the gambling ban.
Dr. Cort said, “We believe this matter can be settled in an amicable way because we enjoy an excellent relationship with the United States.” Cort then added, “I am therefor hopeful we can come to some broad understanding in terms of settlement.”
Cort admitted that the decision of the WTO of $21 million annual fines the U.S. must pay is a setback to Antigua, who was hoping the penalty to be closer to the area of $3.44 billion annually.
A ban put into law last year (UIGEA), has been designed to prevent banks and other financial institutions from transferring funds to any foreign operator of gambling, while allowing the same transfers to continue for domestic operators of the same industry.