Choosing between Liberalization and Regulatory Autonomy under GATS: Implications of U.S.-Gambling for Trade in Cross Border E-Services
King, Nancy J., Kalupahana, Kishani, Vanderbilt Journal of Transnational Law
In 2005, the World Trade Organization (WTO) Appellate Body presided over United States--Measures affecting the cross-border supply of gambling and betting services (U.S.-Gambling), in which Antigua argued that U.S. criminal laws banning the provision of cross-border online gambling services violate U.S. commitments under the General Agreement on Trade in Services (GATS). For the first time, the WTO's dispute settlement process directly addressed the application of GATS to domestic regulatory barriers restricting cross-border trade in services. This Article examines GATS rules on domestic regulation as well as the WTO Appellate Body and Panel decisions in the case and asks if the WTO has improperly restricted members' ability to regulate domestic concerns. What will be the broader impact of the WTO's rulings for cross-border trade in e-services? Highlighting the difficulties that members face in trying to resolve the conflict between liberalization and regulatory autonomy in the context of cross-border e-services, this Article argues that the scope of GATS rules on domestic regulation needs to be refined if GATS is to remain an instrumental force in liberalizing trade in e-services. The Article concludes with proposals to guide the negotiations on domestic regulation to ensure that such regulations are not unnecessarily burdensome to trade in e-services. Identifying certain unresolved issues of U.S.-Gambling that characterize the tension between market access and domestic regulatory autonomy, it also argues that these issues must be addressed in the negotiations on domestic regulation if a desirable balance between regulatory autonomy and progressive liberalization of global e-services markets is to be achieved.
TABLE OF CONTENTS I. INTRODUCTION II. GATS, TRADE LIBERALIZATION, AND DOMESTIC REGULATION A. Making Commitments to Liberalize Trade in Services B. Most Favored Nation, Transparency, and Other General Obligations of Members C. Limitations on Domestic Regulation that Restricts Trade: Balancing Liberalization with Regulatory Autonomy 1. The Article VI Mandate to Develop Disciplines on Qualitative Domestic Regulation 2. Article XIV Exceptions Permitting Regulations Necessary to Protect Fundamental Domestic Policy Interests 3. Articles XVI and XVII: Restrictions on Quantitative and Discriminatory Forms of Domestic Regulation i. Market Access Obligations Restrict Domestic Regulations that Place Quantitative Limits on Access to Services Markets ii. National Treatment Obligations Restrict Discriminatory Domestic Regulation III. THE U.S.-GAMBLING LITIGATION A. The Panel's Decision B. The Appellate Body's Decision IV. THE TENSION BETWEEN LIBERALIZATION AND REGULATORY AUTONOMY: INSIGHTS FROM U.S.-GAMBLING A. U.S.-Gambling: An Erosion of Domestic Regulatory Autonomy? B. The Role of Disciplines under Article VI: 4 and the Accountancy Disciplines C. Article XIV Shields Domestic Regulation that Restricts Liberalization 1. The First Tier of the Article XIV Analysis 2. The Second Tier of the Article XIV Analysis V. ENHANCING THE REGULATORY ROLE OF GATS FOR CROSS-BORDER TRADE IN E-SERVICES A. GATS and Developments in the WTO Work Program on E-Commerce B. The Need for a Strengthened Discipline on Domestic Regulation C. Going Forward Pragmatically--A Modest Proposal for Drafting Disciplines to Support E-Services VI. LIBERALIZING E-SERVICES: THE CONTINUING DEBATE OVER THE BOUNDARIES OF DOMESIC REGULATORY AUTONOMY AFTER U.S.-GAMBLING A. …