Antigua Defeats U.S. in WTO Battle

Antigua was unhappy because the U.S. banned offshore online gambling, which provided a lot of revenue for the island. The U.S. claimed that it was absurd for Antigua to take this dispute to the WTO, since regulating gambling comes under the jurisdiction of the U.S. government, not the WTO. The U.S. case makes intuitive sense, but it seems to violate WTO rules to which the U.S. agreed, so Antigua won the case. Now the U.S. has to either ban ALL online gaming -- including horse-bettering and lottery programs which are currently legal -- or allow Antiguan online casinos access to U.S. customers, or pay billions in restitution. Traditionally, this restitution comes in the form of punitive tariffs. But Antigua is too small to inflict any noticeable damage to the U.S., so Antigua asked for permission from the WTO to violate U.S. intellectual property, presumably through piracy of movies, music, technology, or something else. So far as I know, the WTO hasn't issued a final ruling on that point.

It's an interesting case, because it directly challenges the authority of U.S. lawmakers to pass laws in the age of the internet. It also could effect online casinos based in Malta and other countries which have been harmed by the U.S.'s online gambling ban. It also has ramifications for the expansion of intellectual property protections in the Doha negotiations, for which the U.S. is pushing hard.

Dani Rodrik has some commentary here.