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The dispute between the United States and the Caribbean island nation of Antigua and Barbuda over U.S. restrictions on Internet gambling has demonstrated one of the key benefits of the World Trade Organization: large and small nations alike have access to a legal system that protects their rights. But the United States has indicated that it does not intend to lift its restrictions on gambling over the Internet, in defiance of a series of clear rulings that those restrictions violate U.S. commitments to the WTO. At a time when global trade negotiations have stalled and the future of the WTO is in question, a failure to achieve resolution could deal a serious blow to the WTO’s credibility. The lead attorney for the Antiguan government and one of the world’s experts on WTO law will join a Cato trade expert to discuss this dispute and its importance for the international trading system.
PokerPulse.com summary of the forum:
Hats off to conservative Cato for playing host to the forum and for posting excellent A/V links! Anyone who is still unclear on either the facts of the case or its outcome will find an excellent summary here.
We'd buy a cold one or two for Antigua supporter, Aussie Sallie James, a trade policy analyst whose dad in Adelaide ran the only casino in town and whom she said, not surprisingly perhaps, would have shared U.S. protectionist sentiments. However, we were disappointed the U.S. Trade Representative (USTR) declined to send a spokesman. Not surprising, perhaps, given its embarrassingly untenable position, in our view. Nevertheless, it would have been instructive to hear some frontline debate.
Unfortunately, Prof. Jackson, who took the U.S. side, sounds almost as mystifying as his excessively academic articles on international trade. Unbelievably, he was still arguing the U.S. position of two years ago, the laughable assertion that the U.S. won the case on appeal and that the only contentious issue remaining is horseracing, which is easily repaired. Ho-hum. So the long day wore on. See Mr. Mendel's written reply to that assertion several years ago, below.
Prof. Jackson also pressed the now ancient wheeze that America never meant to include gambling in its schedule of commitments under GATS, that it was all just a mistake, hence the moniker, "the oops case." For Mr. Mendel to counter that the inclusion of gambling was very much not a mistake and that, indeed, many countries deliberately excluded gambling, was as the great novelist P.G. Wodehouse might have put it, the work of an instant.
In our view, the focus of the panel as well as the audience almost exclusively on the financial consequences to the U.S. for breaching trade obligations to Antigua and, more recently, the GATS (click here), is an indication that the U.S. is feeling the pinch, making this dispute the OUCH! - not the oops - case.
More than a few people in Washington initially dismissed as absurd the idea that the trade organization could claim jurisdiction over something as basic as a country’s own policies toward gambling. Various states and the federal government, after all, have been deeply engaged for decades in where and when to allow the operation of casinos, Indian gambling halls, racetracks, lotteries and the like. But a W.T.O. panel ruled against the United States in 2004, and its appellate body upheld that decision one year later. In March, the organization upheld that ruling for a second time and declared Washington out of compliance with its rules.
That has placed the United States in a quandary, said John H. Jackson, a professor at Georgetown University Law Center who specializes in international trade law. Complying with the W.T.O. ruling, Professor Jackson said, would require Congress and the Bush administration either to reverse course and permit Americans to place bets online legally with offshore casinos or, equally unlikely, impose an across-the-board ban on all forms of Internet gambling — including the online purchase of lottery tickets, participation in Web-based pro sports fantasy leagues and off-track wagering on horse racing. But not complying with the decision presents big problems of its own for Washington. That’s because Mr. Mendel, who is claiming $3.4 billion in damages on behalf of Antigua, has asked the trade organization to grant a rare form of compensation if the American government refuses to accept the ruling: permission for Antiguans to violate intellectual property laws by allowing them to distribute copies of American music, movie and software products, among others.
For the W.T.O. itself, the decision is equally fraught with peril. It cannot back down because that would undermine its credibility with the rest of the world. But if it actually carries out the penalties, it risks a political backlash in the United States, the most powerful force for free-flowing global trade and the W.T.O.’s biggest backer. “Think of this from the W.T.O.’s point of view,” said Charles R. Nesson, a professor at Harvard Law School. “They’re this fledgling organization dominated by a huge monster in the United States. People there must be scared out of their wits at the prospects of enforcing a ruling that would instantly galvanize public opinion in the United States against the W.T.O.” ...
... "The level sought by Antigua and Barbuda is several times higher than Antigua and Barbuda's annual gross domestic product of all goods and services," U.S. trade lawyer Juan Millan told the WTO's dispute settlement body.
Millan said Washington accepted that U.S. gambling laws were not in compliance with its WTO obligations. But he said Antigua's request for retaliation was unnecessary because the U.S. was negotiating compensation with all interested WTO members — despite having originally argued that it was exempt from sanctions or having to pay compensation.
Antigua, the smallest country to successfully litigate a case in the World Trade Organization's 12-year-history, had its documents circulated among the delegates at the meeting, but was not present for the discussion. It has said it will target U.S. trademarks and copyrights if Washington refuses to change its legislation. The March ruling upheld the U.S. right to prevent offshore betting as a means of protecting public order and public morals. But it said it was illegal to target online gambling, without equally applying the rules to American operators offering remote betting on horse and dog racing. Antigua had been promoting electronic commerce as a way to end the country's reliance on tourism, which was hurt by a series of hurricanes in the late 1990s. There are 32 licensed online casinos in the former British colony, employing 1,000 people and generating a yearly revenue of around US$130 million (€94 million). Seven years ago, its casinos had an annual income closer to US$1 billion. Last year, Washington stopped U.S. banks and credit card companies from processing payments to online gambling businesses outside the country. The decision closed off the most lucrative region in a market worth US$15.5 billion (€11.2 billion) last year. About half of the world's online gamblers are based in the United States.
I think the U.S. is going to have to reassess what they're doing': Antigua Eight nations so far reach out for a taste:
Antigua's estimate of $3.443 billion USD in potential losses was conservative, (Antigua's lead counsel Mark) Mendel said, suggesting that the EU and other countries could claim substantially higher sums. This, he suggested, could ultimately push the cost of compensation so high that the U.S. would have to face changes to unrelated services sectors - affecting access to crucial markets - merely to protect its domestic gambling sector.
I am going, I am going
Any which way the wind may be blowing
I am going, I am going
Where streams of whiskey are flowing
The Caribbean island nation of Antigua and Barbuda is no longer alone in its efforts to make it harder for the US to avoid complying with multiple WTO dispute rulings against Washington's restrictions on overseas internet gambling.
Eight Members, including the EU, Costa Rica, and Japan served notice before a 22 June deadline that they will seek compensation for lost revenues potentially worth billions of dollars if the US uses rarely-invoked General Agreement on Trade in Services (GATS) procedures to explicitly exclude internet gambling from its multilateral liberalisation commitments
Meanwhile, Antigua announced that it would seek to impose USD $3.443 billion in annual retaliatory sanctions against a range of US patents, copyrights, trademarks, and other intellectual property, as well as services companies. ...In the document detailing the sanctions it intends to impose (WT/DS285/22), Antigua observed that retaliating against US goods or services would have a "disproportionate adverse impact" on its own population: 48.9 percent of the country's goods and services imports come from the US, but total bilateral trade accounts for less than 0.02 percent of the US' total exports. It thus argued that retaliating in services alone - for instance, by barring some US services companies from operating in the country - would be vastly inadequate to recoup the over USD 3.4 billion in losses it claims to have suffered. Antigua claims that prior to the US's move to block overseas gambling, the sector accounted for over 10 percent of GDP, and was the fastest growing segment of the island nation's roughly USD 900 million economy.
WTO rules provide for countries to ordinarily retaliate under the specific WTO agreement that has been violated - that is, sanctions against goods when merchandise trade is at issue, services for services, and so forth. However, if this is unlikely to be effective, they allow governments to 'cross-retaliate' against other sectors, such as intellectual property. This has been extremely rare in practice: in 2000, Ecuador received the right to impose USD 200 million in sanctions against EU intellectual property in a dispute over trade in bananas, but chose not to do so.
Antigua argued that cross-retaliation was necessary, since its gaming industry and overall economy would continue to suffer serious losses unless the US withdrew its gambling restrictions. It thus asked for authorisation to suspend its WTO obligations to protect US copyrights, trademarks, industrial designs, patents, and data protection, as well as to suspend liberalisation commitments in the communication services sector. ... However, even if Antigua were to be allowed to legally break US patents, trademarks, and copyrights, the legitimate copies thus produced would only be eligible for sale in the country's tiny internal market. It is not clear whether Antigua could, for instance, export copied drugs to say, the EU, without breaching international or domestic rules.
The potential cost to the US of maintaining its current course jumped dramatically last month when seven other Members notified the WTO that they would seek compensation if Washington moved to alter its services commitments. The identity of the countries is confidential, as is the compensation they might seek. However, gambling industry news sources suggest that apart from Antigua, they are the EU, Costa Rica, India, Canada, Macau, Australia, and Japan. Gambling companies based in Costa Rica and the UK have been hit hard by the US ban, losing business as well as share value.
Mark Mendel, lead counsel to the Antiguan government on the case, welcomed the requests for compensation."I think the US is going to have to reassess what they're doing," he said.
Antigua's estimate of USD 3.443 billion in potential losses was conservative, Mendel said, suggesting that the EU and other countries could claim substantially higher sums. This, he suggested, could ultimately push the cost of compensation so high that the US would have to face changes to unrelated services sectors - affecting access to crucial markets - merely to protect its domestic gambling sector.
US officials have expressed scepticism about the merits of the compensation claims. There is little precedent to indicate how the compensation claims might unfold. GATS Article XXI has been used only once in the WTO's history, when the EU made new market-opening commitments as compensation for withdrawing certain concessions that had been offered by some of the ten countries that acceded to the bloc in 2004. In theory, compensation should be offered under the GATS; the rules do not mention whether this could be done under other WTO agreements. Procedurally, if governments cannot agree on compensation, they can seek arbitration.
Mendel insisted that Antigua still wanted to negotiate a solution with Washington, but had "hit a stone wall" with the U.S. Trade Representative's office. (emphasis added)
Antigua and Barbuda says it has gained the full support of fellow Caribbean Community (CARICOM) member states in its ongoing Internet gambling dispute with the United States. Prime Minister Baldwin Spencer said regional leaders have thrown their full support behind his country and were calling on the US to respect the ]World Trade Organization (WTO) recent ruling on the issue.
"This matter has been fully ventilated at the conference and the position of CARICOM is that Antigua and Barbuda should be fully supported by CARICOM in this matter because it should have serious implications for the region going forward as we seek to develop the financial services sector in the region," he told a news conference.
... Following the case the Spencer administration filed formal trade sanctions against the US, demanding US $3.4 billion in compensation for failing to open its domestic market to remote gambling services, a move it said resulted in the loss of over 4,000 jobs and a lost opportunity to earn millions of dollars in foreign exchange. (emphasis added)
Plankton: It's evil. It's diabolical. It's lemon-scented. This Plan Z can't possibly fail! So enjoy today, Mr. Krabs, because by tomorrow, I'll have the formula. Then everyone will eat at the Chum Bucket, and I will rule the world! All hail, Plankton! All hail Plank---
Spongebob (humming along cheerfully, absently stepping on Plankton): I'm ready. Promotion. ... Ew, I think I stepped on something.
Plankton(after Bob painfully scrapes him off his shoe - twice!): Not on something, on someone, you twit.
Bob: Oh, sorry, Plankton. Are you on your way to the grand-opening ceremony?
We had one million bags of the best Sligo rags
We had two million barrels of stone
We had three million sides of old blind horses hides
We had four million barrels of bones
We had five million hogs
And six million dogs
Seven million barrels of porter
We had eight million bails of old nanny-goats' tails
In the hold of the Irish Rover
... The general rule in the world of international trade agreements is that a country must treat foreign goods and services in the same manner as it treats domestic ones. The United States, the trade body found, permits online wagering through sites like Youbet.com, a publicly-traded company that allows visitors to place bets at horse racing tracks around the globe. And of course some form of casino gambling is legal in more than 30 states and even local governments advertise gambling services when states run ads encouraging people to buy a lottery ticket.
"This isn't a case of forcing gambling on a population that has decided they don't like it," Mendel said. "This is the world's biggest consumer and exporter of gambling services trying to prohibit a small country from developing its economy by offering these same services. And we find that deeply hypocritical."
... He (Mendel) explained that it was just the beginning of the nation's claim, and that it has yet to file a claim to address the issue of the United States' decision to withdraw from the WTO's General Agreement on Trade in Services (GATS) in order to maintain its online gambling ban. Mendel indicated that claim would be equal to or greater than their initial compensation claim, bringing the total amount sought to approximately $7 billion.
... "It's a massive number but, after talking to the economists and going through everything, it is a very realistic number," Mendel said in the Antigua Sun. While the figure is several times Antigua and Barbuda's GDP, the online gambling industry has created massive wealth for Antigua and Barbuda and its online gambling companies, wealth Mendel said has been almost destroyed by the actions of the United States.
Antigua's initial claim for $3.4 billion NOT just a one-time 're-balancing'
Despite IP lobby, even Vegas brick-and-mortars keen to join the online industry:
The Caribbean Hold 'Em An unlikely trade dispute between the U.S. and Antigua over online gaming has turned into a David-and-Goliath battle, proving small nations can wield large digital sticks.
By Emily Flynn Vencat
... The ruling, which the WTO is expected to begin enforcing next month, could oblige America to overhaul its prohibitive stance on online casinos, not just in relation to Antigua but to a host of others—including the EU, Japan and Australia. That would double the size of the $15 billion-a-year online gaming industry almost overnight, says the Safe and Secure Internet Gambling Initiative, a pro-gaming consultancy. And since the WTO might allow nations that have been hurt by U.S. gaming laws to flout American intellectual-property law in response, the dispute is already spreading to Hollywood, Silicon Valley and beyond.
... It's no surprise that lobbyists from Silicon Valley and Hollywood are now storming Capitol Hill, pushing for a deal. Last month the Motion Picture Association of America urged the U.S. trade representative to negotiate with Antigua in order to prevent bootlegging. But the Bush administration is staunchly refusing to bend on virtual gaming. The (surprisingly weak) legal line is that America never intended to include gambling under its WTO obligations, which were signed in the mid-1990s. "It is ludicrous [to assert that] our negotiators would have intentionally turned 40 years of criminal law against this type of gambling on its head," says U.S. Deputy Trade Representative John Veroneau.
... If America doesn't fold on gaming, next year Antiguans could well be selling billions of dollars of legally pirated copies of everything from Microsoft software to Disney movies without paying the copyright owners a penny. "Intellectual property is the perfect sanction item," says Nao Matsukata, a former senior trade official for the United States. "It gives small countries like Antigua absolute leverage." The WTO has allowed the use of IP as a stick once before, in the famous EU-Ecuador banana squabble (the threat of it was enough to make the EU cut a deal). But experts expect it will become common policy in the future, and see online gaming as a test case for its effectiveness.
... Ultimately, this leaves the United States with a very weak hand to play. It could continue to deny that the WTO has legislation over its internal gambling laws. But that would undermine the overall credibility of the organization by showing it to be unable to enforce its rulings—and America needs a strong WTO to mediate prickly conflicts with, say, China, over things like Internet censorship and the mass manufacturing of fake designer goods.
Eight other WTO members, including the European Union, Australia and Japan, are now lining up to claim compensation from the United States over online gaming. "The EU is almost licking its chops," says Antigua's lawyer Mendel. "In total, this could come to $100 billion in sanctions. " Giant American bricks-and-mortar casinos like Harrah's and MGM are making plans to move into the online sector as soon as the U.S. trade stance becomes clear.
Antigua and Barbuda, one of the first nations to permit online betting, expects Britain to approve its web gambling advertisements when restrictions on about 1,000 foreign-based sites come into force next month. The UK Department for Culture, Media and Sport last week published a so-called "white list" of areas from which gaming websites will be allowed to advertise on television, radio and in print starting September 1. Antigua is still being considered for the list, which includes the European Union, Iceland, Liechtenstein, Norway, Gibraltar, the Isle of Man and Alderney, the department said. The Netherlands Antilles has been excluded.
Antigua should be allowed to advertise because its "regulatory and licensing objectives are parallel to the UK's intended remote gaming regulatory regime," Errol Cort, finance minister of the Caribbean nation of 75,000, said in a statement.
The UK restrictions aim to ensure that new legislation -- which permits online gaming products to be advertised on TV for the first time and allow for the development of a Las Vegas-style super casino -- doesn't lead to an increase in problem gambling. Britain is seeking to prevent underage gaming, promote fairness and combat illicit activities and financial crimes.
The impact on Antiguan betting companies will be limited even if the UK rejects the country's application, said Mark Mendel, Antigua's legal counsel. "It would affect only a few, and not in any dramatic way," he said in a telephone interview on Monday. Still, "I'm sure we'll end up on the white list sooner or later, probably sooner. We're still discussing a couple of issues, but it should be resolved" by the end of the month.
Antigua was one of the first nations to legalise, license and regulate online gaming. The nation developed Internet gambling to boost a tourism-dependent economy after several hurricanes in the 1990s. ... "Antigua has been regulating this industry for over 10 years and the UK is only starting," Mendel said. Antigua has less than 10 percent of the market for online betting, down from about 50 percent in 2002, Mendel said. (emphasis added)
Foreign gambling services barred in the U.S. but U.S. allowed in the EU:
European online gaming companies which have been shut out of U.S. markets urged the European Union on Wednesday to demand as much as $100 billion in compensation in the hope that Washington might yet be pressed into reversing its ban. ... The United States is offering concessions in other areas of trade to offset the online gambling restrictions.
Lawyers for European online gaming firms - which are among the biggest in the world -- said the EU should press for as much as $100 billion in compensation, given the plunge in the market value of listed firms when Washington shut off the world's biggest market last year and the value of business lost since then. The move wiped $7 billion off the value of the industry. ... "One major question is how strong the EU will be in pushing the U.S. for all the concessions available to it," said Craig Pouncey, a trade lawyer with law firm Herbert Smith (representing Antigua in the ]WTO cross-border betting dispute with the U.S.).
The raw afternoon is rawest, and the dense fog is densest , and the muddy streets are muddiest, near that leaden-headed old obstruction, appropriate ornament for the threshold of a leaden-headed old corporation: Temple Bar. And hard by Temple Bar, in London Inn Hall, at the very heart of the fog sits the Lord High Chancellor in his High Court of Chancery. Never can there come fog too thick, never can there come mud and mire too deep, to assort with the groping and floundering condition which this High Court of Chancery, most pestilent of hoary sinners, holds this day, in the sight of heaven and earth.
... all yawning, for no crumb of amusement ever falls from Jarndyce and Jarndyce (the cause at hand), which was squeezed dry years upon years ago.
... The little plaintiff or defandant, who was promised a new rocking-horse when Jarndyce and Jarndyce should be settled, has grown up, possessed himself of a real horse, and trotted away into the other world. (From Chapter I, In Chancery, pgs. 2-3)
The arbitrators determine whether the level of the proposed suspension of concessions is equivalent to the level of nullification or impairment. This means that they calculate the approximate value of the trade lost due to the measure found to be (WTO)-inconsistent or otherwise to nullify or impair benefits. If there is a claim that the principles and procedures for cross-retaliation (Article 22.3 of the DSU) have not been followed, the arbitrator also examines that claim (Article 22.7 of the DSU).
The parties must accept the arbitrator’s decision as final and not seek a second arbitration. The DSB is informed promptly of the outcome of the arbitration. Upon request, the DSB grants authorization to suspend obligations provided that the request is consistent with the decision of the arbitrator, except if there is a consensus to reject the request (Article 22.7 of the DSU)...
Surveillance until final implementation
The DSB’s surveillance continues (even where compensation has been agreed or obligations have been suspended) as long as the recommendation to bring a measure into conformity with the covered agreements has not yet been implemented (Article 22.8 of the DSU).
Part IV of the agreement establishes the basis for progressive liberalization in the services area through successive rounds of negotiations and the development of national schedules. It also permits, after a period of three years, parties to withdraw or modify commitments made in their schedules. Where commitments are modified or withdrawn, negotiations should be undertaken with interested parties to agree on compensatory adjustments. Where agreement cannot be reached, compensation would be decided by arbitration.
... If agreement is not reached between the modifying Member and any affected Member before the end of the period provided for negotiations, such affected Member may refer the matter to arbitration. Any affected Member that wishes to enforce a right that it may have to compensation must participate in the arbitration.
(b) If no affected Member has requested arbitration, the modifying Member shall be free to implement the proposed modification or withdrawal.
4. (a) The modifying Member may not modify or withdraw its commitment until it has made compensatory adjustments in conformity with the findings of the arbitration.
(b) If the modifying Member implements its proposed modification or withdrawal and does not comply with the findings of the arbitration, any affected Member that participated in the arbitration may modify or withdraw substantially equivalent benefits in conformity with those findings. Notwithstanding Article II, such a modification or withdrawal may be implemented solely with respect to the modifying Member.
Harvard Law School’s new student-led Poker Strategic Thinking Society (GPSTS) and a leading Harvard professor have scheduled a series of lectures and conferences to examine the role of poker in the law and education. The lectures, open to the media and to take place at 5 p.m. in Room 102 of Hauser Hall on the law school campus at 1563 Massachusetts Avenue, will begin on Monday (October 15) and continue for the remainder of the Fall Semester. They are being sponsored by Harvard’s Global Poker Strategic Thinking Society, which is organizing student poker societies on university campuses nationwide, and Harvard Law Professor Charles Nesson, who is focusing on the study of poker as an academic exercise.
(to take place at 5 p.m. on Oct. 16 in the same location) focuses on the current international trade dispute over online gaming that pits the tiny island nation of Antigua against the U.S. at the ]World Trade Organization. The WTO recently ruled that the U.S. has violated its international treaty commitments by barring overseas online gaming operators from the U.S. market. The implications of this novel case will be discussed by Simon Lester, an expert in international trade law; Steven Donziger, a lawyer involved in aspects of the WTO matter who will discuss asymmetrical litigation strategies (when a seemingly weak litigant like Antigua is able to defeat a more powerful adversary, such as the U.S. government); and Jonathon Cohen, a lawyer and communications strategist.
... In conjunction with Professor Nesson's CyberOne class, the HLS Poker Strategic Thinking Society is bringing several speakers to campus to look at the ongoing dispute between the WTO and Antigua over the protectionist stance of the U.S. in online gambling and internet poker. Guests include:
-Joe Kelly, professor of law at SUNY College Buffalo and expert on Internet Gambling Law, will speak from the position of the American gambling industry,
-Jonathon Cohen, head of the Weiser Group P.R. firm, will discuss the media's role in international disputes,
-Stephen Donziger, legal expert in asymmetrical litigation will discuss the legal process for a small entity like Antigua litigating against an entity like the U.S., and will reflect the view of the online gaming industry
-Simon Lester, a Legal Affairs Officer at the WTO will discuss the implications of the case for the WTO.
The European Union and other U.S. trading partners have agreed to give the United States more time to negotiate a package of trade concessions to compensate them for U.S. restrictions on Internet gambling, a U.S. trade official said on Monday. "In order to provide all parties with sufficient time to reach a successful resolution, the United States and the claimants have jointly agreed that these negotiations should be extended until Dec. 14," said Gretchen Hamel, a spokeswoman for the U.S. Trade Representative's office.
The negotiations between the United States and seven of its trading partners had faced a Monday deadline. U.S. officials have not said how much compensation the trading partners are seeking, but last month said reports it could exceed $100 billion were "exaggerated."
"Each negotiation is proceeding at its own pace, and some are quite advanced. However, we have agreed to extend the negotiation period for all claimants," Hamel said. ... U.S. officials initially said they did not believe compensation was warranted, but have been in talks with seven WTO members - India, the European Union, Japan, Costa Rica, Macao, Canada and Australia - on a compensation package[/b][/i].
... * Hamel conceded that Antigua remains more focused on litigating its case, then negotiating a compensation package with the United States. But "we believe that negotiations hold the most promise for resolving this issue," she said. (emphasis added)
*Note: To fully appreciate how ludicrous this statement is, view this brief excerpt from the July, 2005 arbitrator's report by an exasperated Claus-Dieter Ehlermann, who was finally called in after repeated refusals by the U.S. to negotiate. The report notes the continued refusal by the U.S. to discuss the matter beyond hints of its plan NOT to comply.
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To tell Butcher Knife Totin' Annie, to tell Fast Talkin' Fanny
We gonna pitch a ball, down to that union hall
We gonna romp and tromp till midnight
We gonna fuss and fight till daylight
We gonna pitch a wang dang doodle all night long
All night long, all night long, all night long
Tell Kudu-Crawlin' Red, to tell Abyssinian Ned
To tell ol' Pistol Pete, everybody gonna meet
Tonight we need no rest, we really gonna throw a mess
We gonna to break out all of the windows,
we gonna kick down all the doors
We gonna pitch a wang dang doodle all night long
All night long, all night long, all night long
Tell Fats and Washboard Sam, that everybody goin' to jam
Tell Shaky and Boxcar Joe, we got sawdust on the floor
Tell Peg and Caroline Dye, we gonna have a time
When the fish scent fills the air, there'll be snuff juice everywhere
We gonna pitch a wang dang doodle all night long
All night long!
... The United States has objected to Antigua and Barbuda’s multi-billion dollar claim on the grounds that US$3.4 billion “is nearly four times larger than Antigua’s entire economy, and thus wildly out of line with any realistic figure.” A legal team from the office of the United States Trade Representative has instead proposed that $500,000 would be a more reasonable compensation figure. Antigua and Barbuda has, however, replied that figures from the Internet gambling industry are not included in annual economic figures reported to the Eastern Caribbean Central Bank. He explained yesterday that most gaming companies do not report their annual profits, since there is no legal requirement that they do so. He suggested that this reluctance is linked to fears that the U.S. could use such information to target the companies. (emphasis added)
... Properly exploited, the WTO victory had the potential to be the catalyst for the re-emergence of our I-Gaming sector as a significant factor in our economy. However in order to better understand current developments it is perhaps important that we reflect on the genesis of the WTO dispute.
Antigua & Barbuda is rightly afforded the distinction of being the birthplace of what is one of the more vibrant and successful forms of E-Commerce. Home at one stage to almost the entire industry, the gaming sector has grown rapidly and already is a multi billion dollar industry.
At one point Antigua was home to approximately one hundred and twenty gaming companies. With employment estimated at approximately three thousand people or about 10 per cent of our working population, the industry also contributed about $20 million in licence fees per annum to the Free Trade and Processing Zone.
Its broader contribution to the overall economy was estimated at between eight to 10 per cent of our GDP.
The United States has reached a deal with the European Union, Japan and Canada to keep its Internet gambling market closed to foreign companies, but is continuing talks with India, Antigua and Barbuda, Macau and Costa Rica, U.S. trade officials said on Monday.
The decision is a disappointment for European online gambling companies who hoped a case brought by Antigua several years ago at the World Trade Organization gave them a foothold to get back in the U.S. market after being kicked out by Congress last year. ... (USTR's Gretchen) Hamel said the deal reached with the EU, Japan and Canada "involves commitments to maintain our liberalized markets for [i][b]warehousing services, technical testing services, research and development services and postal services relating to outbound international letters."
European gambling companies had argued the EU was entitled to as much as $100 billion in compensation for being denied access to the U.S. market. But EU officials never publicly embraced that amount and U.S. officials called it an exaggerated figure.
... The valuation of the package was believed to fall far short of the $100 billion that European online gambling sites had claimed the United States owed. EU officials could not immediately say how much the deal was worth. "This compensation cannot be quantified up to the euro," the EU mission to the World Trade Organization said. "Nonetheless, it is clear that new trade opportunities are created for EU service suppliers in important sectors in the" United States, it said.
... Australia dropped its claim while Japan reached a deal.
... "This is by far the most significant WTO case ever," said Naotaka Matsukata, a policy adviser with Alston + Bird and a former U.S. trade official.
Antigua's request for an intellectual property rights waiver has raised alarms among trade associations that represent the largest software and media companies, including Microsoft and Universal Pictures, and the Recording Industry Association of America.
"Antigua literally is the mouse that roared," said Robert Lighthizer, head of the international trade practice at Skadden, Arps, Slate, Meagher & Flom.
... EU officials said the postal and courier concessions would affect how DHL, the express and logistics division of Deutsche Post World Net of Germany, competed with U.S.-based companies FedEx and United Parcel Service. "The EU is a very active exporter of postal services and has significant export interests," said Clare Kelly, a trade analyst at the Geneva law firm White & Case. "It's an area where there is potential for expansion, and if the EU has achieved greater binding commitments, they must construe it as useful to them." Uwe Bensien, a Deutsche Post spokesman, said it was "too early to say" what benefits the settlement would bring.
Public review of the settlement consultation documents:
To ensure prompt and full consideration of responses, USTR strongly recommends that interested persons submit comments by electronic mail to the following e-mail address: FR0714@ustr.eop.gov.
Persons making submissions by e-mail should use the following subject line: ``Services Article XXI Negotiations.'' Documents should be submitted in WordPerfect, MSWord, or text (.TXT) files. Supporting documentation submitted as spreadsheets is acceptable in Quattro Pro or Excel format. For any document containing business confidential information submitted electronically, the file name of the business confidential version should begin with the characters ``BC-'', and the file name of the public version should begin with the character ``P-''. The ``P-'' or ``BC-'' should be followed by the name of the submitted information. Persons who make submissions by e-mail should not provide separate cover letters; information that might appear in a cover letter should be included in the submission itself. To the extent possible, any attachments to the submission should be included in the same file as the submission itself, and not as separate files.
Written submissions will be placed in a file open to public inspection pursuant to 15 CFR 2003.5 (the hand giveth), except confidential business information exempt from public inspection in accordance with 15 CFR 2003.6 (the hand taketh away) must be clearly marked ``Business Confidential'' at the top of each page, including any cover letter or cover page, and must be accompanied by a non-confidential summary of the confidential information. All public documents and non-confidential summaries will be available for public inspection in the USTR Reading Room in Room 3 of the Annex of the Office of the USTR, 1724 F Street, NW., Washington, DC 20508. An appointment to review the file may be made by calling (202) 395-6186. The USTR Reading Room is generally open to the public from 10 a.m.--12 noon and 1 p.m.--4 p.m., Monday through Friday. Appointments must be scheduled at least 48 hours in advance.
Chairperson, Trade Policy Staff Committee.
A symbol of the great American dream – The Pontiac – will be born, bred and manufactured right here in Australia, symbolising the new era of federal and state governments working towards better outcomes for Australia. In an early indication of cooperative federalism, Federal Minister for Trade, Simon Crean, South Australia’s Acting Premier and Minister for Industry and Trade, Kevin Foley, and Victoria’s Industry and Trade Minister, Theo Theophanous, joined today to ship out the first fleet of Holden’s new Commodore-based Pontiac G8 cars bound for the USA.
Mr Crean said it marked the start of an export program that could see up to 30,000 re-engineered Commodores sold on the US market every year. (emphasis added) “We need strong export strategies and innovation to succeed in the US market.” Mr Crean said. “I’m committed to lifting Australia’s productivity and export performance, including through a review of Australia’s trade policies. The Federal Government will also conduct a broad-ranging review of the car industry to start early next year to ensure that it remains competitive into the future. Holden shows that with the right product, people and policies, Australian manufacturers can succeed.”...
The Weiser Group will host a conference call briefing with global trade experts to discuss today’s announcement of an agreement between the U.S. and the E.U. concerning Internet Gambling at 9:30 am Dec. 18/07.
European online gaming companies were dealt a blow on Monday as the European Union agreed to a US offer to open some other services markets as compensation for closing its online gambling market to foreign operators. Shares in UK-listed PartyGaming fell by 4.1 per cent and Bwin, the Austrian operator, dropped 2.1 per cent as hopes for a tougher line from the EU in support of online gambling operators shut out of the US appeared to have been dashed. ... The agreement, which seeks to compensate European industries in exchange for the U.S. withdrawal of access to its domestic gambling market, raises more questions than it answers:
What will be the impact on the WTO system?
How does the agreement deal with discriminatory practices and selective prosecution?
How will U.S. legislative efforts be affected?
What happens now to Antigua’s arbitration with the U.S.?
The conference call will take place at 9:30 am EST, Tuesday, December 18, 2007:
· U.S. based callers should dial: 1-800-704-9804
· Overseas-based callers should dial: 1-404-920-6604
· The participant code for all callers is: 991446#
Trade experts participating in the briefing call will be:
Industry personnel are advised to contact as many as their friends as possible in order to participate.
Note: We were pleasantly informed just after the call that unfortunately a transcript will not be available. Nevertheless, the Weiser Group is taking questions. Send them to email@example.com, whose snappy reply will likely issue in minutes.
To: FAIT Contact Us
Sent: Tuesday, December 18, 2007 12:56 PM
Subject: GATS-slash Compensation - Valuation?
I understand Canada has now settled with the almighty U.S. over GATS-slash compensation resulting from the Internet gambling dispute with Antigua at the World Trade Organization (WTO): (see above). Are we happy with this deal? Is there some sort of report indicating why or why not in addition to the method used to value the concessions? Has Canada made any of its negotiations documents available for public scrutiny?
I also understand that Canada once played an active role in the dispute as a third party but backed down - shamefully, in the view of many of us.
Can we assume from the above that Canada now supports the U.S. decision to effectively decimate tiny Antigua's economy?
Are there any plans to allow actual Canadians (aside from Quebec Mohawks) access to Canada's domestic Internet gambling market?
How are negotiations progressing, if at all, toward Canada's entry into the EU? Green enthusiasts here would be most interested in acquiring Europe's energy-saving household appliances to say nothing of its excellent potations.
6.1 For the reasons set out above, the Arbitrator determines that the annual level of nullification or impairment of benefits accuing to Antigua in this case is US$21 million and that Antigua has followed the principles and procedures of Article 22.3 of the DSU in determining that it is not practicable or effective to suspend concessions or other obligations under the GATS and that the circumstances were serious enough. Accordingly, the Arbitrator determines that Antigua may request authorization from the DSB, to suspend the obligations under the TRIPS Agreement mentioned in paragraph 5.6 above, at a level not exceeding US$21 million annually. (emphasis added) (-- p. 78)
5.6 In its request for authorization to suspend concessions or other obligations, Antigua identified certain obligations under the TRIPS Agreement, that it proposed to suspend. Specifically, Antigua indicated that it intends to take countermeasures in the form of suspension of concessions and obligations under the following sections of Part II of the TRIPS:
Section 1: Copyright and related rights
Section 2: Trademarks
Section 4: Industrial designs
Section 5: Patents
Section 7: Protection of undisclosed information.
5.7 As we have determined above, Antigua may seek to suspend obligations under the TRIPS Agreement. In order for such suspension to be equivalent to the level of nullification or impairment of benefits accruing to Antigua, it must not exceed US$21 million. (pg. 77)
5.9 We note that our mandate does not allow us, in reviewing the equivalence of the proposed suspension with the level of nullification or impairment, to consider the "nature" of the obligations to be suspended.341 We understand this to mean that we may not question the complaining party's choice of specific obligations to be suspended (other than in the context of considering a claim that the principles and procedures of Article 22.3 have not been followed) and that we must assess the level ofthe proposed suspension, rather than its form, against the level of nullification or impairment. (pg. 77)
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