U.S.: Antigua and Barbuda has made resolving WTO gambling dispute difficult

The content originally appeared on: Antigua News Room

https://insidetrade.com/: Following recent criticism from Antigua and Barbuda and others at the World Trade Organization for not complying with a 20-year-old dispute ruling on online gambling, the U.S. this week countered that despite Washington’s best efforts, it was the Caribbean country making it hard to resolve the case.

Antigua and Barbuda, a small Caribbean island nation, has raised concerns at the past two Dispute Settlement Body meetings that the U.S. has never fully complied with a dispute brought by the country in 2003 over U.S. restrictions on cross-border gambling services. During the most recent meeting, on Monday, the U.S. responded by saying it has gone to great lengths to attempt to resolve the issue with Antigua and Barbuda but accused the country of rejecting all of Washington’s efforts.

“The United States is disappointed that Antigua and Barbuda continues to characterize the United States as not making any attempt to resolve the dispute. Very much to the contrary, the United States has repeatedly tried to resolve this dispute in a way that would bring benefits to Antigua and Barbuda’s economy and to its citizens,” the U.S. said, according to a copy of its remarks. “Time and again Antigua has rejected these efforts, favoring rhetoric over practical solutions.”

Antigua argued when it launched the dispute that the U.S. measures violated the General Agreement on Trade in Services. A dispute panel in late 2004 and the Appellate Body in 2005 largely agreed and recommended the U.S. bring its measures into compliance. Following a compliance panel that found Washington had not done so, St. John’s in 2007 was authorized by the WTO to retaliate against the U.S.

Given the significant disparity in economic size and power of the two parties, the WTO decision allows Antigua to suspend up to $21 million annually in intellectual property concessions to the U.S., a type of retaliation that is rarely awarded and has never been implemented. The country has been hesitant to use its retaliation due to its unusual nature as well as “threatening” statements made by the U.S. delegation during DSB meetings at the time, it said last month.

“Having exhausted all avenues to a settlement, it appears that Antigua and Barbuda is left only with the nuclear option of IP suspension,” it said on Monday, according to a copy of its remarks. “However, taking such a punitive course would likely come at significant economic and political costs to the Government of Antigua & Barbuda.”

The dispute “is regarded as a test case for those WTO Members seeking to determine whether the [Dispute Settlement Understanding] can deliver practical and timely benefits for small and vulnerable economies. For the DSB, the delegation of Antigua and Barbuda would like to believe that this protracted delay is extremely worrisome,” the country added.

The U.S. did not speak substantively to the issue last month but on Monday outlined what it considered to be Washington’s many attempts to resolve the dispute.

The U.S. noted that it never intended to include gambling services in its schedule of concessions and that such services are not explicitly in its schedule. “Nevertheless, the United States was found in breach of its commitment to grant market access under the GATS Schedule entry of ‘other recreational services (except sporting),’” it said.

Since then, the U.S. has made “consistent, good-faith efforts” to settle the dispute, Washington said, citing bilateral talks in 2008, 2013 and 2016 on a settlement that St. John’s ultimately rejected.

Additionally, the U.S. said, it has attempted to modify its schedule under GATS Article XXI to remove gambling services.

“[T]he United States prepared a generous package of services concessions as compensation for removing internet gambling from the U.S. Schedule. The United States negotiated under GATS XXI with Antigua and Barbuda, Australia, Canada, Costa Rica, the EU, India, Japan, and Macao,” the U.S. said.

“Antigua and Barbuda was and remains the only Member to block the United States from completing the Article XXI process,” it added.

“Unfortunately, for each new settlement offer, Antigua and Barbuda ultimately rebuked these good faith efforts to find a solution and responded by demanding tens of millions and then hundreds of millions of U.S. dollars in cash payments,” Washington said. “There is no basis for such an exorbitant request in the arbitrator’s decision or the Dispute Settlement Understanding.”

Both Antigua and the U.S. said they were willing to work together to find a solution, each calling on the other to do better in the future. Antigua and Barbuda said it hopes to see progress in 2024.

Several developing countries also took to the floor to support Antigua and Barbuda on Monday, according to a Geneva-based trade official familiar with the meeting. They included St. Vincent and the Grenadines, speaking for the African, Caribbean and Pacific Group; Nigeria, speaking for the African Group; Bangladesh; India; and South Africa.

“This lack of resolution, in particular the non-compliance of the world’s largest economy, and for many decades, its largest trading nation, in a matter involving one of the smallest WTO Members, undermines the rules-based system of adjudication,” St. Vincent argued, according to a copy of its remarks. “Essentially, when the most powerful shirk their responsibilities in upholding some of the basic tenets of multilateralism, the implications are systemic.” — Hannah Monicken ([email protected])

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