BUSINESS

US offered Antigua pennies on the dollar to resolve WTO dispute

TAGs: Antigua, ronald sanders, World Trade Organization, WTO

antigua-america-wto-dispute-ronald-sandersOn Friday, Sir Ronald Sanders, Ambassador Extraordinary and Plenipotentiary to the United States and the Organization of American States for Antigua and Barbuda, appeared before the World Trade Organization’s Dispute Settlement Body, to update his government’s position on its 14-year online gambling trade fight with the United States.

The dispute, which has been covered at length on this site, involved US efforts to block Antigua-licensed gambling sites from doing business with US customers. The WTO found the US to be in violation of its international trade obligations, and dismissed US efforts to overturn this ruling.

To pressure the US into abiding by its obligations, the WTO authorized Antigua to collect $21m in annual penalties from the US. To date, the US has neither altered its protectionist stance on the online gambling issue, nor has it paid Antigua a single penny of the $270m in outstanding penalties that have piled up since the WTO first ruled in Antigua’s favor.

Earlier this month, Sanders (pictured) urged the US to honor its debt to Antigua to help fund the rebuilding efforts in Barbuda, which was devastated by Hurricane Irma’s Category 5 fury.

On Friday, Sanders repeated his call for timely justice, and also revealed that the US had offered Antigua a mere $2m to resolve the matter last year — a sum that represents less than 1% of America’s outstanding obligation. Sanders noted that $2m would not even cover the legal fees that Antigua has spent pursuing justice at the WTO, and that the US has failed to respond to Antigua’s communications since making this pitifully small offer.

Sanders also noted that Antigua has yet to undertake its ‘nuclear option’, i.e. offering royalty-free digital downloads of US intellectual property, despite the WTO having granted Antigua full authority to take this step. Sanders said it would be “very regrettable” if Antigua was forced to take this route, as Antigua would prefer not to inflict harm on individual copyright holders, and because Antigua has and continues to view America as a friend. Sanders’ full speech is reprinted at the bottom of this article.

In its response, the US Trade Representative reportedly expressed sympathy for Barbuda’s plight and said it was working with Antigua to aid Barbuda’s recovery, while repeating its claims that it remains committed to resolving the online gambling dispute through future engagement with Antigua.

Lip service aside, it’s clear the US had bigger fish to fry at the WTO on Friday, including injecting more molasses into the process by which international trade disputes are resolved. The DSB had permitted certain judges to continue to work on files after their four-year terms had expired, essentially allowing judges with experience in certain cases to finish their work, rather than turn the process over to new members who may not be as up to speed on the details.

The US rejects the validity of reports filed by these former judges, and claims that disputes should now be decided by unanimous content of the judges present. Critics say this creates the possibility that lone judges could nullify appeal rulings, and believe that such tactics reflect US President Donald Trump’s disdain for all international bodies that could interfere with US hegemony.

Tellingly, Friday saw the US approve a ruling involving some of these former judges, but only because it involved a dispute between Indonesia and the European Union, i.e. the US had no skin in this game, and thus could afford to look committed to the idea of ‘and justice for all.’

——-

WT/DS285: United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services

Antigua and Barbuda’s DSB Statement
By Ambassador Sir Ronald Sanders
on
Friday, 29 September 2017

Mr Chairman

It continues to be most unfortunate that, despite 14 long years of deprivation, Antigua and Barbuda has to appear before this body, year after year, to report that the United States has not seen it possible to offer fair and equitable terms to my small country for the significant losses in trade revenues that it has suffered as a result of U.S. violation of the General Agreement on Trade in Services (GATS).

At the last meeting of this body on 23rd November 2016, at which this matter was discussed, the delegation of the United States indicated that it had offered “a broad range of useful suggestions to settle this dispute in November 2013, only to have Antigua ignore the U.S. offer for a long period of time before finally indicating that it was not acceptable”.

For the record, Chair, my delegation is compelled to advise that, in accordance with the award made to my country by the Arbitration Panel established by this Body, the trade losses to Antigua and Barbuda now stands at more than US$200 million.

The U.S. offer that my Government found “not acceptable” did not amount to $2 million.

It should be no surprise, therefore, that my Government could not accept the offer.

It cost my small country much more than $2 million simply to bring the trade dispute to the attention of this Body and to seek redress in conformity with established and binding rules.

The U.S. delegation also told this body last November that “pursuant to Article XXI of the GATS”, the U.S. offered “a generous package of services concessions as compensation for removing internet gambling from the U.S. schedule”, adding that “Antigua is the only Member to block the United States from completing this process”.

My delegation is further obliged to point out that my Government has not “blocked” the United States from removing its commitment from its schedule.

We have acted to safeguard our rights.

And at such time as the U.S. makes a fair, equitable and just offer to Antigua and Barbuda for the extreme harm done to our economy, we stand ready to act in an appropriate manner consistent with the rules of this Organization that the U.S. helped to fashion.

Chair, other countries – not named by the U.S. delegation last year – have released the U.S. from its GATS obligations in this particular matter because, although these countries did not pay the cost of bringing it before this Body, the U.S. has settled their losses in ways that remain undisclosed to this Body and to my government.

It can hardly be fair or just that the U.S. has reached settlements with other countries and not with my small country which was the principal victim of losses in trade revenues and employment.

The delegation of the United States also told this Body last year that “the regulation of cross-border gambling is a matter of public morality”.

Consequently, my delegation is obliged to point out that in April 2005, the Appellate Body of this organization found that the U.S. could not invoke a “morals defense” to its violation of the GATS.

What is more, while the U.S. has banned internet gaming from foreign providers, domestic gambling service providers continue to operate and thrive.

Last November, the U.S. delegation advised this body that the government was reviewing “the most recent communication” from my government and that it “will continue to work expeditiously toward finding a realistic settlement”.

It is with profound regret that my delegation has to advise that 10 months later, my Government has not received a response from the U.S. despite many overtures, including our most recent letter of 5th June 2017 to the US Trade Representative which has gone unanswered.

Chair, my delegation points out that the size of Antigua and Barbuda’s economy is a mere US$1.4 billion; the size of the US economy is US$18 trillion.

Further, over the 14 years in which my small country has suffered trade revenue losses in this particular matter, exceeding US$200 million, we have in no way taken any hostile or retaliatory action against the U.S.

Indeed, the contrary is the truth.

For, over that same period, the U.S. enjoyed a trade surplus with Antigua and Barbuda of U$2 billion, as we continue to purchase almost 70 per cent of goods and services from the U.S.
We have not diverted our purchases away from the U.S. market.

Therefore, while the trade revenues losses to my small country is almost 20 per cent of our Gross Domestic product, settling with us would represent only .0011% of one year of the GDP of the United States.

Chair, my country has just suffered enormously from the ravages of Hurricane Irma.

Three weeks ago, the island of Barbuda, our second most populous island, was completely decimated by the Category 5 hurricane’s battering which left all the inhabitants homeless and with no potable water, no electricity, no hospital and no school.

My government was forced to declare the island a disaster and to evacuate all the residents to Antigua where they are now being maintained in difficult and cramped circumstances despite our best efforts with limited resources.

For the first time in 300 years, there is not a single permanent resident on Barbuda, and Antigua is faced with an unexpected and unscheduled increase of 3 percent of its population and all the demands that such a sudden influx of people entails.

Additionally, we are confronted with an estimated cost of more than US$250 million to rebuild Barbuda and to resettle its inhabitants in their homeland.

There would be no better time than now, for the United States to settle this long-running issue which mars an otherwise friendly relationship between our two countries that has existed for generations.

Of course, Chairman, Antigua and Barbuda has the option of implementing suspension of U.S. intellectual property rights which is the award given by the Arbitral Bodies of this Organization.

Over these many years, we have not done so, not because we can’t, or because we haven’t had offers to help us implement the award in a transparent way and consistent with the DSB’s authorization.

We have not done so because we have too high a regard for the U.S. owners of intellectual property who have contributed much to the enjoyment and advancement of the world.

We had hoped that the U.S. government would respond to our restraint in ways that would settle this issue without causing any loss of income to U.S. copyright holders.

Chair, we are aware that in 2010, Brazil was awarded the right to suspend payment of U.S. intellectual property rights in compensation for trade losses.

The US settled with Brazil by cash payments of over US$440 million and other ways in 2010 and 2014.

It would be very regrettable, Chair, if tiny Antigua and Barbuda were compelled to be the first country to have to suspend payment of U.S. intellectual property rights despite its best efforts to reach a settlement with the U.S., its largest and richest neighbour to whom it has always been – and remains – a friend.

Thank you, Chair.

Comments

views and opinions expressed are those of the author and do not necessarily reflect those of CalvinAyre.com