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Will US do the right thing

Friday April 08 2005

Despite what seems to be a clear-cut victory by Antigua & Barbuda over the US at the Appellate Body of the World Trade Organisation (WTO), early indications are that the woes of the locally-based Internet gaming companies are not yet over.

There are signs that the US is as yet far from ready to concede victory. And herein lies the crux of the matter. If the US decides to continue to play hardball, how does tiny, inconsequential Antigua & Barbuda force the world's sole superpower to co-operate with the WTO's ruling.

The US, acting individually and through the Organisation for Economic Co-operation & Development (OECD) and Financial Action Task Force (FATF), has in the past established crippling economic sanctions against Antigua & Barbuda, to compel corrective action to counter situations it deemed inimical to its interests.

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The US has in the past invoked the very WTO regulations to visit virtual destruction on the hitherto thriving Windward Islands banana industry, to protect the interests of its own Chiquita banana interests.

As reported elsewhere in this paper, Antigua & Barbuda has now scored a second unambiguous victory against the US in the fight to preserve our Internet gaming industry. The industry is worth an estimated $50 to $75 million, provides hundreds of jobs for our computer literate youth and represents a vital diversification effort for our tourism dependent economy.

The WTO Appellate Body has recommended that the Dispute Settlement Body request the US to bring the offending legislative measures, referred to in the relevant reports, into conformity with US obligations under the General Agreement on Trade in Services.

The measures had the effect of preventing US banks and credit card companies from facilitating transactions with the gaming companies in Antigua, thereby effectively starving them from their largest international market and threatening them with economic strangulation.

But even as Antigua & Barbuda was yesterday celebrating victory at the US trade officials were claiming that the WTO ruling supported their argument that the limitations could remain in place.

The WTO in fact ruled inter alia that cross border gaming services could be singled out for special treatment, at variance with treatment of other services for which GATS obligations are in effect.

This country's legal counsel Mark Mendel was justifiably jubilant, declaring "At the end of the day, Antigua continues to win. It is clear-cut. We won on all the major points."

Not so says an unidentified US trade official. "This is effectively a win for the United States, as it seems to say that if we tighten US Internet gambling restrictions, we'll be fine."

We have checked through the preliminary finding of the Appellate Body, and must confess to being at a loss as to the basis for such a bizarre conclusion.

The only logical interpretation of this latest Antigua & Barbuda victory is that the US is in violation of the rules of international trade, which it was instrumental in establishing, and must rectify its offending legislation and desist from penalising its corporations for conducting legitimate business with this country's Internet gaming community.

If the US fails to act as directed by the WTO, then the world order as it relates to cross border trade will have been gravely undermined and US integrity, particularly in its dealings with the developing world, hopelessly compromised.

We can only hope on due reflection, US trade officials will see the error of their initial pronouncements, bite the US gambling lobby bullet, and do the right thing.

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