Antigua files for Remedies- Seeks $3.4 billion per year in intellectual property

Dark Horse · 06-20-07, 06:46 AM

Love it. Microsoft won't.

capitalist pig · 06-20-07, 07:03 AM

I think the key phrase there is "could face comercial sanctions". Replace with would, and it would sounds more promising.

Later

JC · 06-20-07, 08:25 AM

Actual filing:

UNITED STATES – MEASURES AFFECTING THE CROSS-BORDER SUPPLY OF GAMBLING AND BETTING SERVICES (WT/DS285)

Recourse by Antigua and Barbuda to Article 22.2 of the DSU

Antigua and Barbuda requests that the following item be included in the agenda of the meeting of the Dispute Settlement Body (the “DSB”) of the World Trade Organisation (the “WTO”) to be held on 24 July 2007:

“United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services” (WT/DS285)

Recourse to Article 22.2 of the Understanding on Rules and Procedures Governing the Settlement of Disputes by Antigua and Barbuda

Pursuant to Article 22.2 of the WTO’s Understanding on Rules and Procedures Governing the Settlement of Disputes (the “DSU”), Antigua and Barbuda requests authorization from the DSB to suspend the application to the United States of concessions and related obligations of Antigua and Barbuda under the General Agreement on Trade in Services (the “GATS”) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (the “TRIPS”).

Antigua and Barbuda’s aim through this suspension is the effective withdrawal of concessions and other obligations so as to match the level of nullification or impairment of benefits accruing to Antigua and Barbuda, amounting to an annual value of US $3.443 billion, as a result of the United State’s failure, as of 3 April 2006, to bring its measures affecting the cross-border supply of gambling and betting services into compliance with the GATS or to otherwise comply with the rulings and recommendations of the DSB in United States– Measures Affecting the Cross-Border Supply of Gambling and Betting Services (“DS285").

Antigua and Barbuda has held discussions with the United States with a view towards agreement on compensation, but to date these discussions have not resulted in any agreement. Antigua and Barbuda remains hopeful that further discussions may result in resolution of this issue, and if so it will inform the DSB as soon as practicable.

Background

On 21 July 2003, the DSB established a panel at the request of Antigua and Barbuda. Both the panel and the Appellate Body in DS285 found certain measures of the United States to be inconsistent with the obligations of the United States under the GATS. On 7 April 2005, the DSB adopted the report of the panel, as modified by the report of the Appellate Body. The resulting DSB recommendations and rulings include, inter alia, the recommendation that the United States bring the measures found to be inconsistent with the GATS into conformity with its obligations under that agreement. (WT/DS285/AB/R, para. 374). A WTO appointed arbitrator subsequently determined that the “reasonable period of time” for the United States to implement the DSB recommendations and rulings would expire on 3 April 2006.

The compliance period expired on 3 April 2006 without action being taken by the United States to bring its measures into compliance with the recommendations and rulings of the DSB in DS285. On 10 April 2006 the United States submitted a status report to the DSB regarding implementation of the DSB recommendations and rulings in which the United States informed the DSB that, in its opinion, it was in compliance with the DSB recommendations and rulings. At a meeting of the DSB on 21 April 2006, the United States informed the Members that the United States was in compliance with the DSB Rulings. At the same meeting, Antigua expressed its disagreement with the United States' assertion of compliance.

On 23 May 2006, Antigua and the United States concluded “Agreed Procedures under Articles 21 and 22 of the Dispute Settlement Understanding Applicable to the WTO Dispute United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services (WT/DS285)” (the “Agreed Procedures”). In conformity with the Agreed Procedures, on 8 June 2006 Antigua made recourse to Article 21.5 of the DSU by requesting consultations with the United States. Subsequent consultations were held in Washington, D.C., but did not result in a settlement of the dispute. As there was clearly a dispute between the parties “as to the existence or consistency with a covered agreement of measures taken to comply with the recommendations and rulings” of the DSB in the original proceeding, on 6 July 2006 Antigua submitted a request for the establishment of a panel pursuant to Article 21.5 of the DSU, and at its meeting of 19 July 2006 the DSB agreed to form the panel.

On 30 March 2007, the panel issued its report, in which it concluded that the United States remained out of compliance with the recommendations and rulings of the DSB in this matter.

Pursuant to Article 22.2 of the DSU and paragraph 7 of the Agreed Procedures, Antigua and Barbuda hereby requests authorization from the DSB, at the next meeting of the DSB to be held following the provision of this notice, to suspend the application to the United States of concessions and related obligations under the TRIPS and the GATS in an annual amount of US $3.443 billion.

Antigua and Barbuda Recourse to Articles 22.3(b) and (c) of the DSU

In considering what concessions and obligations to suspend, Antigua and Barbuda applied the principles and procedures set forth in Article 22.3 of the DSU, and makes this request pursuant to Articles 22.3(b) and (c). Antigua and Barbuda is a developing country with a population of approximately 80,000. With a combined landmass of only 442 square kilometres, Antigua and Barbuda is by far the smallest WTO member to have made a request for the suspension of concessions under Article 22 of the DSU and realises the difficulty of providing effective counter measures against the world’s dominant economy. The natural resources of Antigua and Barbuda are negligible and as a result not only are the country’s exports limited (approximately US $4.4 million annually to the United States) but Antigua and Barbuda is required to import a substantial amount of the goods and services needed and used by the people of the country. On an annual basis, approximately 48.9 percent of these imported goods and services come from single source providers located in the United States. The imposition of additional import duties on products imported from the United States or restrictions imposed on the provision of services from the United States by Antigua and Barbuda will have a disproportionate adverse impact on Antigua and Barbuda by making these products and services materially more expensive to the citizens of the country. Given the vast difference between the economies of the United States and Antigua and Barbuda, additional duties or restrictions on imports of goods and services from the United States would have a much greater negative impact on Antigua and Barbuda than it would on the United States. In fact, ceasing all trade whatsoever with the United States (approximately US $180 million annually, or less than 0.02 percent of all exports from the United States) would have virtually no impact on the economy of the United States, which could easily shift such a relatively small volume of trade elsewhere.

Antigua and Barbuda further considers that the circumstances are serious enough to justify the suspension of concessions or obligations under other covered agreements in addition to the GATS. As a result of Antigua and Barbuda’s lack of natural resources, the bulk of the economy is dependent upon tourism and the provision of banking and other financial services. Antigua and Barbuda, initially with the cooperation of the United States government, looked to the provision of gambling and betting services as a way to diversify its economy and create the growth needed to assist the country in moving from a developing to a more advanced status. Prior to the actions taken by the United States to prevent the provision of gambling and betting services from Antigua and Barbuda to consumers in the United States, it is estimated that the gambling and betting services sector accounted for more than ten percent of the gross domestic product of Antigua and Barbuda and was the fastest growing segment of the economy. Recent efforts by the United States government to further prohibit and impede the provision of these services to consumers in the United States have greatly harmed the Antiguan service providers, while domestic providers in the United States continue to prosper in the absence of prohibition and criminal prosecution. Under the circumstances, the United States’ prohibition of these services and its non-compliance with the recommendations and rulings of the DSB in DS285 forces Antigua and Barbuda to proceed in the manner requested despite the difference in level of development with the United States, the large disparity in their trade relations and despite the harsh economic reality affecting Antigua and Barbuda which affects its ability to exercise its rights under Article 22.

In addition to the reasons described above, the suspension of concessions and other obligations corresponding to a value of US $3.443 billion and wholly applied to the importation of services from the United States is neither practicable nor effective for various reasons. First, Antigua and Barbuda made no commitments under the sector at issue in DS285, GATS Sector 10.D., “Sporting and Other Recreational Services,” in its Schedule of Specific Commitments under the GATS (GATS/SC/2) (the “Antigua Schedule”). Second, with respect to most of the other services covered by the Antigua Schedule, as noted above suspension of concessions in the form of higher duties, tariffs, fees or other restrictions would have a disproportionate impact on the economy of Antigua and Barbuda and little or no impact on the United States. Third, even if Antigua and Barbuda were to rely exclusively on a suspension of concessions under the GATS, Antigua and Barbuda would clearly not be able to recover the full amount of nullification and impairment caused by the inconsistent measures.

Additionally, in Antigua and Barbuda’s view, the United State’s continued non-compliance renders the circumstances serious enough, within the meaning of Article 22.3(c) of the DSU, to justify the imposition of appropriate countermeasures under other covered agreements, given that Antigua and Barbuda’s gaming industry will continue to suffer serious losses, the government of Antigua and Barbuda will be deprived of critical revenue, the people of Antigua and Barbuda will be enjoined from participating in much needed employment and the overall economy of the nation will continue to suffer adverse effects for such time as the United States does not withdraw the measures at issue in DS285 or remove their adverse effects.

Summary of Countermeasures

Because the withdrawal of concessions solely under the GATS is at present not practicable or effective, and the circumstances are sufficiently serious to justify Antigua and Barbuda exercising its rights under Article 22, Antigua and Barbuda requests authorization to suspend concessions and other obligations under the TRIPS.

For the reasons given above, Antigua and Barbuda intends to take countermeasures in the form of suspension of concessions and obligations under the following sections of Part II of the TRIPS:

Section 1: Copyright and related rights
Section 2: Trademarks
Section 3: Industrial designs
Section 5: Patents
Section 7: Protection of undisclosed information

Suspension of Concessions Under the GATS

Antigua and Barbuda may also suspend horizontal and/or sectoral concessions and obligations for the following sector contained in the Antigua Schedule:

2. Communication Services

Until such time as the United States brings its measures into compliance with the rulings and recommendations of the DSB in DS285, every year Antigua and Barbuda will notify the DSB of the amount and the form of the suspension of concessions if proposed to be different in any respect from the preceding fiscal year, as applicable.

Compliance with Article 22.4

As required by Article 22.4 of the DSU, the level of suspension of the above concessions or other obligations proposed above by Antigua and Barbuda is lower or equivalent on an annual basis to the nullification or impairment of benefits accruing to Antigua and Barbuda resulting from the United States’ failure to comply with the DSB’s recommendations and rulings in DS285.

JC · 06-20-07, 09:39 AM

Antigua's Press Release:

ANTIGUA SEEKS APPROVAL FOR TRADE SANCTIONS AGAINST THE UNITED STATES IN GAMBLING CASE

ST. JOHNS, Antigua. The government of Antigua and Barbuda today announced that it has moved under Article 22 of the Dispute Settlement Understanding of the World Trade Organisation to seek the imposition of trade sanctions against the United States for having failed to comply with a WTO ruling in favour of Antigua on the subject of cross-border gambling and betting services. In the filing made today, Antigua has informed the WTO of its intention to seek concessions with an annual value of US $3.443 billion, primarily through the suspension of Antigua’s obligations in respect of copyrights, trademarks, industrial designs and patents under the WTO’s intellectual property rights or “TRIPS” agreement. This action, once approved by the WTO, could have significant implications for American intellectual property rights and represents a material escalation in the stakes at play in the gambling case.

Dr L. Errol Cort, Antigua’s Minister of Finance and the Economy, expressed his government’s resolve, stating “While we realise this is a significant step for Antigua and Barbuda to take, we feel we have no other choice in the matter. We have fought long and hard for fair access to the United States market and have won at every stage of the WTO process. Until such time as the United States is willing to work with us on achieving a reasonable solution to this trade dispute, we will continue to use every legitimate remedy available to protect the interests of our citizens.”

Antigua has expressed its frustration on many occasions over the failure of the United States to engage with Antigua over a mutually agreeable bilateral resolution of the dispute, and instead maintaining an uncompromising posture despite repeated success by Antigua in the WTO dispute resolution system. In the most recent, 30 March 2007 WTO report on the case, the reviewing panel observed that the United States maintains an extensive domestic remote gaming industry while prohibiting foreign service providers access to the markets. The report also clarified that United States laws as written and applied sanction many domestic remote gambling opportunities, none of which are available to Antiguan service providers.

“Despite having been dressed up by the United States as a moral issue,” said Dr Cort, “All along this has simply been a trade issue. This industry has been and can be regulated. We are willing to work with the United States government to ensure that its legitimate interests are protected. But unfortunately, there appear to be powerful interests in the United States that want to protect the domestic industry from competition. That is not only unfair and wrong, but contrary to the letter and spirit of the WTO agreements.”

The sanctions requested by Antigua will come into effect shortly, unless the United States refers the issue to arbitration, in which event a panel of WTO arbitrators will decide on the final level and scope of the sanctions that may be imposed by Antigua. The recent, unprecedented announcement by the United States that it was acting to withdraw its commitments in respect of gambling and betting services has not altered Antigua’s strategy. “We remain entitled to the benefits of our victory in the WTO,” said Mark Mendel, Antigua’s lead counsel in the case. “Whether the United States is able to withdraw its commitment with respect to other countries is one thing, but Antigua has its victory and the United States is obligated to comply with it. With Antigua poised to impose massive sanctions against substantial United States business interests with absolutely no connection to gambling, it certainly seems time for the United States to come to grips with this case and work out a settlement. But if we can’t convince the United States to sit at the bargaining table with Antigua, maybe some of the adversely affected American business interests will be able to do so.”

DrunkenLullaby · 06-20-07, 10:27 AM

Throughout the proceedings I have obviously been rooting for Antigua, but for throwing an absurd number like $3.4 billion per annum out there they now deserve what they will end up getting = absolutely nothing.

$3.4 billion...

per year...

for Antigua only.

I can only hope that whoever came up with this projection becomes head linesmaker at WSEX. That's the only way it will ever benefit me.

JC · 06-20-07, 10:45 AM

It is what it is. It was determined by economists.

When Barnet Frank brings a bill up he says it can bring in $2 to $4 billion a year in taxes.

When they indict BOS, they use a figure of $4.5 billion.

When analysts talk about the size of the industry they say it is $12 to $15 billion a year.

Let the US try to argue it down if they like. The panel will have the final say and there is no appeal.

tblues2005 · 06-20-07, 12:46 PM

JC thanks for the information maybe it will wake up some in Washington on this issue and get something done before long.

JC · 06-20-07, 01:51 PM

AP is reporting that Japan and India are filing for compensation.

BuddyBear · 06-20-07, 01:56 PM

The U.S. government is braindead.....thank god religious lunatics run this country...

Dark Horse · 06-20-07, 02:16 PM

We talked about this before they slipped in that law, and now it's happening. Excellent! Antigua, India, Japan, and no doubt others will follow. The US has forgotten itself. Instead of a kind and generous leader it has become the bully of the world; arrogant and imagining itself above international law. So now it gets what it deserves. A healthy dose of humble pie.

Before we complain about the amount, we have already poured in excess of 500 billion into the Iraq war, with the total cost estimated at over 1 trillion; mostly to line the pockets of the weapon industry and companies such as Haliburton. Where were those complaints when that was decided? Do we truly believe the Iraq war is fought for our benefit? lol.

Without copyright protection the US is in big trouble, because of the lower production costs in other countries. Microsoft shares would tumble faster than you could blink. The US will not allow this to happen. Most likely, attempts to bribe are already in full swing. If that doesn't work, this extremist administration (which is never wrong and always right) could possibly take very aggressive action against Antigua, in which case our money would, once again, be at risk. Finally, the US could comply, and internet gambling would be safe once and for all.

Fascism never wins. It may have some victories, because people don't expect it, but in the end totalitarians always go down. What a great thing that, of all things, it is gambling that may see the world unite against an evil US regime. If our desire to gamble would spur such a revolution, it was the best money ever spent (or won).

noyb · 06-20-07, 03:02 PM

the eu already announced yesterday it will also seek compensation. they said they will not seek compensation in terms of money for now, but in terms of trade concessions in other us industries.

every country with a bit of brains will file for compensation (a great chance for some free us money), so the list of countries will be very long it would seem to me.