[Dean's World] Dave Schuler: The Jolly Roger

[notify at powerblogs.com]

Posted by Dave Schuler:
The Jolly Roger
http://www.deanesmay.com/posts/1188039496.shtml


   Why hasn't this story received much, much more attention in the
   political blogosphere? It's potentially the biggest economic story of
   the year. The [1]WTO has decided in favor of Antigua's case against
   the United States on gambling:

     The dispute stretches back to 2003, when Mr. Mendel first persuaded
     officials in Antigua and Barbuda, a tiny nation in the Caribbean
     with a population of around 70,000, to instigate a trade complaint
     against the United States, claiming its ban against Americans
     gambling over the Internet violated Antigua and Barbudaâs rights as
     a member of the W.T.O.

     [...]

     But a W.T.O. panel ruled against the United States in 2004, and its
     appellate body upheld that decision one year later. In March, the
     organization upheld that ruling for a second time and declared
     Washington out of compliance with its rules.

     That has placed the United States in a quandary, said John H.
     Jackson, a professor at Georgetown University Law Center who
     specializes in international trade law.

     Complying with the W.T.O. ruling, Professor Jackson said, would
     require Congress and the Bush administration either to reverse
     course and permit Americans to place bets online legally with
     offshore casinos or, equally unlikely, impose an across-the-board
     ban on all forms of Internet gambling â including the online
     purchase of lottery tickets, participation in Web-based pro sports
     fantasy leagues and off-track wagering on horse racing.

     But not complying with the decision presents big problems of its
     own for Washington. Thatâs because Mr. Mendel, who is claiming $3.4
     billion in damages on behalf of Antigua, has asked the trade
     organization to grant a rare form of compensation if the American
     government refuses to accept the ruling: permission for Antiguans
     to violate intellectual property laws by allowing them to
     distribute copies of American music, movie and software products,
     among others.

   Let's consider the possible outcomes of this case.
    1. The U. S. could allow Americans to place bets legally with
       offshore casinos online.
    2. The U. S. could ban all forms of Internet gambling.
    3. The U. S. could refuse to comply and the WTO could impose some
       other penalty.
    4. The U. S. could refuse to comply and the WTO could impose the
       penalty that's been requested.

   In the first instance the U. S. would abandon its rights of
   sovereignty and I think it's pretty likely that all forms of gambling
   online and otherwise would be legalized throughout the country. Can
   you imagine a situation in which international online gambling
   concerns were able to operate freely and domestic offline ones were
   banned? I can't.

   In the second instance all forms of Internet gambling would be banned.
   Besides the outcry against the move, many states have been moving
   towards putting their state lotteries online. That would be out. Would
   an implementation of this with a wink and a nod be sufficient for the
   WTO? If not, it would require government-mandated Internet censorship,
   which I suspect would cause an even bigger outcry.

   If the WTO elects the third suggestion it runs the risk of looking
   feeble.

   But it's the final alternative that's the most troubling. This goes
   far beyond allowing the 70,000 residents of Antigua to share DVD's
   legally among themselves. It would turn the tiny country, once a haven
   for Caribbean pirates, into a haven for legalized intellectual
   property piracy of all kinds. Books, video, music, software,
   pharmaceuticals, the list is endless. U. S. intellectual property, on
   which it has based a substantial portion of its future, would be dead
   not merely in Antigua but everywhere.

   I'm also trying to figure out how individual country restrictions,
   like the KSA's morals restrictions on imports (which enables them to
   prohibit the importation of bibles or alcohol, for example), could
   possibly survive.

   I suppose it's possible that the U. S. would simply stonewall i.e.
   refuse to comply, period. In that case the WTO would be dead.

   Big, big story.

   Cross-posted from [2]The Glittering Eye

References

   1. http://www.nytimes.com/2007/08/23/business/worldbusiness/23gamble.html?_r=1&em&ex=1188014400&en=45639b242bae8fd2&ei=5087%0A&oref=slogin
   2. http://theglitteringeye.com/?p=3122