ANTIGUA SUN: TALKING TOUGH…US will not budge on gaming dispute

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TALKING TOUGH…US will not budge on gaming dispute

Wed September 05 2007

ANTIGUA SUN
by Patricia Campbell


The US is unlikely to back down from its position on online gambling, despite facing billions of dollars in claims. Instead, it is maintaining that withdrawal from World Trade Organisation (WTO) trade obligations to grant market access to Internet gambling companies is the best way to resolve the ongoing dispute with Antigua and Barbuda.

In an interview with the Antigua Sun yesterday, a trade official in the office of the United States Trade Representative (USTR), who asked not to be named in this article, said the US sees its current course as the best way of achieving closure on the issue.

“We are trying to clarify, by using Article 21 of the GATS agreement (General Agreement on Trade in Services) that our obligations should not extend to gambling,” he said.

An offshoot of this Article 21 process is that the US must reach settlements with all WTO member states which filed compensation claims. In May, after the WTO formally adopted the ruling of its Dispute Settlement Body declaring the US in continued violation of its commitments under the GATS, in relation to the restrictions the US has placed on remote gambling, Antigua and Barbuda called on the 150 members of the WTO to join it in filing compensation claims against the United States.

The European Union, Australia, Canada, Costa Rica, India, Macao and Japan answered that call.

“We are actively working to negotiate, under Article 21, with all of the WTO members which made claims, and there are eight of them, including Antigua. We believe we can reach an expeditious solution using this procedure.

“We’ve been quite pleased, to date, that the members who have made claims seem to be approaching this issue with a sense of seriousness and realism and that they generally seem determined to reach a solution; and we continue to believe that this Article 21 process is really the path that is most likely to lead to a resolution of this issue,” the trade official told the SUN.

This assessment conflicts with those of Antigua and Barbuda’s WTO attorney Mark Mendel who, in an interview with the SUN shortly after meeting with US Article 21 negotiators at the beginning of August, dismissed the meeting as unproductive and accused the US team of calling the meeting simply so they could say they had met with Antigua and Barbuda. The USTR representative was also present at that meeting and told the SUN that on the other hand that the session was useful.

“There were no specific decisions made, but I think at the end of that meeting we understood each other’s positions much better,” he said, adding that the USTR team hopes to meet with Antigua and Barbuda’s lawyers and government officials at least once more.

The US trade official pointed out that the WTO requires the parties to keep the details of their talks confidential in order to promote negotiated settlements, but said that the claimant nations are not submitting total values to their claims at this point. Queried about the widely publicised $15.5 billion claim being put forward by the European Union, the trade official said that he was unclear of the origin of that figure, which he indicated has not turned up thus far in the negotiations.

He added that all eight countries have argued that they have, in one way or another, an interest in gambling in the US. “Those interests can take various forms and, in fact, they vary quite drastically across these eight members, so their claims obviously reflect the differences in the nature of the way they believe they would be affected by our proposal to clarify that gambling is not included in our obligations,” he said.

The deadline for the conclusion of the Article 21 process is 22 September and that though extensions are possible, the USTR says that it is working towards a conclusion to the negotiation of resolutions by that period. This withdrawal of GATS commitment is being treated as a separate, though connected issue, to the trade claim being pursued by Antigua and Barbuda at the WTO.

Last Friday, Antigua and Barbuda presented a written submission to justify its US$3.4 billion per year claim against the US. As Antigua and Barbuda’s attorney at the WTO Mark Mendel explained it, the methodology paper was a description of how Antigua and Barbuda came up with its damages. The US response to the submission, he said, is due on 19 September and then Antigua and Barbuda will get a chance to respond to the US position on 4 October.

“The decision is made by the same panel that we were before last time, which was very sympathetic to us and it will be issued on this issue before the end of November,” Mendel explained yesterday.

The USTR official declined to comment on Antigua and Barbuda’s submission, pointing out that there has been insufficient time to study it carefully, but the US continues to hold the position that the damages being claimed appear disproportionate. “Our view is that the figure seems excessive, but we’re going to have to study the economic methodology that’s been put forward and we’re going to have to have our own economists look at it and we will have a response to it,” he said.