Panellists at a trade forum levelled harsh criticism at the US, focusing on a burgeoning trade clash between the US and Europe over internet gaming.

The forum believes that the US could be liable for up to US$100 billion in trade concessions to European industries after placing illegal discriminatory trade restrictions on European gaming operators.

The disputed concessions arise from Antigua's victory earlier this year when the WTO ruled that the US violated its treaty obligations by excluding online Antiguan gaming operators, while allowing domestic operators to offer various forms of online gaming.

Instead of complying with the ruling, the Bush administration withdrew the sizeable gambling industry from its free trade commitments.

As a result, all 151 WTO members are considering seeking compensation for the withdrawal equal to the size of the entire US land-based and online gaming market, estimated at nearly US$100 billion.

Previously, US Tries To Regulate Internet Activity Despite Treaty

In 2003, the island nation of Antigua and Barbuda took a look at the thicket of U.S. laws governing gambling and decided that they violated the United States' free-trade obligations, as administered by the World Trade Organization. Antigua had a more than scholarly interest in this issue because, when offshore Internet gambling businesses were first being set up, the country decided to both welcome and strictly regulate them. Not liking what it saw in the U.S. law, Antigua initiated a WTO proceeding challenging the regulations.

Antigua's basic theory in its WTO complaint was simply that, if the United States allows any Internet gambling at all, it couldn't, in light of its WTO obligations, impose barriers to foreign companies seeking access to its market. It was a pretty straightforward free-trade argument. In response, the United States tried to take advantage of a "morals" defense in WTO proceedings that says, reasonably enough, that if you don't make a product in your country due to moral objections, you needn't open your market to foreign providers of that product.

...the WTO upheld Antigua's complaint and essentially ruled that while a "morals" defense could theoretically be made, the United States was in no position to actually make it, since it doesn't completely prohibit Internet gambling.

The WTO gave the United States a year to comply with its ruling by either changing its laws to fully ban online gambling or by allowing foreign access to the online-gambling market. That year ended last April, but rather than do anything to comply, the United States simply issued a statement to the effect that it had spent the year reviewing the matter and decided that it has been in compliance all along. Antigua is, unsurprisingly, challenging this response. A final decision from the WTO is expected early next year.

...

The obvious question is what Antigua can do with a victory at the WTO. Retaliatory tariffs plainly aren't particularly appealing for small country like Antigua, because they would certainly hurt more than they would help. But the plucky little island paradise does have some creative options at its disposal. If the United States remains recalcitrant, under the WTO rules, Antigua would potentially have the right to suspend its own compliance with the treaty that obligates it to respect the United States' intellectual-property laws.

First, I'm not a big fan of the WTO.

However, the fact that such a small country is fighting fire with fire by using it sort of makes me giggle a bit.

Congress doesn't understand the Internet, nor the global economy that it creates. This is going to backfire and in a very bad way. And the United States will respond as it always has: "Eh, we're going to do whatever we want anyhow."

As it turns out, the US Department of Energy (and almost everyone else except members of Congress) was correct when they predicted that there would be little energy savings. This echoed concerns voiced after a similar experiment was attempted in Australia. Critics pointed out a basic fact: the gains in the morning will be offset by the losses at night, and vice-versa, at both ends of the switch. That appears to be exactly what happened.

Reuters spoke with Jason Cuevas, spokesman for Southern Co. power, who said it plainly: "We haven't seen any measurable impact." New Jersey's Public Service Enterprise Group said the same thing: "no impact" on their business.

Next week's agenda for Congress, policing the internet and stem cells!