Info Service on WTO and Trade Issues (Jan13/02)
22 January 2013
Third World Network
Antigua explains decision to seek sanctions in US gambling case
Published in SUNS #7504 dated 19 December 2012
Geneva, 18 Dec (Kanaga Raja) -- Following its recent request for authorisation
from the WTO Dispute Settlement Body (DSB) to retaliate against the
United States in the dispute involving the cross-border supply of
gambling and betting services, Antigua and Barbuda explained its position
on this issue at a meeting of the DSB on Monday.
Antigua and Barbuda had last week requested authorisation from the
DSB to suspend the application of concessions or other obligations
under the TRIPS Agreement with respect to the United States in an
amount not exceeding $21 million annually (see SUNS #7502 dated 17
In its statement under the agenda item of "Other Business",
Antigua and Barbuda pointed out that on 7 December 2012, prior to
the completion and dissemination of the notice for this (DSB) meeting,
its government submitted to the Secretariat, a request to be included
on the agenda for today (17 December), together with a request for
the authorisation of the DSB of the suspension of concessions and
other obligations of Antigua and Barbuda to the United States in accordance
with Article 22.7 of the Dispute Settlement Understanding (DSU) in
"our longstanding dispute" over the cross-border provision
of gambling and betting services.
Unfortunately, Antigua and Barbuda said it will not be requesting
this authorisation today because the Secretariat, apparently following
consultation with the United States, held its request untimely, "despite
being here in this building prior to the completion and dissemination
of the notice."
Antigua and Barbuda further said that it is a small developing country,
under particular economic stress in these difficult times. "We
haven't the resources to maintain a mission here in Geneva, and the
prosecution of this case and the pursuit of our rights under the WTO
agreements have been expensive, enormously time-consuming and difficult.
It is very unfortunate that we were, under all circumstances, unable
to present our suspensions request to this body today. We will be
back to do so in January," it added.
(The next regular meeting of the DSB is scheduled to take place on
28 January 2013.)
In its statement, Antigua and Barbuda said that notwithstanding this,
it is here today to explain its position to its colleagues in the
WTO and to set the record straight. It said that it did not come to
the decision to exercise its suspension rights lightly.
Noting that the first dispute settlement panel ruled in its favour
in 2004, it said that the "reasonable period of time" in
its case expired on 3 April 2006, and the report of the arbitrators
under Article 22.6 of the DSU was released almost exactly five years
ago, in December 2007.
"In the meantime, what was once a multi-billion-dollar industry
in our country, employing almost five percent of our population has
now shrunk to virtually nothing. A number of our citizens have been
criminally prosecuted, and a number are still under the spectre of
arrest, prosecution and incarceration by American authorities, for
ostensibly violating the very laws ruled to be in violation of US
obligations under the GATS in our case."
At the same time, Antigua and Barbuda added, domestic remote gaming
is growing apace in the United States. More and more states and other
governmental entities in America are authorising various types of
remote gaming and two of the most senior elected officials in the
American Congress have proposed legislation under consideration at
this very moment that would provide a country-wide regulatory programme
for remote gaming on poker in America.
"The only thing that all of these recent developments have in
common, besides gambling, is that each and every one exclude the provisions
of these much-in-demand services on a cross-border basis from other
countries, including Antigua and Barbuda."
Over the years since the last WTO proceeding in this matter, Antigua
and Barbuda said that its government has not been sitting idly by.
"Nor have we been imposing unrealistic and unbending demands
upon the United States."
In point of fact, Antigua and Barbuda has been working hard to achieve
a negotiated solution to this case. "Our efforts at compromise
have been exhaustive. We have tabled proposal after proposal to the
US government, and attended session after session, in pretty much
every case involving our delegation travelling to Washington DC in
hopes of finding some common ground."
But to date, Antigua and Barbuda noted, the United States has not
presented one compromise offer of their own, "and in particular
the USTR (US Trade Representative) has made, to our belief, no sincere
effort to develop and prosecute a comprehensive solution that would
end our dispute."
"As recently as last month, on yet another trip to the United
States, we were told to work the Congress ourselves, engage a lobbying
firm and hope for the best ... the USTR, we have been told time and
again, has no authority in these matters."
"In fairness, we don't know exactly how the United States resolves
the other disputes it has been involved in. But we tend to believe
that the USTR has a big role in making things happen in those disputes
... after all, that is within its clear statutory remit if you take
the time to explore the applicable domestic law. In our dispute anyway,
the USTR apparently has no role in seeing an end to the dispute,"
said Antigua and Barbuda.
"We have spent the past five years searching, at great expense
and considerable effort for our little country, for the person or
persons, the agency or agencies, whomever has the authority and will
to work with us to come to a reasonable, just and fair resolution
of our dispute. Sadly, we have never found that person, that agency,
Antigua and Barbuda said: "Told once again last month by the
USTR that such is our problem, we find ourselves with no alternative
but to apply the suspension of concessions and other obligations in
hopes that perhaps affected domestic interests in the United States
might have success where we have found none. Maybe an innocent American
intellectual property rights holder may be able to convince its government
that continued protectionism for the benefit of domestic gaming interests
is not sustainable."
"Maybe such an innocent third party will be able to find that
person who is willing to take ownership of this issue in the United
States government and work with our government in good faith and in
full consideration of the circumstances to bring this matter to a
fair and fitting conclusion," it added.
Finally, Antigua and Barbuda took note of the fact that the United
States has taken the exceptional step of trying to come into compliance
with the rulings and recommendations of the DSB in the matter by simply
removing the offending commitment altogether. And that in this regard,
the United States has come to agreement with other affected member
states on adjustments sufficient to satisfy those members.
However, Antigua and Barbuda stressed, "none of these things
are within the reasonable scope of our assets and our economy to provide
any benefit whatsoever."
"While this remains to be tested, we for one do not think that
the DSU was intended to work in the way suggested by the United States.
We do not think that a member can avoid its obligations to another
member under the WTO agreements by simply removing or modifying the
part of the agreement that a measure offends, making bilateral arrangements
with other members and leaving the supposedly prevailing member with
no remedy at all."
Antigua and Barbuda added: "If such is the case, then the DSU
will ring particularly hollow for smaller member nations, who will
rarely have the diversity and domestic assets to avail themselves
of offered adjustments."
Also under the same agenda item, the US said that Antigua's statement
"fundamentally misrepresents the current status of this matter,
and its positioning within the WTO system as a whole." Moreover,
it added, Antigua's sentiments only serve to postpone the final resolution
of this matter, to the detriment of its own interests.
This dispute involves an area of services regulation - gambling and
betting services - that the US said it never intended to be included
in its schedule under the General Agreement on Trade in Services (GATS).
Indeed, most Members, like the US, view gambling as a significant
issue of public morals and public order, involving the protection
of children and other vulnerable individuals. Accordingly, most Members
tightly regulate any gambling allowed within their borders. And most
Members did not include any market access commitments for gambling
in their GATS schedules.
This was the US understanding of its own GATS schedule, it maintained,
adding however, as a result of ambiguities in drafting, and despite
the intent of US negotiators, the Appellate Body ultimately found
that the US schedule must be construed as including a market access
commitment for cross-border gambling.
"Although the United States finds this outcome difficult to understand
and highly unfortunate, the United States has accepted the results
of the dispute settlement process."
The US said that it has responded to this finding responsibly, and
in a manner that involves substantial costs for the US. "As the
United States previously notified the DSB and the Council on Trade
in Services, the United States has invoked the established, multilateral
procedures for modification of its GATS schedule of concessions."
In May 2007, it initiated the modification procedure under Article
XXI of the GATS so as to reflect the original US intention to exclude
gambling from the scope of US commitments. Pursuant to the GATS procedures,
the US said it reached agreement with all interested Members, except
one, on a package of substantial compensatory adjustments to the US
"Only one single Member, out of the entire WTO membership, will
not accept compensatory service concessions. That Member is Antigua,"
the US said.
The US was of the view that instead of respecting the WTO process
under Article XXI, Antigua insists that the US must maintain its unintentional
concession on gambling, and that the US must change its domestic policies
concerning public morals and public order so as to allow internet
"Despite this unreasonable and unrealistic demand, the United
States has gone to great efforts to meet Antigua's concerns. Over
a course of years, the United States has devoted substantial resources
to settlement discussions. The United States has met repeatedly with
Antigua at all levels of government, from the ministerial to the technical
level," it maintained.
Based on specific requests made by Antigua, the US said it has offered
real and substantial benefits that would make important contributions
to the further development of the Antiguan economy.
At times, the US added, "Antigua has been on the verge of accepting
these benefits and putting this dispute behind us. At other times,
however, as appears to be the case today, Antigua reverts to its unrealistic
demands that the United States forego the modification of the US GATS
According to trade officials, the DSB took note of the statements.