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Emily D. Swoboda

US Waives Right to Appeal in WTO Dispute with Antigua

22 May 2007

The United States has forgone its right to appeal the most recent decision in its World Trade Organization (WTO) I-gaming dispute with the twin-island nation of Antigua and Barbuda (Antigua), leaving it open to further complaints from other WTO members.

Furthermore, not only has the United States chosen not to appeal, for which the deadline was today, it has in the meantime notified the WTO of its intent to withdraw gambling from its commitments to the General Agreement on Trade in Services (GATS).

Mark Mendel, Antigua's lead counsel in the case, attended a meeting today at the WTO in Geneva, Switzerland. He said that because the United States decided not to appeal, the WTO officially adopted the Dispute Settlement Body's (DSB) March panel report, which states that the United States failed to comply with the 2005 ruling handed down by the DSB regarding its dispute with Antigua over U.S. restrictions on I-gaming.

"This now leaves Antigua free to file claims for retaliatory trade concessions, should it choose to do so, to 'assist' the United States in making a decision to comply with our rulings," Mendel explained.

On the other hand, Mendel continued, the United States' unprecedented move to withdraw gambling from GATS likely to have a severe impact not only on the United States, but on the WTO, because it opens the up the United States to claims for damages from every member that considers itself affected by the withdrawal of the commitment.

John Ashe, Antigua's ambassador to the WTO, said in prepared statement to the DSB today that the United States' new position not only runs contrary to the object and purpose of the GATS and other WTO agreements, but also bodes poorly for the future of dispute resolution by small, developing countries at the WTO.

Because the United States has given up the right to appeal, WTO members have until mid to late June to file claims against the United States. And Mendel said there has been some grumbling that certain members are making preparations to do just that.

"Although we do not know for certain, we have indications that the European Union may file for compensation as a result, and while Antigua's potential claim may be relatively small in the scheme of things, that of the EU could be massive," Mendel said.

Mendel explained that Antigua's position is that they don't want compensation, just free access to the U.S. markets.

"The United States is using this as a tactic to avoid the consequences of our decision," Mendel said. "It hasn't been done in this context before, ever, and I think a lot of WTO members are concerned and bothered by it. But the fact is we will continue to press our claim and I believe they (Antigua) will be successful."

US Waives Right to Appeal in WTO Dispute with Antigua is republished from
Emily D. Swoboda
Emily D. Swoboda