Following the
World Trade Organization ruling that the US has been illegally blocking
financial payments to offshore online gambling companies based in Antigua, as
well as a dismissal of all US appeals to not bring their laws in conformity with
the GATS, it was thought that the American government would have no choice but
to change their policies and/or to amend legislation within the Unlawful Internet
Gambling Enforcement Act, which gives carve outs to online sports betting, lotteries
and fantasy sports.
The international
community was shocked, however, when the U.S. recently announced they would
unilaterally modify its original contract with the World Trade Organization in
regards to the initially agreed upon services agreement. According to a
statement made by U.S. Trade Representative spokesperson, John Veroneau, the
U.S. never intended to have gambling as part of the initial services agreement.
He went on to say that the modification of their agreement is simply a
clarification of the commitments of the U.S. However, Antigua's lead counsel,
Mark Mendel, says the US is wrong to say their commitments are vague. There were
lengthy debates and proposals from all WTO members in regards to the precise
service commitments that would be made by individual members at the time of the
initial treaty signing.
An insult in the
face of the World Trade Organization and the international community at large,
the proposed actions of the U.S. hardly seem allowable. However, the WTO treaty
does permit a member country to exercise a rarely used action to disavowal
original commitments in opening their market services to foreign providers in
other WTO member countries. It was not expected that the U.S. would resort to
this action, considering the original WTO treaty was negotiated on a
multilateral basis. This means that the U.S. will have to negotiate with any of
the 149 WTO member countries who object the moves by the U.S. and who may want
to renegotiate their own commitments.
In what is being
described as an opening of Pandora's box, the ultimate repercussions of this
show of brutal force are a degradation to the World Trade Organization. Smaller
countries with weaker economies, like Antigua and Barbuda, must be thinking what
good is the WTO if large powerhouse countries like the U.S. can do whatever they
want to do, despite the rulings of the WTO. At this stage in the matter, the
European Commission may file a complaint at the hands of Internal Market and
Services Chairman, Charlie McCreevy, although this is yet to be officially
confirmed.