Antigua and the WTO

United Kingdom

This article was produced by Olswang LLP, which joined with CMS on 1 May 2017.

The World Trade Organisation (WTO) battle, in which the United States' position has been found to be inconsistent with its obligations in relation to online gambling, continues. Despite Antigua's run of victories, the US is yet to change its position or agree to compensate Antigua.

In fact, the US is moving the other way and seeking to withdraw from its WTO trade commitments concerning online gambling. In response, Antigua commenced a claim in June for compensation from the US under Article 22 of the WTO's Understanding on Rules and Procedures Governing the Settlement of Disputes.

Article 22(2) provides that if a member (the US) fails to remedy non-compliance with its obligations within a reasonable period of time, the member will enter into negotiations with any party which has invoked the Dispute Settlement Procedure (Antigua) with a view to agreeing compensation. If no compensation is agreed the party that invoked the Dispute Settlement Procedure (Antigua) may request or seek authorisation to suspend the application of other WTO obligations.

Antigua has sought the suspension of its intellectual property obligations to the US, which would allow Antigua to produce, for example, software and pharmaceuticals without paying licensing fees. Antigua has valued this compensation at US$3.4 billion per annum.

The European Union, Canada, Australia, India, Costa Rica and Macau have all now joined Antigua on its side of the battle line. Meanwhile, US diplomats have met with Antiguan officials and say that they are working towards a mutually satisfactory resolution to the dispute.