WTO Deadline Comes and Goes with No US Compliance

3 April 2006

The U.S. deadline to comply with a World Trade Organization ruling in a dispute brought by Antigua and Barbuda was today, and as expected, the United States is not complying.

"This is too important of an issue for Antigua and for the sanctity of the multilateral trade system of the WTO to let pass. Our efforts to bring the United States into compliance will continue unabated."
- Mark Mendel
Counsel for Antigua

Now comes a period of between 20 and 30 days in which the U.S. and Antigua will communicate with the Dispute Settlement Body of the WTO to determine sufficient trade sanctions that Antigua may impose against the United States. Antigua's lead counsel, Mark Mendel, stresses that the impending trade sanctions are not intended to be a substitute for compliance and that the United States is still expected to bring its laws into compliance with WTO rulings.

Antigua initiated the WTO's dispute settlement process in June 2003. In April 2005, the tiny twin-island nation with a population of 70,000 obtained a ruling that the United States gives preferential treatment to domestic remote gambling operators, which is a violation of an international pact called the General Agreement on Trade in Services (GATS). The United States was advised by the WTO's Dispute Settlement Body to adjust its laws to provide fair treatment to both domestic and foreign remote gambling providers, and one year was thought to be a sufficient amount of time to accomplish this.

The United States stated on multiple occasions in the run-up to the deadline that "the U.S. Administration, in consultation with the U.S. Congress, has been working on appropriate steps to resolve this matter," but a look at the public Congressional record reveals no such consultation. Meanwhile, three longtime opponents of online gambling are heading a legitimate and serious effort to pass prohibitory online gambling laws that would egregiously violate the WTO ruling by providing carve-outs for certain U.S.-based remote gambling operators while prohibiting all foreign online gambling companies from accessing the U.S. market.

"Unfortunately, the United States in this case has neither complied with the WTO decision nor worked with Antigua in good faith to find a reasonable solution," stated Dr. L. Errol Cort, Antigua and Barbuda's Minister of Finance and the Economy.

Dr. Cort pointed out that while the U.S. has ignored compliance issues when dealing with the Antiguan ruling, U.S. Trade Representative Rob Portman last week warned China of the consequences of not complying with a WTO ruling favoring the United States.

"Ironically," Cort said, "I can find no better words in response to the United States' inactivity than to paraphrase those of United States Trade Representative Rob Portman made in relation to China last week: 'As a mature trading partner, the Unites States should be held accountable for its actions and be required to live up to its responsibilities.'"

Mendel says he has already begun pursuing remedies that allow WTO members to impose trade sanctions against other members who do not comply with a dispute ruling.

"We have already started the process," he said, "and barring immediate movement by the USTR on the issue, we will be making a filing with the WTO for suspension of certain trading concessions before the end of the month."

Mendel notes that the institution of trade sanctions does not bring the case to the end, and that the United States is still obligated by WTO guidance to come into compliance with ruling on the dispute.

"This is too important of an issue for Antigua and for the sanctity of the multilateral trade system of the WTO to let pass," he said. "Our efforts to bring the United States into compliance will continue unabated."