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 Posted: Thu May 26, 2005 10:35 am Post subject: Antigua v. U.S. at the WTO - Victory! - The Appeal - Part I |
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WELCOME!
Antigua v. U.S. at the the World Trade Organization (WTO) - Victory! - The Appeal - Part I
Round two: Antigua won again!
(For links to key WTO texts and articles, click here).
Ever since April 7/05, when the United States - Measures Affecting the Cross-Border Supply of Gambling and Betting Services Report of the Appellate Body (the appeal) was released, it's been more than a little confusing, sifting through the news stories (3,420 search results at Google April 17/05) and press releases like
this one,
which focus instead correctly, in our view, on recommendations still to come from the panel regarding the U.S. obligation to bring its measures in line with the infamous General Agreement on Trade in Services (GATS). Click here for the best ongoing coverage of the decision online.
For more on the nomenclature and procedures peculiar to the World Trade Organization (WTO), scroll to The case has been decided: what next? at the WTO website here. Consider the following excerpt:
| Quote: | If the country that is the target of the complaint loses, it must follow the recommendations of the panel report or the appeals report. It must state its intention to do so at a Dispute Settlement Body meeting held within 30 days of the report’s adoption. If complying with the recommendation immediately proves impractical, the member will be given a “reasonable period of time” to do so. If it fails to act within this period, it has to enter into negotiations with the complaining country (or countries) in order to determine mutually-acceptable compensation — for instance, tariff reductions in areas of particular interest to the complaining side.
If after 20 days, no satisfactory compensation is agreed, the complaining side may ask the Dispute Settlement Body for permission to impose limited trade sanctions (“suspend concessions or obligations”) against the other side. The Dispute Settlement Body must grant this authorization within 30 days of the expiry of the “reasonable period of time” unless there is a consensus against the request.
In principle, the sanctions should be imposed in the same sector as the dispute. If this is not practical or if it would not be effective, the sanctions can be imposed in a different sector of the same agreement. In turn, if this is not effective or practicable and if the circumstances are serious enough, the action can be taken under another agreement. The objective is to minimize the chances of actions spilling over into unrelated sectors while at the same time allowing the actions to be effective.
In any case, the Dispute Settlement Body monitors how adopted rulings are implemented. Any outstanding case remains on its agenda until the issue is resolved.
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Why are both sides claiming victory?
To clarify Antigua's victory, we refer to the excellent Summary Analysis of the Report of the WTO Appellate Body in the Dispute United States - Measures Affecting the Cross-Border Supply of Gambling and Betting Services by Antigua's lead counsel, Mark Mendel, whose partner, Bob Blumenfeld, very graciously forwarded us a copy. Click here to request one.
| Quote: | | Note: After attending the excellent legal panel June 15/05 at GIGSE 05', we spoke with Mr. Mendel, who agreed to make his summary available to our visitors. Click here for a pdf. For more information about the law firm, click here. |
| Quote: | | Unfortunately, the Report by the Appellate Body lacks the clarity of the Panel Report, which has led the United States, certain members of the press and a number of gambling experts and commentators to conclude that either the United States "won" the Dispute on appeal or the Appellate Body had determined that all the United States had to do was "adjust" or "tweak" one of its laws to bring itself into compliance with the GATS. As will be explained below, the United States, the press and the experts are wrong. Despite the occasionally ambiguous language contained in the Report, the end result is the same as the result of the Panel Report -- the United States was found by the Appellate Body to be in violation of its obligations under the GATS. (Mendel, Introduction p. 1]) |
Indeed. Nor should the win have come as much of a surprise. When we searched the website of the Washington-based National Conference of State Legislatures (NCSL) following an April 15-16/05 seminar on international trade, we found this excellent slide presentation on the WTO gambling decision/appeal and possible reactions prepared by Prof. Robert Stumberg and Sean Hewens of the Georgetown University Law Center dated Jan. 21/05. Note the carefully tracked percentages of WTO victories and defeats.
We also found this letter of Mar. 30/05 to ambassador Peter Allgeier, acting U.S. Trade Representative, from Sheryl Allen (R-Utah), chair of NCSL's Standing Committee on Economic Development, Trade & Cultural Affairs, regarding the WTO gambling decision. Here are a few key paragraphs:
| Quote: | Despite USTR’s efforts, this case highlights the continuing problem of inadequate consultation with state governments during the trade negotiation process. The legislative and regulatory authority over gambling varies extensively at the sub-federal level but is solidly rooted in the constitutional jurisdiction of state governments. Accordingly, to comply with the WTO panel decision, if the anticipated appellate decision does not favor the United States, the U.S. federal government would not only have to change its own laws but would have to override state authority to regulate gambling. The threat of preemption is very real in this case and state governments should have been consulted before specific commitments to “gambling and betting services” were originally made.
State legislatures have grappled with the challenges of balancing the economic development, tourism, and tax revenue prospects of gambling industries against community welfare and public morals concerns for years. This is an on-going debate and states have chosen different solutions, the sheer variety of which is the very basis for the Antigua complaint. NCSL and the Economic Development, Trade & Cultural Affairs Committee regularly publish articles and issue briefs on the gaming issue and hold hearings to examine the latest approaches in the states. USTR would do well to ensure that this expertise and these varied authoritative perspectives are considered as gaming and gambling issues are negotiated in Geneva.
USTR has indicated that if the United States loses the gambling case on appeal, we are unlikely to comply with the decision, choosing instead to alter our GATS schedule so as to deny countries like Antigua the ability to provide Internet gambling services to U.S. consumers. Such a negotiation process under the Article XXI authority of GATS will not be easy, however, as the value of the Internet gambling industry (estimated at $7.5 billion in 2004) might well require sizable trade concessions in other service areas.
It is also worth noting that USTR’s proposed solution of eliminating U.S. commitments to Internet gambling does not address the potential for similar WTO challenges to the bricks-and-mortar casino industry within the United States. Additionally, the threat would remain that individual gambling companies located in foreign jurisdictions could challenge U.S. restrictions via the investor-state provisions contained in NAFTA, CAFTA and other trade agreements. (emphasis ours)
The WTO Appellate Body is expected to reach a decision in the gambling case no later than April 7, 2005. Although the Appellate Body technically has the power to completely reverse the lower panel’s holding, such an occurrence has come about in less than five per cent of all WTO appeals. More likely than not, the threat of international challenges to U.S. gambling restrictions will remain following the release of the Appellate Body’s decision. NCSL seeks a commitment from USTR for meaningful consultation with state legislatures both in the resolution of the gambling dispute and in future negotiations pertaining to international trade agreements. Such a written commitment would go a long way to assuaging the growing concern among state legislators that trade agreements do indeed pose a viable and palpable threat to state authority and sovereignty as is so vividly evidenced in this Antigua gambling case. |
And so 'tweaking' the Interstate Horseracing Act (IHA) wouldn't satisfy U.S. trade obligations?
Again, no!
| Quote: | | It's important to realize that the "measures...inconsistent" with the GATS are the three federal laws at issue - the Wire Act, the Travel Act and the Illegal Gambling Business Act. The measures do not include the IHA. It simply found that, based upon the IHA itself, the United States had not proved that the three federal measures were not applied by it in a discriminatory fashion. So the Antiguan win holds, despite the finding in favor of the United States on the first prong of the Article XIV defence. (Mendel, (1) The Application of the Chapeau, p. 6) |
To fully appreciate the stellar quality of Antigua's victory, consider this excerpt from Shaffer's text, Defending Interests (see our WTO bookstore here) from the chapter entitled, The United States's Initial Partnership Edge in Opening Foreign Markets, which describes the history and context of America's, shall we say, vigorous trade initiatives:
| Quote: | Defending Interests
Public-Private Partnerships
in WTO Litigation
By Gregory C. Shaffer
| Quote: | The United States was the first country under the GATT trading system to create a legalistic procedure through which private firms could petition their government to challenge foreign trade barriers. Much has been written on this proedure, known as Section 301, from a policy perspective, particularly on its coercive use. The scholarly debate has centered largely on whether the procedure's deployment has promoted or distorted trade liberalization goals. Some contend that Section 301 is primarily a mechanism for private interests to harness U.S. unilateral power and replace "economic efficiency with political clout as the determinate of exports in the world trading system." Others counter that Section 301 "can be a useful tool" for ensuring countries' compliance with trade commitments and for "encouraging additional liberalization in areas not covered by the WTO rules. " (Footnotes omitted, p. 19)
...Under the current WTO system, the relation of U.S. private interests and public authorities is neither, as [Sylvia] Ostry [former Canadian ambassador during the Uruguay Round trade negotiations] suggests, that of lawyer-client, nor, as some trade liberals desire, that of firms acting independently of government. Rather, as a result of the system's intergovernmental structure, firms must work with USTR as a partner if they wish to successfully challenge trade barriers under WTO rules. The separate, reciprocal, overlapping interests of the USTR and the private sector give rise to ad hoc, hybrid public-private networks. The USTR depends on private sector lobbying in order to obtain support within both Congress and the administration for the USTR's policy goals and for the USTR's practical needs, from the granting of "fast-track" negotiating authority, or the ratification of new trade agreements, to approving the WTO accession of China or Russia, or the allocation of budgetary funds...
In return, the Office of the United States Trade Representative aggressively defends industry interests, be it in multilateral or bilateral trade negotiations, WTO accession negotiations, or WTO litigation or settlement discussions. The USTR also provides exporting industries with a voice in interagency debates so that the president considers their desires when balancing multiple U.S. interests. Responding to U.S. efforts to protect U.S. intellectual property rights, Eric Smith, president of the International Intellectual Property Alliance, noted, "The U.S. government put enormous resources into the effort to convice Ukaraine to take action. We thank them for their support." When the process is successful, the president and other officials at the highest level promote issues on industry's behalf, as President Clinton did when he defended industry interests concerning pharmaceutical patent protection during his 1999 visit with Nelson Mandela in South Africa. (Footnotes omitted, pgs. 25-27) |
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See also 'direct effect' of WTO law on domestic jurisdictions here.
For more on the dubious effects of the U.S. public-private partnership, scroll down to the documentary documentary film, Life and Debt here. See also The WTO's Special Burden on Less Developed Countries by Michael J. Finger in Vol. 19, No. 3 (Winter 2000) of the Cato Journal.
So what has the Appellate Body's Report established exactly?
| Quote: | In the Dispute, the Appellate Body established three crucial rules of law that are of great importance going forward:
. The United States made full and unrestricted commitments to the cross-border provision of gambling and betting services in its GATS schedule;
. A United States law that has the effect of prohibiting the cross-border supply of gambling and betting services violates Article XVI of the GATS;
. The United States may not discriminate against foreign service providers in the provision of remote gambling services.
If the United States wants to follow the rules laid out by the decision, it will have to do one of two things -- grant Antiguan service providers market access or prohibit all remote gambling within the United States in addition to remote gambling provided by other countries. (Mendel, (2) Important Rules of Law, p. 6-7). |
See also the excellent summary conclusions at the European Journal of International Law website by Fletcher School of Law and Diplomacy Professor Joel P. Trachtman. Here is an excerpt from the third section, Analysis of the Appellate Body Report:
| Quote: | There was little question but that the U.S. federal laws were motivated by public morals, as defined. However, the question was whether these measures were necessary. The panel had found that the U.S. had failed to demonstrate necessity. As one component in a balancing test, the panel found that "In rejecting Antigua's invitation to engage in bilateral or multilateral consultations and/or negotiations, the United States failed to pursue in good faith a course of action that could have been used by it to explore the possibility of finding a reasonably available WTO-consistent alternative." The first component of the analysis, referenced in the quoted language above, is the requirement that there be no reasonably available less WTO-inconsistent alternative measure that achieves the respondent state’s desired level of protection. Here, Antigua argued, and the panel accepted, that consultations with Antigua would have yielded such a reasonably available alternatives. The four-part balancing test also looked at the importance of the interest protected by the measure, the contribution of the measure to achieving this interest, and the degree of trade restrictiveness of the measure.
Importantly, the Appellate Body clarified that the respondent is not responsible to show that there are no reasonably available alternatives, but only to put forward information relevant to the balancing test. The respondent is not required to explore and exhaust all conceivable alternative measures. However, if the complaining party raises an alternative, the respondent must show why that alternative is not reasonably available. In this case, the panel had found that the U.S. had failed to show the necessity of its measure because it had not explored and exhausted alternatives by responding to Antigua’s offer of consultations. In this connection, the present case is a continuation of the jurisprudence of the Shrimp case.
The Appellate Body therefore found that the U.S. measures were “necessary” within the meaning of Article XIV(a). It then turned to analyze whether the U.S. measures complied with the chapeau of Article XIV. Here, the panel had found that the U.S. had failed to show “that it applies its prohibition on the remote supply of these services in a consistent manner as between those supplied domestically and those that are supplied from other Members.” The chapeau requires that there be no arbitrary or unjustifiable discrimination. The Appellate Body rejected the panel’s finding that inconclusive evidence of differential enforcement was evidence of discrimination. However, it upheld the panel’s finding of discrimination relating “solely to the possibility that the [Interstate Horseracing Act] exempts only domestic suppliers of remote betting services for horse racing from the prohibitions in the Wire Act, the Travel Act, and the IGBA.” Thus, the U.S. failed to show “that the prohibitions embodied in these measures are applied to both foreign and domestic service suppliers of remote betting services for horse racing.” (footnotes omitted) |
We look forward to further analysis of the dispute at this site along with some lively discussion (we hope) as the U.S. compliance deadline of April, 2006 looms larger. Visitors with comments are invited to post them at the EIJL Discussion forum. We'll follow those links and report our findings. We also hope to review the new text edited by Prof. Trachtman following its Dec. 15/05 release. Please check back for updates.
The International Economic Law Revolution
and the Right to Regulate
Hardcover
Edited by Joel P. Trachtman
What can you tell me about the compensation scheme under the WTO?
In addition to the Lawrence piece listed here, see Financial Compensation in the WTO, Improving the Remedies of WTO Dispute Settlement by Marco Bronckers and Naboth van den Broek in a recent 2005 issue of the Journal of International Economic Law from which the following precis is taken:
| Quote: | | The current system of remedies in the WTO provides Members with a choice between trade compensation or retaliation. There is a problem in that trade compensation is only possible with the consent of the non-complying country and thus often remains theoretical, while retaliation has the disadvantage of requiring the complaining Member to ‘shoot itself in the foot’ by restricting imports and thus hurting its own industrial users, importers and consumers. Such retaliatory restrictions also hurt innocent bystanders abroad: private parties who are not involved in a dispute lose their export markets. As importantly, the current system does not provide for effective reparation of damages suffered by the WTO Member and private parties concerned. These problems are even more urgent for developing countries. Many of them cannot effectively retaliate: their economies are too small to make an impression on the infringing country, and the negative effects of such countermeasures would be felt disproportionately by their own economies and businesses. Introducing financial compensation could be a solution. Financial compensation does not restrict trade, helps to compensate injured Members and industries, avoids hurting innocent bystanders, and can contribute to more effective compliance. In addition to analysing the problems with current remedies and the pros and cons of financial compensation, this article outlines what financial compensation in the WTO could look like. |
What is the U.S. currently doing to meet its obligations toward Antigua?
Not enough by many accounts. See the May 19/05 news story, Antiguan Minister Says U.S. Rule Change Needed to Comply With WTO Gambling Ruling by Daniel Pruzin at Sports911.com as well as Antigua demands full US compliance in WTO case dated May 22/05 at General Casino News and, most recently, Plan could cripple Net horse betting, No track exemptions in Kyl's Internet gambling proposal by William Spain in MarketWatch May 24/05.
We'll continue to monitor U.S. implementation of the panel's recommendations as well as any similar actions by other WTO Members. Please check back for updates.
Are there conferences or seminars where I might learn more about international trade agreements and their effect?
Gosh, yes. A conference on regional trade agreements was scheduled in Edinburgh, Scotland May 27-28/05. Click here for details. There was a more general review of international trade at the British Institute of International and Comparative Law May 17-18. Click here for more. See also the excellent Consumer Unity & Trust Society (CUTS) website based in India for coverage throughout Asia.
Who, finally, walks away with the highly coveted PokerPulse Oscar Wilde Award?
| Quote: | | I was working on the proof of one of my poems all the morning, and took out a comma. In the afternoon I put it back again. -- Oscar Wilde from The Quotations Page |
No contest. Despite the many twisted, hair-curling double-negatives that make WTO law such compelling reading, the award goes to the Appellate Body author of para. 245 at p. 82, about half-way through the Report, which states in earnest:
| Quote: | | Ultimately, we are not persuaded that the key to the interpretation of this particular provision is to be found in a careful dissection of the use of commas within its grammatical structure. Regardless of which language version is analyzed, and of the implications of comma placement (or lack thereof), all three language versions are grammatically ambiguous. All three can arguably be read as identifying two limitations on the total number of service operations or on the total quantity of service output. All three can also arguably be read as identifying three limitations on the total number of service operations or on the total quantity of service output. The mere presence or absence of a comma in Article XVI:2(c) is not determinative of the issue before us. |
Of course not.
Link to this entry
http://www.pokerpulse.com/legal/viewtopic.php?p=151#151
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legal
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| Posted: Fri Jul 22, 2005 10:53 am Post subject: |
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Antigua requests arbitration to determine U.S. compliance schedule:
For the latest update on the cross-border betting dispute between Antigua and the U.S., go to DISPUTE SETTLEMENT: THE DISPUTES Dispute rulings, by country at the WTO website. Scroll down to 'Antigua, Barbuda,' where the most recent document we were able to click on was Article 21.3c. Here is the html preview:
| Quote: | Request from Antigua and Barbuda for Arbitration under Article 21.3(c) of the DSU. The following communication, dated 6 June 2005, from the delegation of Antigua and Barbuda to the Chairman of the Dispute Settlement Body, is circulated at the request of that delegation. On 20 April 2005 , the Dispute Settlement Body ( the "DSB") of the World Trade Organization (the " WTO ") adopted the Appellate Body Report and the Panel Report in United States - Measures Affecting the Cross - Border Supply of Gambling and Betting Services. At the DSB meeting of 19 May 2005 , the United States announced that it would require a reasonable period of time to comply with the recommendations and rulings of the DSB. Unfortunately, Antigua and Barbuda and the United States have been unable to agree on a reasonable period of time.
As a result, Antigua and Barbuda requests that the reasonable period of time be determined through binding arbitration pursuant to Article 21.3 (c) of the WTO's Understanding on Rules and Procedures Governing the Settlement of Disputes (the "DSU") within 90 days after the adoption of the recommendations and rulings. According to our calculations, this date would be 19 July 2005.
Antigua and Barbuda remains ready to enter into consultations with the United States with a view to reaching agreement on an arbitrator within the ten day period provided for in footnote 12 to Article 21.3 of the DSU. (emphasis ours) |
We were unable to access either of two subsequent reports, the Compliance panel report (Article 21.5) or the Arbitration report on the amount of sanctions (Article 22.6), when we visited the website July 22/05. Please check back soon for updates.
For more on dispute settlement Appellate procedures generally, click on this excellent overview.
Unbelievably, the U.S. is still insisting it won:
We note with interest that the cross-border betting and gambling dispute is listed as one of 11 occasions when "U.S. won on core issue(s)" as the responding party. See the chart at the United States Trade Representative (USTR) website here. View the 235 hits we got when we searched the terms, 'cross-border gambling Antigua' at USTR. Please check back soon for updates.
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legal
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| Posted: Thu Aug 11, 2005 1:24 pm Post subject: |
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U.S. finally concedes hoist on its own petard
Key House committees get a primer on international trade law:
Securing American Sovereignty: A Review of the United States’ Relationship with the WTO is a link to the illuminating testimony by Georgetown University law professor Robert Stumberg given July 15/05 before the U.S. Senate Committee on Homeland Security and Governmental Affairs Subcommittee on Federal Financial Management, Government Information, and International Security, chaired by Sen. Tom Coburn.
The good professor provides an admirably succinct overview of the domestic effect of Antigua's win, at the same time correcting some of USTR's misstatements regarding the dispute. Here's a sample:
| Quote: | 3. USTR sovereignty assurances are not attentive to state and local concerns. In May 2005, the U.S. Trade Representative (USTR) recently consulted with state officials with respect to the revised U.S. offer of trade commitments under the GATS. USTR provided the following assurances that GATS would not threaten state sovereignty.
a. “Like any trade agreement, GATS simply says that if a state chooses to allow private competition in services, it should give U.S. and foreign firms a chance to compete on an equal footing.” GATS is not like “any” trade agreement. It is unique in its application of Market Access rules that prohibit even nondiscriminatory quantitative limits. For example, in the U.S.-Internet Gambling case, the WTO’s Appellate Body held that the Market Access rule prohibits a ban on domestically illegal trade (e.g., Internet gambling) because a ban is a “zero quota.” In its brief, USTR stated that this interpretation would constrain government power to regulate in a nondiscriminatory manner.
b. “Trade agreements such as the GATS do not automatically preempt, invalidate or overturn state laws.” This is literally true, but only in the sense that the federal government must always ask a court to preempt state law. In other words, preemption is never automatic, it is manual. The WTO implementing legislation specifically authorizes the Executive Branch to sue states in federal court to enforce the GATS, and sets the burden of proof to be that a state or local law “is inconsistent with the agreement in question.” (emphasis added) The way in which preemption under trade agreements differs from domestic preemption is that Congress denied standing under a trade agreement to private parties. In addition to the threat of preemption, federal enforcement options include withholding federal funds, approval of state plans for spending federal funds, or other kinds of federal permission that a state may need.
c. “Nothing in any trade agreement prevents the United States or any state from enacting, modifying, or fully enforcing domestic laws.” Again, this is literally true. However: (1) It is also true that another country may challenge federal or state laws under GATS, and if successful, may impose trade sanctions in the form of punitive tariffs on U.S. goods or services that have nothing to do with the dispute. WTO sanctions have the economic effect of a secondary or tertiary boycott. These sanctions are designed to have the maximum deterrent effect. (2) It is also true that the federal government has a legal obligation under GATS to enforce U.S. trade commitments that apply to cities and states.
d. “GATS does not require deregulation or privatization of any public service.” Again, this is literally true in the sense that countries are free to not make GATS commitments, and the WTO has yet to implement the general GATS rules on domestic regulation. However, once the United States makes a commitment in a service sector (e.g., gambling or health facilities), GATS provides that the United States “shall not maintain or adopt” limits on the number of service suppliers, service operations, employees or types of legal entity. In domestic policy debates regarding electricity, health care or financial services, removal of these limits are typically described as “deregulation.” (footnotes omitted) |
See also State and Local Governance at Public Citizen's Global Trade Watch link and WTO Threat to State and Local Sovereignty from which the following is excerpted:
| Quote: | When a state policy loses in the WTO, the federal government is obliged to take all constitutionally available steps to force the state’s compliance, such as enacting preemptive legislation, suing state or local governments, or withholding federal funding until the state changes or eliminates nonconforming laws. The law must be eliminated or changed, or permanent trade sanctions are put into place. (emphasis ours) Even if the Bush administration chooses to accept trade sanctions from Antigua rather than force the compliance of states with regard to this particular ruling, such a strategy is untenable in the long term. In future cases resulting in more substantial sanctions, or in situations where the administration is less supportive of a particular state law, the federal government could easily resort to more coercive tactics. The status quo for state and local governments vis-à-vis the WTO is especially problematic, as U.S. negotiators negotiate agreements with scant consultation with state and local officials. While states find themselves bound to many aspects of WTO agreements, currently there is no adequate mechanism in state or federal law to systematically notify appropriate state officials when agreements containing terms affecting state authority are under negotiation, much less to obtain the consent of state legislatures before federal negotiators offer to permanently bind state laws.
The tribunal found that the three federal laws in question violated the WTO’s 1994 General Agreement on Trade in Services (GATS). This agreement sets international rules constraining how governments can regulate the services covered by the agreement, regardless of whether the services are provided by foreign companies operating within a country or provided across borders. These rules place a series of constraints on domestic regulation of services in an effort to guarantee market access for foreign service corporations. (emphasis ours)
...In comments about the Antigua gambling case, officials from the Office of U.S. Trade Representative (USTR) have stated the GATS agreement safeguards federal, state and local governments’ “right to regulate” in ways “necessary to protect public morals or to maintain public order.” The final WTO tribunal’s ruling contradicts that claim on several grounds and exposes an array of other gambling regulations to future WTO challenges. (emphasis ours) |
Even Republican Sen. Orrin Hatch representing Utah has grudgingly accepted a U.S. defeat. See the news release, Free trade must maintain state sovereignty, dated June 30/05, which states:
| Quote: | | The issue of maintaining sovereignty was highlighted by a recent World Trade Organization (WTO) Dispute Resolution body ruling on Internet gambling. The ruling stated that the United States cannot block other countries from offering Internet gambling to U.S. residents, even if they live in states such as Utah where gambling is illegal. This is outrageous. We absolutely cannot enter into agreements where our laws are overturned by outsiders. |
| Quote: | The Economist
Magazine Subscription
Economist Online
| Quote: | The immediate future looks bright for those other gamblers—investors—who asked to be dealt in when PartyGaming went public. The firm’s IPO was subscribed three times over, and the shares rose by 11% on the first day of trading. But controversy clouded the run-up to the flotation. The firm runs an unforeseeable legal risk as some 90% of its revenues come from punters in America, where the legality of online gambling is questionable. PartyGaming has admitted that the Justice Department considers online gambling illegal, though a recent World Trade Organisation ruling may force America to loosen the rules.
The legal risk may be overstated. It is not clear what America can do to a company that is based in Gibraltar, listed in London and has no offices or servers in America. (Note: Visit our Canadian forum for more on disturbing U.S. trends in the seizure and forfeiture of foreign assets and extradition even when the alleged offences take place outside the U.S.) But Jon Kyl, a Republican senator, is aiming to introduce legislation that would outlaw credit-card payments to offshore gaming firms. American-based online-payments services, such as PayPal, have already refused to handle gambling funds, and online gamblers in Louisiana face fines or prison. If American legislators can find a way to deter American gamblers, it would clobber the revenues of PartyGaming and its competitors. But most analysts think any attempt to stamp out the business completely would prove futile.
In one way, America’s ban on internet gambling has been good for PartyGaming and other offshore gambling sites. As punters revealed a taste for going online, America’s big gambling companies, such as MGM Mirage, Harrah’s Entertainment and Caesar’s Entertainment, were deterred by the legal problems from offering web-based services and cashing in on their well-known brands. This left the way clear for foreign firms to clean up. (From A blue-chip investment? dated June 27/05 at the econonomist.com) |
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What can you tell me about the latest Kyl anti-gaming legislation?
In view of post-Antigua analysis, we were somewhat puzzled by the story dated May 27/05 in Winner Online.com, Plan Could Cripple Net Horse Betting, which contained the following observations:
| Quote: | To comply with the WTO ruling and live up to its trade agreements, the U.S must amend existing laws, said Anthony Cabot, a lawyer with Lewis and Roca in Las Vegas, who represents some Internet gambling clients.
"The new Kyl bill is the most likely vehicle," he said. "It can effectively shut down any interstate betting that would go through a financial transaction service provider. |
...Huh?
Those who nevertheless anticipate the bill's passage may view its lengthy string of failures in depth at the legislative history links listed at the Traditional Values Coalition.
| Quote: | Note: We weren't surprised to find the Sept. 15/05 report, US Senate turns aside Web gambling ban for now, online at Reuters, describing still another defeat of the senator's latest amendment. Here are the top two paragraphs:
| Quote: | The U.S. Senate on Thursday turned aside an attempt to restrict Internet gambling in a procedural move, but Sen. Jon Kyl vowed he would try again and said he expected the legislation would become law eventually.
The Arizona Republican tried to attach language restricting Internet gambling to an annual spending bill that must be passed this year, but an unnamed Democrat objected to attaching an unrelated matter to the spending measure under consideration. |
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What can you tell me about Internet gambling under CAFTA?
See CAFTA opens U.S. market to Internet gambling.
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| Posted: Thu Sep 15, 2005 12:11 pm Post subject: |
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Arbitrator sets deadline for U.S. compliance
U.S. to implement panel recommendations by April 3, 2006:
Arbitrator Claus-Dieter Ehlermann (see above), appointed by the WTO director-general this summer at the request of Antigua when the parties reached a stalemate, has set April 3/06 as the deadline for U.S. compliance with panel recommendations following the Appellate Body's Report last April in favor of Antigua (above).
See the full 25-page arbitration ruling of July 28/05. The purpose of the award is not to modify in any way the Dispute Settlement Body (DSB) panel recommendations but to come up with a reasonable period within which the Member in breach must comply. Here are a few highlights to give you some idea of the challenge facing the U.S.:
| Quote: | 45. The United States raises, as a "particular circumstance" relevant to my determination, the complexity of the legislation that will be necessary in order to implement the recommendations and rulings of the DSB in this case. The United States contrasts the complexity of the task of eliminating discrimination in this case with the relative simplicity involved in amending the statutory term of patent protection in Canada - Patent Term.
46. I agree with the United States that the legislative task faced by its Congress in this dispute is more complex than the one confronted by the Canadian Parliament in Canada - Patent Term. I attach some significance to the fact that, as the United States explained at the oral hearing, the field of internet gambling is one that is highly regulated in the United States. A myriad of interconnected and overlapping laws apply to these activities, including state and federal laws, and criminal and civil statutes. For this reason, a careful examination of how proposed legislation will impact the existing regulatory regime will be a necessary part of the process of adopting implimenting legislation in this dispute.
47. ...to the extent that the United States may consider authorizing any form of internet gambling or wagering, this will increase the complexity of any legislative solution. The more such activities are authorized, the greater lengths the legislator will have to go to in order to ensure that sufficient safeguards are in place to make the system consistent with, and acceptable under, prevailing standards of public morals and public order. This is, in my view, separate from the question of contentiousness. However, the United States has not, in this proceeding explained in any precise manner how it intends to implement the recommendations and rulings of the DSB. The few indications that it has given suggest that it is leaning more in the direction of "confirming" or "clarifying" the prohibitions on the remote supply of gambling and betting services, rather than in the direction of authorizing, even in part, the supply of such services...
48. The United States also submits that I should take account of the fact that several previous Congresses have considered bills related to internet gambling, but that none of these bills has passed...(see above) (From paras. 45 through 48, emphasis added) |
Link to this entry
http://www.pokerpulse.com/legal/viewtopic.php?p=173#173
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| Posted: Fri Nov 11, 2005 4:52 pm Post subject: |
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Are other WTO member nations planning similar actions against the U.S.?
Maybe. See the excellent slide presentation of Jan. 21/05, The WTO's Internet Gambling Decision, Potential State Responses, by Robert Stumberg and Sean Hewens of the Georgetown University Law Center and Peter Riggs of the Forum on Democracy and Trade.
Slide 19 of 25 states that if the U.S. chooses to do nothing in response to panel recommendations, Doing nothing could simply lead to the next claim by other nations (see slide 21). Slide 21 then lists WTO members with a stake in Internet gambling:
| Quote: | Antigua 428 sites 27% (approximate)
Costa Rica 366 sites 23%
Canada 321 sites 21%
The Netherlands
Antilles 278 sites 17%
UK 79 sites 5%
Belize 45 sites 3%
Dominican Rep. 25 sites 1.6%
Other (not all WTO) 50 sites 3.5% |
See also testimony by Lori Wallach, director of Public Citizen's Global Trade Watch division, before the House Ways and Means Committe May 17/05:
| Quote: | | U.S. domestic policies from gambling regulations to tax policies have been repeatedly ruled against by run-away WTO panels. The recent WTO gambling case is the most recent demonstration that when expansive ‘trade’ rules come up against public interest laws before WTO tribunals, nondiscriminatory, democratically-created domestic policies can be undercut. Among the WTO panel’s outlandish decisions in that case, where the Caribbean nation of Antigua challenged various U.S. state and federal anti-gambling laws, were the following: The entire U.S. gambling sector is covered by provisions within the WTO’s General Agreement on Trade in Services (GATS) irrespective of the intention of U.S. trade negotiators. As such, the ability of the U.S. government to regulate not only Internet but ALL forms of gambling at the federal, state and local level is limited by the rules of GATS. (emphasis added) The panel also announced that GATS rules forbidding numerical restrictions on covered services means that a ban on an activity in a GATS-covered sector, even if applied to domestic and foreign service providers alike, is a “zero quota” and thus a violation of GATS rules – with broad implications for bans on an expansive range of pernicious activity. These two elements of the ruling mean that the U.S. is exposed to future WTO challenges in light of limits on gambling common in many states, as well as assorted exclusive supplier arrangements, such as with Indian tribes, and state monopoly gaming, such as the 43 U.S. states and territories which use lotteries to raise revenues. (emphasis added) Thus, the WTO panel, in this case, interpreted that a GATS exception for “laws necessary to protect public morals,” could be applied if the U.S. eliminates discrepancies between the way in which it regulates domestic and foreign providers, including through the U.S. Interstate Horseracing Act, which waives the three laws challenged by Antigua for certain domestic firms. A week later, a WTO tribunal issued a ruling on the same necessity text within the GATS exceptions clause in a case having to do with the Dominican Republic’s alcohol distribution system which explicitly contradicted the inclusive reading in the gambling case. At a minimum this conflict in rulings shows that the lenient decision in the gambling case with regards to the necessity test is not a settled WTO standard. (emphasis added) Some WTO observers wonder if the sudden switch back to the past, narrow ruling on the necessary test points to the political nature of the WTO dispute process and an attempt to avoid an explosive WTO ruling just before the U.S. Congress takes up the WTO 10-year review. |
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| Posted: Wed Nov 30, 2005 4:57 pm Post subject: |
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So, again, what responses might the U.S. consider in response to Antigua?
After trawling the deep waters of the Dept. of Justice website, we found the following memo of Nov. 22/94 from this guy's watch, to Ambassador Michael Kantor, United States Trade Representative, from Assistant Attorney General Walter Dellinger, entitled, Whether Uruguay Round Agreements Required Ratification As a Treaty. The memo was prepared in reply to criticisms that WTO agreements usurp state sovereignty in a manner that is unconstitutional. Here is an excerpt:
| Quote: | | Moreover, it is misleading to suggest that the WTO procedures of the Uruguay Round Agreements place State law "at the mercy of the Executive Branch and the Trade Representative." As Professor (Laurence) Tribe himself explains, even if the Executive Branch decides to bring an action against a State for the purpose of having a State law declared invalid for inconsistency with the Uruguay Round Agreements, the implementing legislation explicitly precludes the WTO panel's (or Appellate Body's) report from being considered "binding or otherwise accorded deference" by the court that hears the case. (emphasis added) Thus, the State law cannot be declared invalid by the Executive Branch acting unilaterally, even if the Executive is armed with a WTO report that has found the State law GATT-illegal; rather, the independent action of another branch of the government - the courts - is required. (Footnotes omitted) |
Further down, quoting the decisions in Public Citizen v. Kantor (view DOJ summary), the memo explains:
| Quote: | Neither the WTO, nor any dispute settlement panels, will have the authority to enter injunctions or impose monetary sanctions against member countries. Nor will they be able to order any member country that has a federal system to change its component governments' laws. While a WTO dispute settlement may opine on whether a law is inconsistent with a member's obligations under the Uruguay Round Agreements, it is up to the parties to decide how to resolve the situation. The complaining country may suspend reciprocal trade concessions if alternative forms of settlement -- e.g., compensation in the form of additional trade concessions, or a change in the defending country's domestic law - are not made. The suspension of trade concessions by a complaining country is likely to mean a temporary increase in the tariffs it imposes on the defending country's goods. No suspension of trade concessions can exceed the amount of the trade injury. Because our foreign trading partners would be able to increase tariffs on American goods even more easily in the absence of a trade agreement, it is hard to see how the attempt in the Uruguay Round Agreements to resolve trade disputes between member countries and to prevent the unilateral imposition of retaliatory tariffs could amount to an unconstitutional invasion of State or local Sovereignty.
Professor Tribe objects that it is "no answer that the United States might choose to pay whatever fine is levied by the WTO rather than sacrifice the sovereignty of one of the fifty States, for that makes each State's sovereignty a hostage to the Federal Government's willingness to impose a tax burden on the Nation as a whole. It also puts each State in the dilemma of either accepting the tax burden on its citizens entailed by having the United States pay a WTO fine, or protecting its citizens from that burden by lobbying against the fine and urging instead that the offending state be brought to heel." Setting apart the factual error of assuming that the WTO has the power to "levy" a "fine," Professor Tribe's argument buries the critical point that it is only the United States, not the WTO, that would wield the power to limit or displace State law. (emphasis added) Even if United States participation in the WTO's dispute resolution procedure might create incentives that would otherwise not exist to set aside some State laws, Congress can certainly structure the range of its future choices in a way that tends to have that effect. There is in such a decision "no meaningful shift of control over state sovereignty to foreign tribunals." (Footnotes omitted) |
We were equally pleased to discover the memo of Nov. 25/96 to Alan Kreczko, Special Assistant to the President and Legal Adviser to the National Security Council, prepared by Christopher Schroeder, Acting Assistant Attorney General, Validity of Congressional-Executive Agreements that Substantially Modify the United States' Obligations Under an Existing Treaty, which may also help to explain tricky distinctions:
| Quote: | | ...The distinction is often ignored between the rule of domestic law which is established by our legislative and judicial decisions and may be inconsistent with an existing Treaty, and the international obligation which a Treaty establishes. When this obligation is not performed a claim will inevitably be made to which the existence of merely domestic legislation does not constitute a defense and, if the claim seems to be well founded and other methods of settlement have not been availed of, the usual recourse is arbitration in which international rules of action and obligations would be the subject of consideration. (Quoting Secretary of State Charles Evans Hughes in a letter Feb. 19/23 to the Treasury). (Footnotes omitted) |
See also Crosby v. National Foreign Trade Council 530 U.S. 363 (2000) and analysis by Peter Spiro at the American Society of International Law (ASIL) Insight, June, 2000.
Yes, what about federalism and the Commerce Clause in all this?
Here's what white shoe law firm White & Case had to say about the effect of the Commerce Clause on state legislation prohibiting outsourcing in a special report dated March 15/04, some of which may apply to the cross-border betting dispute:
| Quote: | The aforementioned state laws may be vulnerable to challenge under the U.S. Constitution on the grounds that they violate the Foreign Commerce Clause (Art. I, §8, cl. 3), which gives Congress the power "[t]o regulate Commerce with foreign Nations, and among the several States." U.S. Const. art. I, § 8, cl. 3. While the clause is phrased as an affirmative grant of power, it has a “negative” or “dormant” aspect that restricts the states’ power to enact laws that interfere with interstate or foreign commerce. The principle underlying the interstate aspect of the Commerce Clause is that “our economic unit is the Nation,” and states therefore may not act in isolation as separate economic units. Similarly, the foreign aspect of the Commerce Clause is intended to allow Congress to “speak with one voice” for the country in economic dealings with foreign nations.
When considering a state law that burdens foreign commerce, courts begin with the tests applicable to the interstate Commerce Clause, then apply an even higher level of scrutiny. “Foreign commerce is pre-eminently a matter of national concern,” and the country must act uniformly in regulating commercial relations with foreign nations. A state law that discriminates on its face against articles of commerce from foreign nations based solely on their origin violates the foreign Commerce Clause. Because the services provided by offshore employment sources are clearly “articles of commerce,” state anti-outsourcing laws impose a significant penalty on companies that utilize the offshore outsourcing. In so doing, these laws would discriminate against “foreign commerce.” The laws might also interfere with the ability of the United States government to “speak with one voice” on foreign commerce questions. Indeed, when the Framers met to design the Constitution, they were motivated in substantial part by a desire to nationalize foreign trade dealings. The drafters of the Foreign Commerce Clause understood that discriminatory treatment of foreign commerce by one state could create problems, such as the potential for international retaliation, that concern the entire nation.
Among the most prominent cases involving the Foreign Commerce Clause is the so-called 'Massachusetts-Burma.' law. (See Crosby v. National Foreign Trade Council above). In 2000, the Supreme Court invalidated a Massachusetts statute that limited state purchases (government procurement) from companies doing business with Burma (also known as Myanmar), a nation with a notorious record of human rights abuses. The Court's decision was heralded in some quarters as the death knell for state foreign relations activities. The president of the trade group (the National Foreign Trade Council) that filed the lawsuit said the ruling would “help put an end to state and local efforts to make foreign policy.” Many commentators expressed similar sentiments. While the lower courts struck down the Massachusetts law, in part, on the grounds that it violated the Foreign Commerce Clause, the Supreme Court did not base its decision as such. Instead, it based its decision only on the grounds that the US Congress's own Burma sanctions preempted the Massachusetts sanctions. The Court carefully avoided any suggestion that state foreign commerce activities are invalid in the absence of some preemptive action by Congress. The decision therefore has no implications for state foreign relations activities beyond state laws regulating transactions with Burma.
Other recent cases, however, that are similar to the Burma case have been held to be unconstitutional violations of the Federal Commerce Clause. For example, in Emerson Electric Co. v. Tracy, 735 N.E.2d 445 (Sup. Ct., Ohio, 2000), the Ohio high court struck down a state franchise tax as unconstitutional because it allowed Ohio firms to deduct only 85 percent of their foreign operation dividends rather than 100 percent of such earnings. The court held that the statute clearly violates the Foreign Commerce Clause, which forbids states from interfering with foreign commerce.
Because the Supreme Court failed to address whether the Massachusetts Burma Law violated the US Constitution, it is not certain that state laws restricting either purely private outsourcing activities or those related solely to government procurement are unconstitutional on their face. However, recent lower court opinions and earlier Supreme Court holdings indicate that many state laws directed at offshore outsourcing may be subject to constitutional scrutiny as violating the Federal Commerce Clause.
It remains to be seen whether formal challenges will be mounted against outsourcing legislation at the federal, or sub-federal levels. It does appear certain, nonetheless, that many measures restricting outsourcing will be introduced as the political debate intensifies in the coming months. Moreover, rhetoric and official measures against outsourcing might not subside until the U.S. economy fully recovers, including significant job growth. |
We'll continue to examine U.S. options and their potential outcomes at this forum. Please check back soon for updates.
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| Posted: Thu Dec 15, 2005 12:26 pm Post subject: |
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How likely, really, is the U.S. to comply with the ruling?
If the softwood lumber dispute between the U.S. and its closest trading partner, Canada, is anything to go by, not very. Here's what Prime Minister Paul Martin had to say about the matter recently:
| Quote: | 'We're going to continue to press our case with the United States. We'll do so respectfully but we're not going to let up. If we have to go to court to get what's rightfully ours, we willl. If we have to keep pressuring the Americans, we will.' - Oct. 30, 2005 promising not to give up in the softwood fight against the U.S.
'You cannot have free trade where one partner to a free trade agreement - when a decision goes against them - simply says we're going to ignore it.' - Nov. 17, 2005 warning Bush that U.S. credibility in seeking trade deals with the rest of the world is in doubt because his country won't respect a NAFTA ruling on Canadian softwood lumber.
(From Paul Martin's shifting rhetoric on Canada-U.S. relations in the Globe and Mail Dec. 15/05 at p. A9) |
Nevertheless, consider recent testimony by Public Citizen director Lori Wallach before the House Ways and Means Committee (links above), which included the following observations:
| Quote: | In most WTO cases, the country that launches the challenge wins. As a result, mere threats of WTO action now cause many nations to change their policies. The challenging country at least partially prevailed in an astonishing 102 out of 118 completed WTO cases—a success rate of 86.4 percent.
• Important U.S laws ruled illegal at the WTO. In 42 out of 48 cases brought against the United States in which a WTO panel has made a ruling, or 85.7 percent of the time, the WTO has labeled as illegal policies ranging from sea turtle protections and clean air regulations to tax and antidumping policies. The United States also lost two high-profile cases that it brought against EU computer tariff classifications and Japan’s film policies.
• U.S. trade safeguard laws have been successfully challenged numerous times in the WTO. One of the most politically sensitive aspects of Congress’ 1994 consideration of the WTO was the degree to which U.S. trade safeguard law would have to be changed to conform to the related WTO agreements. Congress was promised that our laws would remain effective, yet, a decade later, the United States has not been able to successfully defend any of our safeguard laws in 14 out of 14 completed cases brought by other countries against our safeguards on products ranging from steel to lamb to wool shirts. (emphasis added) Furthermore, the United States has lost 11 out of 15 anti-dumping or countervailing duties cases. Additionally, Doha Round “Rules” negotiations are poised to translate these WTO cases against the U.S. into new, more expansive limits on U.S. domestic trade safeguard laws. Meanwhile despite promises that other U.S. trade laws, such as Section 301, would remain operational under a WTO regime, the U.S. withdrew a case against Japan regarding anticompetitive practices in film trade after it became clear that use of Section 301 sanctions would be prohibited under WTO rules. |
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| Posted: Thu Dec 15, 2005 2:12 pm Post subject: |
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How are negotiations proceeding at the state level?
We were pleased to find IGPAC Recommendations and Comments on the US Submission for the WTO General Agreement on Trade in Services (GATS) Negotiations, a document dated Oct. 7/05 that provides a few clues. See especially the reference to the dispute beginning at the bottom of p. 16:
| Quote: | The USTR held extensive consultations with states throughout the course of the WTO gambling dispute, including a working group open to participation by state officials and state gambling authorities to assist in the preparation of the case and to mount a vigorous, successful defense. The USTR pointed out that the Appellate Body threw out all of Antigua’s challenges to U. S. state laws as we requested, and that the dispute ended with no adverse finding against any state law.
Ø In deciding the recent Antigua & Barbuda challenge of US internet gambling laws, the WTO made several findings of particular importance to state and local governments. Although the WTO ruling noted that the US had not intentionally made a commitment on gambling services, the ruling asserted that the vague and unclear US language in its schedule of commitments consisted of an actual commitment on all gambling services. This ruling leads IGPAC members to question whether other US language on other committed sectors, such as financial services, health facilities, business and professional services, and services incidental to distribution of energy, is sufficiently clear so as to avoid other unintended consequences.
Ø The WTO ruling also found that a complete ban on internet gambling would be prohibited, as it amounts to a “zero quota.” Indeed, the USTR’s own briefs urged the WTO to consider that governments “cannot effectively exercise the “right to regulate” services that are the subject of a commitment if they lack any power to prohibit services within a sector ...” Given such developments, that imply certain, potential and unpredictable limits on government regulatory power, IGPAC concerns are warranted.
Ø While the WTO ruling dismissed claims against state laws, such dismissal occurred because Antigua & Barbuda had failed to brief the state issues – which would seem to leave such state laws open to future challenges. It is IGPAC’s understanding that the challenges were thrown out by the WTO panel solely because they lacked specificity and details about the problems with any specific state law. The determination plainly did not attempt to reach any conclusions about the validity of those state laws. To the contrary, our assumption is that, to whatever extent valid challenges were asserted as to federal laws, those same challenges could undoubtedly be extended to similar state laws. (emphasis added) Those representing the interests of state and local governments cannot afford to be complacent about these issues when it is plainly possible for another litigant to do the work that Antigua did not do in preparing its case.
While mentioning that the Appellate Body found that the US made a GATS market access commitment gambling services, the USTR confirmed that this commitment does not prevent the enforcement of laws to protect the public from organized crime and other dangers associated with internet gambling. The USTR does not foresee any possible circumstance in which the federal government would seek to compel a state to authorize gambling as a result of a WTO dispute settlement decision. Since the WTO ruling rejected challenges to state measures, the USTR asserts that the report provides no basis for reaching conclusions about how future hypothetical cases might affect state laws or regulations, and that the ruling reaffirmed the right of the United States and all WTO members to regulate gambling.
Ø IGPAC is concerned about the foundation of these conclusions. The US was able to succeed in this case by showing that it had a national commitment to regulating and/or barring internet gambling, so that there was a viable “public morals” position on that issue. To the extent, however, that it appeared that some forms of remote gambling were allowed (on horse racing) while internet gambling was not, the Appellate Body did find that there was a problem. We believe that the concerns raised about a lack of complete uniformity in applying a principle across the board are likely to cause similar problems with respect to sub-federal laws. (emphasis added) There are clearly broad and diverse opinions among states about the “public morality” of gambling. Nevada and Utah are adjoining states, yet they have a wide dichotomy in public views about whether to allow gambling and how to regulate such activities. Both are united, however, in the conclusion that such issues should be settled at the state level. The issue confronting us all is uncertainty about whether the WTO would allow such a range of public morals” policies within the same signatory party. Absent precedent, no one yet knows, and IGPAC members remain unconvinced that the Appellate Body’s decision clearly and unambiguously protects each state in setting its own “public morals” standard.
Ø IGPAC remains gravely concerned about how the inclusion of gambling as a covered service will affect the special treatment that states are required by federal law to give to Native American tribes. In some states, only Indian tribes are allowed to have gaming operations, licensed as single-service providers. How does that monopoly comport with the bar on market access limitations? Can states apply a public morals exception while allowing tribes, without standing under GATS, to run gambling operations -- when other sovereigns, with sstanding under GATS, cannot? We respectfully maintain that it would seem to make more sense for the federal and state government authorities to analyze these issues and their potential implications sooner rather than later, ideally before possible future challenges. While the Appellate Body’s decision plainly does not address every possible issue, it offers substantial guidance, and its analysis of federal laws would seem applicable to the same issues should they arise in state laws.
Ø Other uncertainties following this case include: whether Congress will take action to amend the Interstate Horse Racing Act to comply with the WTO ruling; and, if not, whether Antigua & Barbuda’s response may include the withdrawal of trade commitments to honor US intellectual property rights.
Ø IGPAC is not alone in expressing concerns about this case. Attorneys general from 29 states wrote the USTR on May 31, 2005: “The prospect of [future] WTO challenges to [state-level gambling] prohibitions should alone be sufficient to give U.S. negotiators enormous motivation to use the current GATS negotiations to secure a rule change that makes explicit the right of a WTO signatory to ban undesirable activity in a GATS covered sector.” |
We also note with interest the National Conference of State Legislatures (NCSL) seminar Dec. 6-7/05, Trade Policy Leadership, at the Chicago Hilton. Here are a few of the sessions offered:
| Quote: | Impact of Investor-State Issues
The investment chapters of international trade agreements have created a great deal of concern for state policymakers. Experiences with investor-state cases arising from NAFTA Chapter 11 have caught many by surprise and brought trade closer to state capitals than anticipated. This session will review pending NAFTA Chapter 11 cases currently pending, the recently decided Methanex case award and state-federal cost recovery issues, investment provisions in the CAFTA-DR agreement in light of the WTO Antigua-Barbuda gambling case, concerns about energy and mining challenges in the broader context of Bilateral Investment Treaties (BITs) and Free Trade Agreements (FTAs), and efforts by states, NCSL, and others to provide more oversight on these issues.
Presiding:
Representative Terri AUSTIN, Indiana
Speakers:
Tara MUELLER, Deputy Attorney General, Department of Justice, California
Luke PETERSON, Editorial Director, INVEST-SD: Investment Treaty News, Canada
William WAREN, Policy Director, Forum on Democracy & Trade, District of Columbia |
| Quote: | Orientation to the Day
What are the WTO agreements of greatest importance to state governance and economic development strategies? The panels today look at this question in relation to the WTO Services, Agriculture, Subsidies, and Procurement agreements as well as at recent WTO dispute cases that cite these agreements.
Presiding:
Representative Phillip FRYE, Chairman, House Committee on Federal Relations and Trade Issues, North Carolina and Vice Chair, Economic Development, Trade & Cultural Affairs, NCSL
Speaker:
Kay Alison WILKIE, International Policy Analyst, Department of Economic Development, New York and Chair, USTR Intergovernmental Policy Advisory Committee |
| Quote: | WTO Issues in Detail: Services and Domestic Regulation
Services currently represent over 70% of the American economy and they remain one of the critical areas of negotiations at the WTO Ministerial. This session provides an overview of the GATS agreement and why it’s of particular interest to states. Particular attention will be given to one area of on-going negotiation – on energy services – and one area of on-going dispute resolution – on gambling – with a discussion of the ‘domestic regulation’ discipline and its implications.
Presiding:
Honorable David ENNIS, former Representative, Delaware and Member, Forum on Democracy & Trade Board of Directors, Delaware
Speakers:
Senator Jerry GRAFSTEIN, Co-Chair, Canada-U.S. Interparliamentary Group and Chair, Banking and Trade Committee, Senate of Canada, CANADA
Robert STUMBERG, Clinical Director, Harrison Institute of Public Law, Professor of Law, Georgetown University Law Center, District of Columbia |
| Quote: | WTO Issues in Detail: States and International Procurement
During the Uruguay Round of trade negotiations, the U.S. Trade Representative (USTR) adopted the policy of asking governors whether they wished to commit their states to WTO disciplines in the General Procurement Agreement. While states have appreciated this flexibility, some have argued that such commitments must also be approved by state legislatures since it impacts their spending powers. Earlier this year, Maryland became the first state in the Union to legislatively overturn the Governor’s commitment to be bound by the procurement chapter of trade agreements. (See Public Citizen memoranda of July 2/04 and March 7/05)). This session will examine the motives for and effects of Maryland’s legislative action as well as states’ concerns in light of Maryland’s experience. Panelists will also address state purchasing power as a tool of sustainable economic development, through intelligent global sourcing of products and services. (Check the status of each state's commitment at Public Citizen here).
Presiding:
Representative Terri Austin, Indiana
Speakers:
Senator Paul PINSKY, Maryland
Kay Alison WILKIE, International Policy Analyst, Department of Economic Development, New York and Chair, USTR Intergovernmental Policy Advisory Committee |
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| Posted: Wed Dec 28, 2005 4:29 pm Post subject: |
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Any chance of a new body of law just for the Internet/e-commerce?
Maybe and sooner than you might think. We found links to something called the United Nations' Working Group on Internet Governance in commentary by Harvard University information systems consultant Scott Badner at Network World. The comments dated Aug. 29/05 concern the Cross-Border Betting Dispute Between Antigua and the U.S.. They appear under the headline, Gambling forces the question: Who controls the 'Net?. Here is a key excerpt:
| Quote: | This ruling establishes that the U.S. cannot unilaterally control what people can use the Internet for, even U.S. residents using the Internet from within this country. This is certainly not going to go over well with those people in Congress or other parts of government who think the U.S. should own the Internet because "we built it."
In this case, the U.S. told the WTO that the country would comply with the organization's ruling but would not "ask Congress to weaken U.S. restrictions on Internet gambling." Seems to be a tricky balance to me. It's not just the WTO that is telling the U.S. that it cannot control the 'Net by itself. The final report of the United Nations' Working Group on Internet Governance does the same. This report will go to the World Summit on the Information Society later this year, which is likely to agree. The next few months will be interesting on the Internet governance front, and I expect to return to the topic from time to time. |
So do we.
Click here for updates on this topic at our You Asked Us forum.
Link to this entry using
http://pokerpulse.com/legal/viewtopic.php?p=194#194.
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| Posted: Mon Jan 16, 2006 12:09 pm Post subject: |
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Britain issues rallying cry for global gaming talks:
We note with interest the Reuters story by Gavin Haycock of Jan. 16/06, UK to hold global talks on online gaming, describing a UK initiative to host a global forum to discuss problem areas of the Internet gambling industry. Here are a few key paragraphs:
| Quote: | The push for an international meeting comes after a booming but volatile Internet gambling market saw three big UK stock market floats in 2005, generating multi-billion dollar revenues.
"We want to initiate a discussion about problem areas which include protection of children, advertising, money laundering and criminal infiltration," said Anthony Wright, a spokesman for the Department for Culture, Media and Sport on Monday.
..."We became the first industrialised nation to legalise online gaming ... The reason we introduced the act was to regulate the new forms of gambling. We can only get so far on our own," Wright told Reuters.
The ministry has yet to send invitation letters for the meeting but has received positive feedback from Australia, South Africa and New Zealand.
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The announcement, which coincided with Martin Luther King Day, a holiday for many Americans, might also be an effective means of marshalling support among WTO Members with an interest in the industry similar to Antigua's and which are likely monitoring the U.S. position on the cross-border betting dispute. The monitoring of WTO decisions by Members is an important watchdog feature of WTO membership agreement designed to ensure compliance with panel decisions.
See also the Guardian Unlimited report of Jan. 16/06 by Mark Oliver, Britain to host online gambling summit, which states:
| Quote: | Government officials are anxious to try to persuade other countries towards starting a process of regulation so the industry is made up of legitimate, visible and accountable firms rather than rogue operations being run from locations without restrictions.
Australia, South Africa and New Zealand are reported to have welcomed the UK's idea of a summit, and online jurisdictions such as Malta, Costa Rica and Antigua will also be invited.
...Topics to be discussed include methods to stop criminals from defrauding online gamblers and ways to prevent sites being used for money laundering. |
The summit is tentatively scheduled this fall.
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| Posted: Fri Feb 03, 2006 11:26 am Post subject: |
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Further regulatory initiatives:
Kahnawake and Antigua agree to share licensing information
In addition to the UK call for a consistently regulated online gambling industry (see previous post), we note the Jan. 31/06 announcement at the Antigua government website, Kahnawake And Antigua & Barbuda Regulators Sign Mutual Assistance Protocol. Here are a few key paragrpahs:
| Quote: | The Kahnawake Gaming Commission (KGC) and the Antigua and Barbuda Financial Services Regulatory Commission (FSRC), two of the most senior regulating agencies in the online gaming world, have signed a Memorandum of Understanding that allows for the sharing of investigative findings and material regarding existing and prospective licensees.
The objective of the MOU is to enhance effective regulation within the two jurisdictions through an efficient and reasonable channel for the exchange of information.
The KGC and FSRC both acknowledge the need and desirability of providing mutual assistance that will assist in securing compliance, administration and enforcement of their respective laws, regulations, requirements and overall policy relating to gaming and interactive wagering within their jurisdictions.
Each request for the sharing of information will be assessed on a case by case basis to determine whether assistance is appropriate and permissible by the laws of each jurisdiction.
"Given the global nature of the online industry, it is important that regulating authorities develop ways in which they can coordinate their activities. We believe that this MOU will assist the regulators in both Kahnawá:ke and Antigua and Barbuda in the performance of their duties and we hope that other jurisdictions will follow suit", said Alan Goodleaf, KGC Chairperson. (emphasis added) |
More on Kahnawake.
We also note this Jan. 12/06 story at Caribbean Net News, Western Union suspends operations in Antigua-Barbuda, describing what was expected to be a temporary suspension of money transfer operations while the company completed a compliance audit. Here is a brief excerpt:
| Quote: | Having been made aware of the apparent suspension, Government officials, led by the Ministry of Finance and Economy, have engaged representatives of British American Insurance Company Ltd., the franchise holder of Western Union in Antigua, in a series of meetings in an effort to verify and ascertain the reasons for the suspension of Western Union’s operations in Antigua and Barbuda.
Following these meetings and at the request of the government, Western Union’s Regional Manager Ms. Hazel Beckles, on Wednesday provided official notification to the Ministry of Finance and Economy confirming the temporary suspension of Western Union operations in Antigua and Barbuda...Having regard to the importance of the services provided by Western Union in Antigua and Barbuda, the government says it is hopeful that Western Union will resume normal operations next week. |
According to a Jan. 24/06 story in the Antigua Sun, Western Union services remain suspended:
| Quote: | Western Union consultant at British American, Henson James said they were awaiting information from Western Union’s head office (in Miami, FL) and could not do anything until then. Until that time the company’s operations in the country will remain suspended. Local branches have been closed for over two weeks.
The suspension, according to a Western Union official, was the result of an ongoing internal review.
The official, speaking to the SUN in a recent interview, said Western Union monitors its business and periodically conducts routine reviews of its agent base and during the course of such reviews identify certain circumstances which require further attention. He further stated the date for service restoration at that time had not been identified, but the company is working towards that end.
Western Union operations at Jolly Harbour, Spencer’s Supermarket, Liberta, M&M’s on Old Parham Road and British American on Redcliffe Street, have all been affected by the closure. |
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