Snake Eyes for US at the WTO

By Wedekind, Jennifer | Multinational Monitor, May-June 2007 | Go to article overview
Save to active project

Snake Eyes for US at the WTO

Wedekind, Jennifer, Multinational Monitor

AFTER LOSING a World Trade Organization (WTO) case concerning online gambling, the United States in May said it will no longer agree to subject its Internet gambling rules to WTO jurisdiction. The move opens the United States to sanctions from any of the 149 member countries in the WTO that can show their businesses were harmed by U.S. actions.

"We did not intend and do not intend to have gambling as part of our services agreement," says Deputy U.S. Trade Representative John Veroneau. "What we are doing is just clarifying our commitments."

Under the WTO's General Agreement on Trade in Services (GATS), members are allowed to select which services to include for coverage. While some members only included a few services in their commitments, others listed more than 120. The United States originally included gambling on its service list, thereby subjecting it to WTO standards. By withdrawing gambling from its list of commitments, the United States in the future will not have an international obligation to allow foreign investors to provide gambling services and can regulate Internet gambling without fear of retaliation from other WTO countries.

The chain of events leading to the U.S. decision to pull its gambling regulations from WTO jurisdiction began in March 2003, when the twin Caribbean island nation of Antigua and Barbuda filed a suit against the United States challenging U.S. remote gambling laws as "barriers to trade" in "cross-border gambling services" under GATS.

"The law appeared to be solidly on our side, despite the fact that a number of WTO legal issues had not been considered before," says Mark Mendel, Antigua's lawyer in the matter. "We thought it was going to be very hard for the United States to defend the case with a straight face, given how pervasive legalized gambling is in America. We have since learned that having a straight face is not a prerequisite for a job at the" U.S. Trade Representative (USTR).

In November 2004, a WTO dispute settlement panel ruled for Antigua. The United States then appealed to the WTO Appellate Body, arguing that its laws were "necessary to protect public morals," and therefore were protected by a WTO exception. The United States argued that Internet gambling nurtures gambling addictions and makes it difficult to screen out minors and prosecute fraud. The Appellate Body accepted this reasoning for three of the challenged laws, but ruled that another law, the Interstate Horse Racing Act, still violated GATS because it allowed bets to be placed remotely across state lines, but not from Internet servers based in foreign nations.

The United States further argued that it should not be liable under WTO rules because no one had envisioned the availability of online gambling, when the Clinton administration signed the trade agreement in 1994. "It never occurred to us that our schedule could be interpreted as including gambling until Antigua-Barbuda brought this case," Veroneau says.

"What the United States is now claiming is 'mistake,'" Mendel says, "and arguing that as a 'mistake,' no other nation should have a claim based upon it. What a horrible thing to say to your trading partners, and what an awful precedent to set.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Cite this article

Cited article

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Snake Eyes for US at the WTO


Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?