Latest World Trade Organization Lunacy
Dan Becker’s post Trans Pacific Partnership: A new Constitution gained a lot of traction because once again the public media is beginning to pay attention to trade policy. Angry Bear has carried a number of posts on the World Trade Organization intent and structure…here are several on the particular issue between Antigua and the US. The issue is not earthshaking in amounts of money, but offers a look at the potential conflicts that can play out between nations. Perhaps coming later further exploration of the World Trade Organization (from past Angry Bear posts) will be warranted.
Price of free trade or the price of protectionism,
Antigua update Part 1 WTO GATS,
Update about Antigua,
WTO and Antigua follow up
From The Huffington Post by Lori Wallach comes this note:
Internet pirates of the Caribbean
On Monday the World Trade Organization (WTO) officially authorized Caribbean nation Antigua to sell $21 million in “pirated” U.S.-copyrighted music, films and computer programs in retaliation for the United States failing to comply with a 2005 WTO order to allow online gambling here. Say what? (And, no, this news was not sourced from a parody in The Onion.)
The case is an illustrated guide to much of what is wrong with the WTO. And, it should spotlight the lunacy of Obama administration plans to expand this dangerous “trade” agreement model via the Trans-Pacific Partnership (TPP) “free trade” agreement. More on that later. Let’s tour what is now a full coop of WTO chickens that have come home to roost on this WTO case.
First, the backstory: in 2003, Antigua filed a case at the WTO claiming that U.S. laws banning Internet gambling violated WTO rules. The case, which some say was in fact the brainchild of an American attorney, Mark Mandel, who is handling the WTO litigation for Antigua, was joined by the European Union and other countries with major gambling industries. Antigua won a final ruling in 2005 and yesterday’s “sanctions” announcement was retaliation for the United States failing to change its domestic laws to comply with the WTO.
Why does the WTO have anything to say as to whether or not the U.S. Congress can ban Internet gambling, especially when the ban applies to domestic and foreign firms alike? Unlike past trade agreements, which focused on cutting tariffs, the WTO imposes expansive constraints on signatory governments’ non-trade policies and establishes new corporate rights. The WTO’s General Agreement on Trade in Services (GATS) limits how the U.S. government may regulate foreign service firms operating here and cross-border “trade” in services too. The WTO’s Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement requires countries to provide expanded monopoly patent and copyright terms. (That’s how U.S. drug patent monopolies got expanded from 17 to 20 years in 1994 when Congress OK’d U.S. WTO accession, overruling decades of congressional opposition to such patent extensions and costing us billions in higher drug prices, pocketed by WTO booster Big PhRMA.)
“Why does the WTO have anything to say as to whether or not the U.S. Congress can ban Internet gambling,”
One answer to that is that the US signed up to the WTO. If you don’t like the provisions then don’t sign the contract sort of thing.
And the actual WTO ruling was about this bit:
“especially when the ban applies to domestic and foreign firms alike?”
The WTO noted that the limits on betting on horse racing are different for US domestic firms and for foreign firms. Thus the US discriminates between US and foreign firms in the laws about betting. Thus the US loses. Because one of the major promises you make when you sign up to the WTO is that you will not so discriminate between US and foreign forms (except for obvious areas like national security).
And that really is it. If the laws about online better were the same for everyone then Antigua would have lost their case. It’s all got nothing to do with gambling: it’s about discrimination.
Now, if you don’t like this about the WTO then that’s OK, you can leave. Any time you want to. It’s not something like the UN or anything. It’s just a contract. When you join you agree to abide by that contract. And the “court” there is really arbitration. Did you abide by the rules of the contract or not?
If you don’t like the system then fine, leave. But do recall that everyone else will then no longer be bound by the WTO with respect to the US. Everyone can then discri9minate against American companies and exports if they want to.