CT Blue

The tiny country of Antigua, egged on by an American lawyer, has beaten the United States at it’s own game, at least for the moment. It has won a ruling from the U.S. dominated World Trade Organization, which found that the U.S. could not prohibit the on-line gaming industry from soaking up excess American wealth. Not, at least, as long as it lets the home grown gaming industry do the same. The article in today’s Times is full of delicious ironies.

The U.S., which has excoriated other countries for blowing off the WTO is now, guess what, blowing off the WTO. The WTO, in turn, is considering allowing little Antigua to blow off American intellectual property laws, which means that maybe, instead of paying .99 to download a song from ITunes, you may soon be paying 9 cents a song from AntiguaTunes.

Speaking purely as a lawyer, I was most amused by this:

If anything, the Bush administration raised those stakes in May when it announced it was removing gambling services from existing trade agreements. John K. Veroneau, a deputy trade representative, said that the federal government was only “clarifying our view” that it had never meant to include online gambling in any free trade agreements.

“It is truly untenable to think that we would knowingly bargain away something that has been illegal for decade upon decade in this country,” Mr. Veroneau said, adding that Washington is not defying the W.T.O. but simply pursuing its case through all legal channels.

The W.T.O. allowed that Washington probably had not intended to include online gambling when it agreed to the inclusion of “recreational services” and other similar language in agreements reached during the early 1990s, when the W.T.O. was first established. But the organization says it has no choice but to enforce the plain language of the pacts.

What a bummer. That plain language rule will get you every time.

But there’s more. The U.S. sought to justify its position by arguing that just as Muslims could refuse to import alcohol on moral grounds, so we could refuse to import gambling services on moral grounds. The WTO found, in essence, that we are not allowed to be hypocrites, something so unprecedented that it must have caught the U.S. government totally by surprise:

The general rule in the world of international trade agreements is that a country must treat foreign goods and services in the same manner as it treats domestic ones. The United States, the trade body found, permits online wagering through sites like Youbet.com, a publicly traded company that allows visitors to place bets at horse racing tracks around the globe.

And, of course, some form of casino gambling is legal in more than 30 states, and even local governments advertise gambling services when states encourage people to buy a lottery ticket.

Unfortunately, it looks like little Antigua may never enjoy the fruits of its victory. The U.S. may yet strong arm the WTO into seeing things its way. And that’s only fair. It’s “truly untenable” to think that the rules would apply to us.