By Public Citizen's Global Trade Watch
In March 2003, the Caribbean island nation of Antigua challenged three U.S. anti-racketeering statutes (the Wire Act, the Travel Act and the Illegal Gambling Business Act) and four state laws as “barriers to trade: in “cross-border gambling services” under the World Trade Organization’s service-sector agreement called the General Agreement on Trade in Services (WTO GATS).
The TWO is a 150-member international commercial agency based in Geneva, Switzerland. The GATS was part of the “Uruguay Round” package of trade agreements that was pushed through Congress in 1994 b the Clinton administration utilizing Fast Track trade procedures which bypass normal committee processes and limit debate. GATS rules apply to the service sectors that nations sign up (or “commit”) to be bound by the terms of the agreement. The goal of the agreement is to guarantee foreign service providers access into other WTO members’ markets. Measures that impede that access or are considered “discriminatory” against foreign service providers are challengeable as violating U.S. WTO obligations in the binding dispute resolution system built into the WTO.
In this case, Antigua argued that the cumulative impact of the three U.S. anti-racketeering laws (all three of which predate U.S. entry into the WTO and predate the practice of Internet gambling) prevented the supply of gambling and betting services from Antiguan-domiciled Internet gambling providers to U.S. customers on a cross-border basis. In response, the U.S. trade lawyers argued that hey had never committed the gambling sector to WTO rules and anticipated an easy victory. Instead, after years of costly litigation, the United States lost yet another battle at the WTO.