January 30, 2013 11:00am by David Farrar

Antigua vs US

The United States has warned the tiny Caribbean nation of Antigua and Barbuda not to retaliate against US restrictions on internet gambling by suspending copyrights or patents, a move that would authorise the “theft” of intellectual property like movies and music.

“The United States has urged Antigua to consider solutions that would benefit its broader economy. However, Antigua has repeatedly stymied these negotiations with certain unrealistic demands,” Nkenge Harmon, a spokeswoman for the US Trade Representative’s office, said.

The strong statement came after Antigua said it would suspend US copyrights and patents, an unusual form of retaliation, unless the United States took its demands for compensation more seriously in a ruling Antigua won at the World Trade Organisation.

“The economy of Antigua and Barbuda has been devastated by the United States government’s long campaign to prevent American consumers from gambling on-line with offshore gaming operators,” Antigua’s Finance Minister Harold Lovell said in a statement.

“We once again ask … the United States of America to act in accordance with the WTO’s decisions in this matter.”

Antigua, a former British colony with few natural resources, has knocked heads with the United States since the late 1990s, when it began building an Internet gambling industry to replace jobs in its declining tourist industry.

The gambling sector at its height employed more than 4000 people and was worth more than US$3.4 billion to the country’s economy, but it has shrunk to less than 500 people because of US restrictions, the Antiguan government says.

The United States said it never intended as part of its WTO commitments to allow foreign companies to offer online gambling services. In 2007, it began a formal WTO procedure to withdraw the gambling concession and reached a compensation package with all WTO members, except Antigua.

Antigua argued in a case first brought to the WTO in 2003 that US laws barring the placing of bets across states lines by electronic means violated global trade rules.

It won a partial victory in 2005 when the WTO ruled a US law allowing only domestic companies to provide online horse-race gambling services discriminated against foreign companies.

When the United States failed to change the law, the WTO in 2007 gave Antigua the right to retaliate by waiving intellectual property rights protections on some US$21 million worth of US goods annually, which was far less than the US$3.44 billion the island country requested.

The key thing here is that Antigua won in the WTO. It is hugely disappointing that the US broke the commitments it agreed to, when it joined the WTO. Australia lost the NZ case on apples access, and they have done the right thing and now allowed access. The US should have accepted the WTO ruling. By choosing not to, they owe Antigua compensation.

If the US wants countries to sign trade agreements with them, especially ones with intellectual property requirements in them, then they need to show that they will honour the commitments they agree to. Otherwise there isn’t much incentive for other countries to conclude an agreement.