The World Trade Organization – How the United States Should Comply
In March 2007, the World Trade Organization (WTO) ruled, in response to a dispute filed by the Caribbean island nation of Antigua and Barbuda, that the U.S. unfairly prohibits foreign Internet gambling operators from accessing the U.S. market, while allowing domestic companies to legally accept online bets. In response, the Office of the U.S. Trade Representative announced the U.S. intention to withdraw its gambling commitments to the WTO, thus allowing the U.S. to keep its markets closed to offshore based internet gambling operators. The European Union, Japan, India, Canada, Australia, Costa Rica, Macao originally joined Antigua and Barbuda in requesting talks to discuss compensation with the U.S. resulting from this trade agreement violation. Recently, the E.U. agreed to accept compensation from the U.S. for the withdrawal of market access, with other countries likely to follow suit. Unfortunately, the commonly held view of trade experts is that the trade compensation attained by the E.U. pales in comparison to the trade opportunities lost in the gambling sector, with no new trade avenues being opened, merely existing ones clarified or confirmed.
Rather than close the U.S. Internet gambling market to foreign companies and pay trade concessions to do so, the U.S. should comply with WTO requirements and open its market to foreign competition. The Internet Gambling Regulation and Enforcement Act, legislation introduced by U.S. Representative Barney Frank, could address this violation of international trade rules and bring the U.S. into compliance with WTO requirements by allowing for a level playing field among domestic and foreign Internet gambling operators.
In a letter to the U.S. Trade Representative, eight members of Congress, including House Financial Services Committee Chairman Barney Frank and House Committee on the Judiciary Chairman John Conyers, said the U.S. should consider altering its ban on internet gambling rather than pay compensation to countries barred from offering internet gambling services in the U.S. This position is also supported by the European Trade Commissioner who has said that Representative Frank's bill could bring the U.S. into compliance with the WTO.