U.S. Staring at Possible WTO Sanctions

BusinessWeek.com reported the following Wednesday:

“The United States should face commercial sanctions worth more than US$3.4 billion (euro2.5 billion) each year for its failure to comply with a World Trade Organization ruling that its Internet gambling restrictions are illegal, the Caribbean nation of Antigua and Barbuda said Wednesday.

Antigua, which won a WTO ruling last year against the U.S. restrictions, is asking the trade body for authorization to target American trademarks and copyrights if the U.S. refuses to change its legislation.” 

In addition to simply not complying with the WTO’s ruling, the United States Trade Representative (USTR) announced back in May that, rather than appeal one more time, it is just going to remove its gambling commitments from its General Agreement on Trade in Services (GATS) schedule.  The purpose of GATS is to open services to international competition; each participating country has its own schedule of what services it will and will not include.   

When the U.S. developed its GATS schedule back in 1993, it did not exclude remote gambling from Sector 10, Recreational, Cultural and Sporting Services.  Many countries did.  Now, the USTR is saying that it made an error and had no idea that remote gambling was a possibility down the line.  In the meantime, remote gambling already existed in some forms in the United States at the time.  On top of that, the U.S. had knowledge of the other countries’ GATS schedules and most certainly must have seen that some had excluded remote gambling and some had not.  

While of course Wednesday’s announcement does not mean that online poker is destined to be legalized, it is certainly good news.  If U.S. corporations see the possibility of their intellectual property getting hijacked, they may put pressure on the government to correct its wrong.