DISAPPOINTING W.T.O. NEWS

21 December 2007

Yet another delay in decision on trade dispute


The industry's hopes for positive news from the World Trade Organisation were dashed Friday when Reuters news service reported yet another delay on the trade body's long-awaited decision regarding the amount of retaliation that Antigua and Barbuda can impose on the United States in their Internet gambling trade dispute.

"We understand the report has been delayed," said Gretchen Hamel, a spokeswoman for the U.S. Trade Representative's office, without giving further details.

The delay may have also impacted the claims of other countries, including the EU, for which there was a similar deadline of December 14. In a parallel issue, the negotiations with the United States to come to a compensation agreement also seemed to be in limbo. If those talks don't lead to a consensus, the European Union could, like Antigua, also request that a WTO arbitration panel decide the matter.

Antigua has been in a long-running fight to offer its Internet gambling services in the United States. The case is being closely watched by European online gambling companies, which were pushed out of the U.S. market by new US legislation last year, suffering extensive commercial damage.

In an April 2005 victory for Antigua, the WTO rules that a U.S. law allowing only domestic companies to provide online horse-race gambling, fantasy sports and state lottery services discriminated against foreign firms. The US horse-racing industry, in particular, has taken extensive advantage of its legislative carve-out, introducing Internet betting on the pastime in a big way.

Antigua, which built an online gambling industry to replace declining tourism revenues, has asked permission to impose $3.44 billion a year worth of "cross-retaliation" on the United States. It wants the WTO's authorisation to suspend copyright protections on American movies, music and software so its domestic manufacturers can export those products to the United States and potentially other markets.

The United States representative has countered with the observation that Antigua is entitled to no more than $500 000 in damages in the dispute, something which Antigua's finance minister, Dr. Errol Cort hotly contests, claiming full justification has been provided.

The WTO ruling may not necessarily be too long delayed - Mark Mendel, a private attorney representing Antigua, said Friday he was told the WTO was putting the final touches to the report, which also needs to be translated.

"They'll let us know on Monday precisely what day to expect it," Mendel said on his way to a meeting with House of Representatives Ways and Means Committee Chairman Charles Rangel, a New York Democrat, and other lawmakers to discuss the case.

Last year the US Congress tightened restrictions on Internet gambling by making it illegal for banks and credit card companies to make payments to online gambling sites. In addition, the Bush administration announced in May it was retroactively excluding gambling services from market-opening commitments it made as part of the 1994 world trade agreement.

That opened the door for the European Union, Japan, India and several other other trading partners to seek "compensation" from the United States in the form of increased access to another U.S. service market, such as insurance or air travel.

The deadline for finishing those WTO talks also was on Friday, but it appeared that would be extended as well.

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