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Wto Manouevring Could Open Up A Slippery Slope
The United States is the first member to attempt to
modify its trade agreement....but it may not be the last
The United States Trade Representative filed a motion to change
its original World Trade Organisation agreements on the international
passage of goods and services this week amid widespread criticism.
The application to cut online gambling out of the agreement and
the scope of the WTO is believed to be the first made in terms of
Article XXI of the General Agreement on Trade in Services (GATS)
and although the Americans have attempted to sell the idea as a
mere "clarification" necessary because there had been
no intention to include online gambling a decade ago, few observers
doubt that it is anything less than protectionism.
And it could have far-reaching legal effects.
"It opens up a slippery slope," said Joseph Kelly, professor
of Business Law at Buffalo State. "This is one of the first
times this has been done, and it's going to require a long period
of comment and other countries are going to be able to express their
opinions on this."
The U.S. move is its latest ploy to circumvent losing a long-running
dispute in the WTO with Antigua and Barbuda (see previous InfoPowa
reports), which challenged US actions against online gambling on
grounds that its measures were protectionist and discriminatory
in nature. The islanders charged that by allowing US citizens to
make interactive interstate wagers on horse races and state lotteries
while barring offshore companies from taking bets from U.S. customers,
the US was in contravention of the letter and the spirit of its
WTO agreements.
Having lost arguments and an appeal, the US Trade Representative
announced recently that it would be maintaining its online gambling
restrictions and instead of complying with the WTO findings would
seek to change its obligations and commitments through an Article
XXI application.
The application was submitted last Friday, and there will now be
a 45 day response window during which fellow members of the WTO
who feel they may be aggrieved or prejudiced by the application
may seek compensation. The USTR has already said that his government
does not feel that compensation is warranted, raising the liklihood
of further friction and tussles.
Several observers have opined that other nations could deploy similar
tactics in cases where WTO rulings did not go their way, or simply
to alter parts of their commitments with which they were no longer
content. Media commentators have implied that China in particular
could turn the tables on the USA by using the arguments in its copyright
dispute with the Americans now before the WTO.
The European Union appears less than happy with the situation,
too with European Commissioner Charlie McCreevy taking a wait and
see position but making openly critical comments that the US activity
on the Antigua dispute smacks of protectionism and could be the
subject of an EU response.
The US will have an extendable three month period once the 45 day
window for complaints ends. This is intended to provide space for
negotiations with aggrieved WTO members regarding compnesation.
"There's very little we can say until day 45, because we don't
know who is going to make a claim," said the USTR official.
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