Lawmakers implored the Bush administration to consider a legislative change to the ban on Internet gambling today, instead of paying billions in compensation to the European Union and other trading partners for withdrawing gambling services from its international trade commitments.
House Financial Services Committee Chairman Barney Frank, House Judiciary Committee Chairman John Conyers and six other lawmakers panned the executive branch's handling of the issue in a letter to U.S. Trade Representative Susan Schwab, according to Reuters.
"Your agency has chosen not to consult with Congress, but instead to take what we view as a drastic step which could have significant consequences for the whole WTO system," the lawmakers said in the letter.
In past cases, the Bush administration has worked with Congress to comply with adverse WTO rulings.
The letter follows two significant events in the U.S. capital: a visit from EU Trade Commissioner Peter Mandelson, and a House Judiciary Committee hearing in which the WTO dispute nearly overshadowed the proceedings.
Mandelson was in Washington, D.C., last week to meet with lawmakers, including Frank, D-Mass., on a variety of trade issues, including the I-gaming ban and the compensation talks between the United States and the European Union. Until then, Mandelson had been dealing exclusively with the Office of the U.S. Trade Representative.
Mandelson has expressed his support for Frank's proposed Internet Gambling Regulation and Enforcement Act. He has also condemned the USTR for its position on I-gaming, but is looking for a satisfactory compromise in the negotiations.
And during a Judiciary hearing on the Unlawful Internet Gambling Enforcement Act, the committee heard testimony from international law expert Professor Joseph Weiler who said there was no doubt that the U.S. ban on Internet gambling was a violation of the WTO treaty. He also said that the United States' subsequent decision to remove gambling services from its commitments to the General Agreement on Trade in Services set a bad example for other WTO members.
The authors of the letter are concerned that compensation will not only be expensive to the U.S. economy, but that it may damage the United States' credibility as a trading partner.
It also could backfire by encouraging other countries to withdraw commitments that turn out to be "inconvenient or politically difficult," they said.
Click here to read the letter.