ANTIGUA WTO CLAIM TO ESCALATE?

31 August 2007

USA could be faced with a $7 billion bill if WTO takes action


The Caribbean island nation of Antigua and Barbuda, which came out top in a David and Goliath World Trade Organisation tussle with the United States over online gambling (see previous InfoPowa reports) could be about to raise the stakes in its claim for compensation.

In a report in the Antigua Sun newspaper this week a figure of up to $7 billion is mentioned, as the nation's legal representative Mark Mendel warns the U.S. to expect billions more in sanctions as the country prepares to file its claim.

In June, Antigua and Barbuda initiated an effort to impose trade sanctions valued at US$3.4 billion annually on the United States, filing a claim for concessions primarily through the suspension of Antigua’s copyrights, trademarks, industrial designs and patents obligations to the U.S.

“The US$3.4 billion is just what we’re entitled to by virtue of them not having complied with the decision,” Mendel said, explaining that Antigua has not yet filed a claim to address the GATS withdrawal issue. “We haven’t even told them what that claim will be yet. The only thing I told them is it’ll be at least as big as our other claim."

The newspaper reports that in addition, the European Union has filed a $15 billion claim against the U.S. for its withdrawal from its GATS commitments. Earlier this year there were also indications from Japan, Brazil and China that claims may be laid.

Mendel told the Antigua Sun that he met with representatives from the office of the U.S. Trade Representative (USTR), at their request, at the beginning of August. He said that the meeting, however, made no progress.

“We’ve asked them to give us some proposals as to how they could solve things with us and they have yet to really give us any firm proposals, so it was a very inconclusive meeting," Mendel revealed. " I think the reason that they alled the meeting was just so that they could say that they did so.”

That meeting was with the branch of the USTR dealing with the GATS commitment. A separate group from the USTR is handling the dispute resolution aspect of the conflict between the two countries. Mendel says that he is still looking to that group to address how the case can be settled.

This Friday (end August), Antigua and Barbuda’s representatives go back to the WTO to present a justification of the $3.4 billion sanction it officially sought to claim last month.

Mendel has maintained from the start that the $3.4 billion in sanctions are justifiable. As he explained it, the sanctions were calculated by an internationally recognised firm of economists and were based on calculations that took into account the size and value of the global internet gaming market as well as Antigua and Barbuda’s market share.

He assured the Antigua Sun that the amount in sanctions was “completely defensible.”

“It’s a massive number but, after talking to the economists and going through everything, it is a very realistic number,” he said. He acknowledged that the figure is several times Antigua and Barbuda’s GDP, but pointed to the massive wealth created for Antigua and Barbuda and its online gambling companies by the industry, wealth which Mendel said has been almost destroyed by the actions of the U.S.

“I think we’re still in the driver’s seat and I feel optimistic about it. It’s tough and we’re the smallest guys in the world taking on the biggest but I think we’re doing well,” he said.

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