What if the WTO Decision Goes Antigua's Way?

The Washington Post says that U.S. prosecutors put Cohen behind bars in 2002 for running an Internet gambling site in a Caribbean country. Not long before the prison gates shut, he learned that the federal crackdown on online betting might violate global trade rules. He persuaded Antigua and Barbuda to instigate a complaint at the WTO.

Now it seems that Antigua and Barbuda, population 69 000, is winning. The case has become an embarrassment to Washington. The world’s only superpower may have to surrender to a country whose entire population could fit into the Rose Bowl.

In 1998, federal prosecutors charged operators, including Cohen, with violating a 1960s-era law forbidding the use of phone wires for gambling. Convinced that the law didn’t apply in Antigua, Cohen returned voluntarily to U.S. soil where he was imprisoned for his gambling Web site based in Antigua.

“No judge is going to let this stand,” he thought. But a jury convicted him and the judge gave him 21 months. Not long before Cohen entered prison, a strange letter arrived. The writer suggested that the U.S. government’s position left it vulnerable to a trade complaint. “Is there anything to this?” he asked a lawyer.

“Maybe,” was the answer. Years earlier, Washington had pledged to open the U.S. market in “recreational, cultural and sporting services” to global competition.

Cohen alerted the Antiguans. Antigua filed. “Do we not have a duty to our citizens to protect their jobs?” said Sir Ronald Sanders, Antigua’s ambassador to Britain and the WTO. The United States had a strong defense - the need to protect “public morals and public order.”

WTO member countries can ban goods and services that might harm their social fabric, a classic case being the prohibition of liquor imports in Muslim countries.

“Gambling and remote supply of gambling, raises grave law-enforcement and consumer-protection concerns,” the U.S. trade representative’s office said in a filing. 
There was, however, a hole in the U.S. position: The government tolerates Internet betting on horse races and, in some states, lotteries and other games.

Laughing, the Antiguans are asking the WTO to declare that Washington is defying its ruling. Many experts expect Antigua to win again.

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