PRESS RELEASE

Antigua's impudence: Challenging the US in the WTO

Reproduced from The Antigua Sun

St. John’s, ANTIGUA

Wednesday July 09 2003

"Impudence". That's the word frequently used when some observers describe Antigua & Barbuda's challenge to the United States in the Dispute Settlement Body of the World Trade Organisation.

After all, Antigua & Barbuda is a tiny, powerless Caribbean state of less than 100,000 people and the United States is the world's only superpower with a population of 300 million.

But, that is precisely the point.

The World Trade Organisation (WTO) is a rules-based organisation in which all its member-states, large or small, have an equal vote and are entitled to equal treatment, including their right to challenge any other state that violates its obligations under the General Agreement of Trade in Services (GATS).

And that is exactly what we have done.

Antigua and Barbuda has submitted a case to the Dispute Settlement Body (DSB) of the WTO requesting that an independent panel be established to adjudicate our dispute with the US. We are the first Caribbean country to do so, a fact made even more dramatic because it is the United States that we are challenging.

The DSB gave us a first hearing on 12 June, and will hear our case again on 21 July when we expect that a panel will be established even though the US will object as they did at the first hearing.

The nature of our complaint is very simple.

In its commitments under the GATS, the US bound itself to provide market access and national treatment to the cross-border supply of foreign services that come within the category of "other recreational services'. On a proper legal interpretation, this category includes gambling and betting services.

Yet, while many US operators are allowed to offer gambling services in the US, the authorities take the view that all gaming services offered on a cross-border basis from abroad, including Antigua and Barbuda, are unlawful. The US enforces this claim administratively by blocking credit card transactions and penalising credit card companies and banks that facilitate them, and by punishing US citizens and others who own gaming entities that provide services to US residents.

These actions by the US effectively prohibit all supply of gambling and betting services from Antigua to the US and have adversely affected this sector of our burgeoning e-commerce business. They amount to a US violation of its GATS commitment.

Up to two years ago, Antigua had over 100 gaming and betting Internet companies employing almost 5,000 people in a variety of information technology fields, including web design and maintenance. Today, we have only 36 companies left, and the number of employees has more than halved. What is more revenue to the Government from licence fees and other charges has declined by more than US$4 million per annum.

In the context of the size of Antigua & Barbuda's economy and population, the loss of jobs and government revenue is very significant.

Of even greater importance is the fact that the industry employs bright, computer-literate, young people who would otherwise be jobless.

The Antigua and Barbuda government has a duty of care to its population to defend their rights and the rights of the State under international law. And, this is why we have challenged the US in the WTO. We have done so fearlessly, and in the full knowledge that the US is itself the most active user of the dispute settlement machinery of the WTO. What is sauce for the goose is also sauce for the gander.

In its defence at the first hearing of our complaint at the DSB, the US posed a red herring. They claimed that they had "grave concerns over the financial and social risks posed by Internet gaming activities to its citizens, particularly but not exclusively children". However, in the consultations between Antigua and the US that preceded the DSB hearing, we had made it clear that the Internet gaming industry in Antigua is highly regulated, and children have no access to it. Gamblers are required to deposit funds before they can bet. To do so, they have to send a wire transfer from their bank accounts and provide their social security number, address and other means of identification. These strictly enforced rules make it impossible for children to gain access to the Internet gaming operations.

The US had also raised the possibility of organised criminals using Internet gaming for money laundering and other criminal purposes. We painstakingly pointed out that the way in which the industry operates and is regulated, such activities are impossible since the operators could only accept funds by bank-to-bank wire transfers which are all traceable, and that funds could only be paid to the accounts from which punters send money in the first place. We also offered to comply with any suggestions from the US to strengthen our regulations. No suggestions were made.
The US itself is the main centre of the world for gambling. Total spending in commercial casinos alone reached almost US$26 billion in 2001. And, that is only one aspect of legalised gambling in the US, and it is not the biggest. In this context, the possibilities for organised crime and other illegal activity loom much larger.

As a small state, we may be guilty of "impudence" in challenging the might of the US in the WTO. But, it is our right to do so, and we have an obligation to fight for our people's interest. This is all that we are doing. No more and no less.

We did the same thing when the Organisation for Economic Cooperation and Development (OECD) tried to make us their tax collectors and informants by imposing upon us a set of requirements that had no basis in international law, and no authorisation from an international body.

We expect an independent, WTO-appointed panel to adjudicate in our favour because our legal case is correct. It is to be hoped that if the panel finds against the US, the US Trade Representative's Office and other Departments in Washington will respect the decision of the adjudicators with the same vigour with which they demand compliance when other panels uphold the rights of the US.

This, however, is left to be seen.

by Sir Ronald Sanders
(The writer is Antigua and Barbuda's Chief Foreign Affairs Representative with Ministerial Rank. He has been leading negotiations with the US at the WTO)