Antigua & Barbuda To Lift US IP Protection In 2017 If US Fails To Comply With WTO Ruling

Caribbean nation Antigua & Barbuda has declared that it will exercise an option granted it by a World Trade Organization dispute settlement panel to lift protection on US intellectual property rights starting in 2017 if the US does not finally change a law blocking the island nation’s online gambling services or compensate it.

According to a WTO release circulated today, Antigua & Barbuda said the 12-year case has dragged on too long and its losses have totalled some US$ 250 million, causing harm to the country’s small economy.

A WTO panel in 2013 granted the right to the country to use cross-retaliation against the US to recover its losses. This means instead of raising tariffs on services – the area of the original dispute – and thereby harm its own economy by making services more expensive such as tourism, Antigua can go after another area that might get more of a reaction: US intellectual property rights.

Antigua & Barbuda has made strong threats to implement the retaliation in the past but has not followed through, and has not given a specific deadline. It was not clear at press time what prompted Antigua to set the end of 2016 deadline, but it could possibly be related to incoming US President Donald Trump taking office in January. Antigua & Barbuda’s statement is available here [pdf].

The US official statement was very brief and revealed nothing, stating only that it has said in the past, it remains committed to resolving the issue. However, according to the WTO, the United States argued in the 23 November Dispute Settlement Body meeting that it had put forward “a package of service concessions as compensation for removing internet gambling from the US schedule of commitments.” Antigua and Barbuda “was the only member blocking the US from completing this process,” it said. But the US seemed to be braced for Antigua to proceed, saying according to the WTO that it hoped only that it would be transparent and in line with the DSB’s authorisation.

But Antigua said the US has failed repeatedly to offer proper compensation for blocking its WTO-allowed gambling service. “Despite good faith consultations on its part, the US had not proposed settlement terms that would offset the harm,” Antigua said, as characterised by the WTO. “All WTO members, it said, should be concerned with the continued non-compliance of the US in this dispute.”

The “protracted failure” by the US to settle its non-compliance with WTO rules “has the potential to collapse confidence in the efficacy and credibility of the rules-based trading system,” Antigua said in its statement to the DSB. “Antigua and Barbuda, one of the smallest economies in the world has yet to reap any benefit from having prevailed against the United States through the rulings and recommendations of the DSB.”

The next meeting of the DSB is 16 December.

Below is the WTO press release meeting summary of this issue:

DS285: United States — Measures Affecting the Cross Border Supply of Gambling and Betting Services: Statement by Antigua and Barbuda

Antigua and Barbuda noted that 12 years had passed since the US had been found to be in violation of its obligations under the General Agreement on Trade in Services (GATS) in this dispute. Over that period Antigua, a country with a GDP of less than $1 billion, had been deprived of trade revenue worth $250 million. This had significantly retarded Antigua’s economic growth and development. Despite good faith consultations on its part, the US had not proposed settlement terms that would offset the harm. All WTO members, it said, should be concerned with the continued non-compliance of the US in this dispute.

Antigua and Barbuda said it was currently engaged in their final discussions with the US to resolve this matter. However, if a settlement was not reached before the end of 2016, Antigua would have to resort to the suspension of copyright on the sale of US intellectual property, consistent with the award by the DSB.

The United States said it remained committed to resolving this matter, but that it was disappointed that Antigua and Barbuda had characterised the US as having acted in bad faith when the US had taken a constructive approach to resolving the matter. The US said it had, on multiple occasions, attempted to settle this dispute. The US also put forward a package of service concessions as compensation for removing internet gambling from the US schedule of commitments. Antigua and Barbuda was the only member blocking the US from completing this process.

The US said it looked forward to future engagement with the country’s new government. Relating to Antigua and Barbuda’s proposed plan for suspension of benefits, the US said it would review this carefully and expected Antigua to ensure any suspension was transparent and within the DSB’s authorisation. However, the US noted that such suspension of intellectual property rights would be counter to Antigua and Barbuda’s own interests and urged it to reconsider before taking this unprecedented step.

Venezuela, Argentina, Jamaica, Dominica (on behalf of the Organisation of Eastern Caribbean States) and Cuba expressed support for Antigua and Barbuda’s statement and urged the US to come into conformity with its WTO obligations.