ROW OVER ONLINE GAMBLING DEAL WITH U.S. GROWS

28 December 2007

Did the US really make meaningful concessions to EU, Canadian and Japanese negotiators?


Last week's disappointing deal between the United States and three fellow World Trade Organisation nations seeking compensation in the wake of an online gambling dispute could be short-lived according to reports from the Brussels HQ of the EU reaching the Financial Times this week.

The FT reveals that high hopes that greeted the deal have been almost immediately dashed by a look at the small print, and major online gambling members of the Remote Gaming Association have already indicated their dismay and intention to pursue further satisfaction (see previous InfoPowa report)

The dispute arose when the US lost a WTO dispute with Antigua and Barbuda over discriminatory legislation on Internet gambling, and instead of moving to comply with WTO requirements, chose to take the unprecedented step of withdrawing all commitments regarding gambling from its Treaty obligations.

That opened the Americans to compensation claims from fellow WTO member nations, and a negotiated settlement that noone seemed able to quantify took place in favour of the 27 nation EU bloc, Canada and Japan. This allegedly made warehousing, courier and testing service sector concessions as compensation, with little benefit for damaged gambling firms.

But within 24 hours of the deal being unveiled last week, the US issued a “clarification” that left European companies doubtful of the deal’s benefits, and trade experts questioning whether it would stick.

The Office of the US Trade Representative (USTR) said the US Postal Service had allowed foreign competitors to handle overseas mail for 20 years. All it was doing was making the decision legally binding so it could not be reversed. Sensitive sectors such as domestic delivery and storage at ports and airports would remain closed.

“There will be no effect on the terms of competition and no supplier of such delivery services will receive any advantage,” said USTR spokeswoman Susan Schwab, the day after the deal. It would not involve “any change in US law and practice”.

An official added that this had “real value” and the EU agreed. “It gives the sector legal certainty. There is real value in binding the commitments,” said a spokesman for Peter Mandelson, the EU trade commissioner.

However, company officials and their lobbyists on both sides of the Atlantic are not so sure. “To us, this market was already liberalised and we have been operating in it for many years. It is too early to evaluate what long-term benefits this decision would have,” said a spokesman for the German courier.

TNT, the Dutch operator that has a 1 percent hold in the US market, said: “De facto nothing really changes although current affairs are legally better backed through the WTO.”

Market leader UPS declined to comment. “We’re looking into the details,” FedEx spokesman Howard Clabo said.

A USTR official said it was “a rebalancing of legal commitments”.

Nao Matsukata, a former USTR official who is now policy adviser at Alston & Bird, the law firm, said his old office appeared to be attempting to stop short of legal changes that would require congressional sanction. “If they have agreed legally binding commitments that must have the approval of Congress as they do not have fast-track authority. I would expect to see congressional leaders taking a look at this,” he said.

The World Trade Organisation appeared to have washed its hands of the issue, with officials claiming that it was up to the US and trading partners to agree adequate compensation between them. Washington would then notify the WTO of changes to US services commitments.

Several nations have yet to accept US offers.

Online Casino News courtesy of InfoPowa