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US-Antigua Spat Rumbles On At WTO Headquarters

by Mike Godfrey,, Washington

05 March 2013

True to their word, nations of the Caribbean Community rallied behind Antigua and Barbuda, at the recent meeting with the World Trade Organization's Dispute Settlement Body (DSB), in support of the territory's calls for meaningful compensation in its dispute with the United States, which was granted by the WTO in response to that nation's legislation prohibiting the provision of overseas online gambling services.

On behalf of Antigua and Barbuda, Dominica spoke out echoing Antigua and Barbuda's "disappointment" at the lack of compliance by the United States and its failure to identify a single measure designed to implement the DSB's recommendations and rulings. Antigua and Barbuda voiced concern that, at the January 2013 DSB meeting, the US had used terms such as "theft of intellectual property" and "government-authorized piracy" in relation to the lawful and expressly-authorized use of trade remedies provided for in WTO agreements.

At the earlier January meeting, the United States criticized a compensation package, worth USD21m annually, recently granted for Antigua and Barbuda on the back of a ruling in the Caribbean territory's favor in 2004. The package is controversial as it permits Antigua and Barbuda to sell US-copyrighted merchandise without paying for rights usage. The ruling aims to enable Antigua and Barbuda to recuperate revenue the territory lost as a result of the US laws that blocked Antigua and Barbuda-based operators from offering gambling services to the American market.

Despite the ruling, due to the diminutive size of Antigua and Barbuda's economy, and the significant gambling market share Antigua and Barbuda had in the US prior to the rules, the territory claims it has been unable to obtain meaningful compensation. The United States has warned that if Antigua and Barbuda proceeds, the Caribbean territory will take a reputational hit that could severely impede its ability to attract foreign direct investment, in particular from innovative companies.

Antigua and Barbuda argued at the DSB meeting that the use of such "intemperate and dismissive language" by the US was a "fundamental challenge to the WTO and a reputational assault both on the DSB" and its decision to grant the remedial measures to Antigua and Barbuda. The Caribbean nation called on WTO members to defend the fundamental principles "to ensure that WTO rulings are applied equally by all countries despite their size."

Trinidad and Tobago (speaking on behalf of CARICOM), Haiti, Jamaica and Barbados, supported the statement made by Dominica on behalf of Antigua and Barbuda. Brazil, Cuba and China also supported Antigua and Barbuda and urged the US to engage with Antigua and Barbuda to reach an amicable resolution to the dispute.

In its response, the United States noted that Antigua and Barbuda had assured the DSB that it would notify and provide specific details about how it would implement the suspension of concessions and that Antigua and Barbuda would not encourage or allow itself to become a haven for Intellectual Property piracy.

With regard to the status of the dispute, the US did not agree with Antigua and Barbuda’s view that the US had been unwilling to negotiate in good faith. The US argued that it had followed the established, multilateral WTO process for responding to the DSB’s findings, and had tackled the offending legislation since 2007.

The US pointed out that it had offered substantial compensatory adjustments in other service areas and every member had agreed to the compensation package except Antigua and Barbuda. It added that it had also sought to offer Antigua and Barbuda elements other than new services concessions, and said it "remained open and ready to engage with Antigua and Barbuda to find a solution."

A comprehensive report in our Intelligence Report series examining the new possibilities that offshore e-commerce open up for business, and analysing the offshore jurisdictions that have led the way in offering professional e-commerce regimes for international business, with a particular focus on e-gaming, is available in the Lowtax Library at and a description of the report can be seen at
TAGS: Haiti | compliance | tax | law | intellectual property | international financial centres (IFC) | copyright | China | Jamaica | Trinidad and Tobago | offshore | agreements | gambling | legislation | offshore e-gaming | Antigua and Barbuda | Brazil | Dominica | United States | trade | Barbados | Cuba | services

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