WTO LATEST (Update)

7 September 2007

US considering international claims arising from its intention to withdraw online gambling treaty obligations


The World Trade Organisation argument over online gambling between the United States and Antigua and Barbuda....and by extension now the European Union, Australia, Brazil, Canada, Costa Rica, India, Macao and Japan...continues to develop, according to an article in the Antigua Sun this week.

The article reports that the US is unlikely to back down from its position on online gambling, despite facing billions of dollars in claims. Instead, it is maintaining that withdrawal from World Trade Organisation (WTO) trade obligations to grant market access to Internet gambling companies is the best way to resolve the ongoing dispute with Antigua and Barbuda.

The Antigua Sun interviewed an official in the office of the US Trade Representative, who curiously insisted on remaining anonymous, but said: “We are trying to clarify, by using Article 21 of the GATS agreement (General Agreement on Trade in Services) that our obligations should not extend to gambling."

For the USA, the downside of this strategy (see previous InfoPowa reports) is that the US must reach settlements with all WTO member states which file compensation claims as a consequence of the unprecedented withdrawal of obligations. Thus far, it is understood that the USTR is considering compensatory claims from the European Union, Australia, Brazil, Canada, Costa Rica, India, Macao and Japan. The official denied sight of a $15.5 billion claim allegedly submitted by the EU, and said that publicly discussing amounts under discussion would not help a negotiating process.

“We are actively working to negotiate, under Article 21, with all of the WTO members which made claims, and there are eight of them," he said. "We believe we can reach an expeditious solution using this procedure.

“We’ve been quite pleased, to date, that the members who have made claims seem to be approaching this issue with a sense of seriousness and realism and that they generally seem determined to reach a solution,” the trade official told the Caribbean newspaper.

The US trade official emphasised that the WTO requires the parties to keep the details of their talks confidential in order to promote negotiated settlements, but said that the claimant nations are not submitting total values to their claims at this point.

He added that all eight countries have argued that they have, in one way or another, an interest in gambling in the US. “Those interests can take various forms and, in fact, they vary quite drastically across these eight members, so their claims obviously reflect the differences in the nature of the way they believe they would be affected by our proposal to clarify that gambling is not included in our obligations,” he said.

The deadline for the conclusion of the Article 21 process is 22 September but extensions are understood to be possible. The US withdrawal of of its GATS commitment is being treated as a separate, though connected issue, to the trade claim being pursued by Antigua and Barbuda at the WTO.

Last Friday, Antigua and Barbuda presented a written submission to justify its US$3.4 billion per year claim against the US (see previous InfoPowa report). As Antigua and Barbuda’s attorney at the WTO Mark Mendel explained it, the methodology paper was a description of how Antigua and Barbuda came up with its damages. The US response to the submission, he said, is due on 19 September and then Antigua and Barbuda will get a chance to respond to the US position on 4 October.

“The decision is made by the same panel that we were before last time, which was very sympathetic to us and it will rule on this issue before the end of November,” Mendel said.

The USTR official declined to comment on Antigua and Barbuda’s submission, pointing out that there has been insufficient time to study it carefully, but the US continues to hold the position that the damages being claimed appear disproportionate. “Our view is that the figure seems excessive, but we’re going to have to study the economic methodology that’s been put forward and we’re going to have to have our own economists look at it and we will have a response to it,” he said.

Online Casino News courtesy of InfoPowa