Antigua delivers end-of-year ultimatum against U.S in WTO gambling dispute

In 2007, a World Trade Organization arbitrator approved the form and amount of Antigua's retaliation in the gambling dispute. Under that decision, Antigua is allowed to suspend up to $21 million annually in intellectual property concessions to the U.S. under the Agreement on Trade-Related Aspects of Intellectual Property Rights. But this mode of retaliation has never been tested before, a fact that has made Antigua hesitant to employ it.

At a Nov. 23 meeting of the WTO’s Dispute Settlement Body, Antigua took the floor to deliver the end-of-year ultimatum and slam the U.S. for its failure to come to the table and settle the dispute.

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The U.S. responded shortly: As the United States has noted at past meetings where Antigua and Barbuda placed this item on the agenda, the United States remains committed to resolving this matter

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In the dispute, the initial panel determined that the U.S. had not shown prohibiting the cross-border supply of gambling and betting services was "necessary" to "protect public morals," but the Appellate Body reversed that finding. Both the Appellate Body and panel determined the U.S. violated its market access commitments in General Agreement on Trade in Services by banning online gambling.

Since the arbitrator issued its decision in 2017, Antigua’s DSB representative said, “my small country with a Gross Domestic Product of just $1 billion has been deprived of trade revenues which now exceed $250 million.”

“For my country’s tiny economy, $250 million is a meaningful sum of money. Its loss has significantly retarded our economic growth and social development,” the representative continued. “By the same token, $250 million represents the paltry sum of point nought, nought, nought, nought, three per cent (.0003%) of only one year of the U.S.’ Gross Domestic Product.”

“Further,” Antigua continued, “over the last 12 years the United States has enjoyed a balance of trade surplus with my small country of over $1 billion."

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Antigua has mulled multiple options for this retaliation -- such as a website where users from around the world could download copyrighted materials such as movies, music or software without the permission of U.S. right holders -- but has not moved to do so

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Instead of complying with the 2005 WTO ruling, the U.S. withdrew its gambling concessions under GATS. But taking that step also required the U.S. under GATS Article XXI to offer compensation to other members affected by that decision, including Antigua.

While the U.S. offered such concessions to Japan and the European Union, which were also affected by the U.S. action, Antigua and the U.S. never agreed on any compensation.

Since the 2007 decision by the arbitrator, Antigua & Barbuda has “engaged in good faith consultations” with the U.S. to reach an acceptable settlement, Antigua said at the DSB meeting. But the U.S. never produced a settlement offer that “would even remotely compensate for the harm that has been done to our economy and continues to impact it negatively.”

“My government has almost exhausted its patient efforts to reach a settlement with the U.S.,” Antigua said at the DSB meeting.
Antigua’s representative at the DSB pointed out that the United States remains the most active and frequent user of the WTO’s dispute settlement body and in failing to come into compliance with the ruling in the gambling dispute it risks undermining “the WTO’s institutional integrity."

“Consequently, the protracted failure by the U.S. to settle this matter, despite the fact that it is not compliant with WTO rules, has the potential to collapse confidence in the efficacy and credibility of the rules-based trading system."
Antigua & Barbuda are “now engaged in a final effort with representatives of the U.S. Trade Representative’s Office to reach an agreed settlement.”

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But, Antigua said at the DSB, we cannot go beyond the end of this year

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“In light of the above, Antigua and Barbuda now informs the DSB that, if an appropriate and beneficial settlement is not reached with the U.S. by year-end, the government will be compelled to take action to enforce the suspension of copyright on the sale of US intellectual property, consistent with the award of the DSB.” -- Jack Caporal