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WTO relations (dispute with US over online gambling ban) - Antigua and Barbuda
Relations with the WTO (dispute with the United States over the ban on online gambling)
In 2003-2005 Antigua and Barbuda challenged American measures in the WTO that impede the cross-border supply of gambling services via the Internet (Wire Act, Travel Act, IGBA, etc.). The panel and the Appellate Body found that for a number of points the United States violated its GATS (GATS) obligations in the "recreational services" sector, where tariff-preferential obligations covering remote (Mode 1) gambling services were taken.
Legal position key
GATS obligations: The WTO considered that the United States made obligations covering the remote provision of gambling services, and a combination of federal and state bans blocked the supply of such services from Antigua.
GATS Article XIV (public morals/public order) exception: the United States referred to the protection of public morality, but the Appellate Body pointed to non-compliance with the chapeau - the measures were applied in such a way that they created arbitrary or unreasonable discrimination (including due to exceptions for some internal forms of gambling).
Dispute Timeline (Condensed)
2003-2004: request for consultation and Panel report (initially in favour of Antigua).
April 2005: The appellate body generally confirms findings of non-compliance with US GATS obligations.
2006-2007: "compliance panel" (21. 5) records the lack of full US execution.
May 2007: The United States initiates a procedure to change its GATS commitment schedule (Article XXI) to exclude online gambling from previous commitments.
December 2007: WTO arbitrator under Art. 22. 6 allows Antigua to suspend concessions worth up to $21 million annually and does so in the form of cross-TRIPS countermeasures (suspension of certain US intellectual property rights).
2013: WTO reaffirms Antigua's right to IP countermeasures; Antigua publicly discusses the launch of a US copyright infringement mechanism (pirated site) within the $21 million/year limit as pressure on negotiations.
Why the case became precedent
1. Interpretation of GATS schedules: for the first time, the coverage of remote gambling services in service obligations was analyzed in such detail. 2) Strict "cap" Art. XIV GATS: the United States has not proven the consistent application of moral exception. 3) The rarest TRIPS countermeasures: Antigua received the right to suspend US IP rights within $21 million/year - this is one of the few WTO decisions where cross-suspension of IP rights is authorized.
Positions of the parties (according to WTO documents and prof. reviews)
Antigua: US bans de facto block cross-border services from Antigua in violation of commitments; US references to "public morals" were applied selectively.
USA: insisted that the measures were justified by the protection of public morality/order and that the assessment of damage to Antigua was overstated; later went on the procedure for changing obligations (Art. XXI).
What "IP countermeasures" meant in practice
Arbitrator's decision of 21. 12. 2007 allowed Antigua to temporarily and partially suspend the protection of American copyright and related rights on its territory in the amount of up to $21 million annually - until the United States brought the measures into line or reached a settlement. In 2013, Antigua publicly discussed the launch of a platform for "legitimate" distribution of US content without remuneration to copyright holders within the limit; as follows from the press, the project was seen as an instrument of pressure on negotiations.
Settlement attempts and post-2013 status.
The United States simultaneously negotiated a change in the GATS schedule and published statements that the WTO "does not impose fines," and countermeasures are a right, not monetary compensation. For a long time, the parties were left without a final bilateral solution, and Antigua's right to suspend IP was preserved as an authorized measure.
Implications for Antigua and Barbuda and the Global Market
For Antigua: the case strengthened the image of the "pioneer" of online regulation and showed that even a small economy can achieve execution through WTO mechanisms. At the same time, the long absence of compromise with the United States limited the full recovery of lost industry income.
For the world: DS285 has become a "textbook" on crossing digital services, regulating gambling, exceptions to morality/order, and cross-suspension of IP rights as a tool to enforce WTO decisions.
The United States - Measures Affecting the Cross-Border Supply of Gambling and Betting Services (DS285) case established that the United States violated a number of GATS obligations regarding remote gambling; reference to "public morals" did not save due to defects in application; Antigua received a unique right to cross-IP countermeasures up to $21 million/year. This is a rare example of how trade law, digital economy services and IP protection overlap in one dispute - with consequences that are still felt today.
For in-depth reading: dispute page on the WTO website (DS285); arbitration award dated 21. 12. 2007; ASIL review of dispute progress and negotiations; USTR publications and academic analyses (Vanderbilt JTL, USITC).