The World Trade Organization

The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. Established on Jan. 1, 1995, with a membership of approximately 150 countries, accounting for more than 97 percent of world trade, the goal of the WTO is to help producers of goods and services, exporters, and importers conduct their business.

One of the youngest of the international organizations, the WTO is the successor to the General Agreement on Tariffs and Trade (GATT), established in the wake of the Second World War. While the WTO is still young, the multilateral trading system that was originally set up under GATT is well over 50 years old.

At its heart are the WTO agreements, negotiated and signed by the bulk of the world's trading nations and ratified in their parliaments. These agreements are the legal ground rules for international commerce. Essentially, they are contracts, guaranteeing member countries important trade rights. They also bind governments to keep their trade policies within agreed limits to everybody's benefit.

The United States has enjoyed membership since its inception in 1995 and is seen as a world leader, looked up to by smaller developing countries.

Last year the WTO ruled in favor of Antigua and Barbuda against the U.S. regarding the online gaming issue. Antigua asserted that the U.S. was discriminating against Internet casinos based in its jurisdiction. Antigua's position was that the U.S. government's interference with a multibillion-dollar industry violated international trade rules and was simply a ploy to keep tax revenues within the borders of the U.S. The WTO agreed.

In May of 2005, the U.S. stated its intention to comply with the WTO's recommendations and indicated the need for a reasonable period of time to do so. The Bush administration was granted one year to implement appropriate changes.

A month ago, the WTO was informed that the U.S. administration was taking steps to resolve the issue. We all now know that the April 3, 2006, deadline passed without the U.S. even lifting a finger to initiate any changes. Besides being a slap in the face to Antigua and the WTO, the organization's credibility as a world court may be threatened as a result of the blatant noncompliance by the U.S. government.

Last year, the Bush administration agreed to comply, and this year the government is taking the position that since interstate gambling is completely illegal in the United States, the U.S. has no obligation to recognize it as legal elsewhere. This position becomes more disingenuous in light of Rep. Goodlatte's concession that the oft-cited 1961 Wire Act does not prohibit online gaming.

So, what now? The WTO rules state: "If after 20 days, no satisfactory compensation is agreed, the complaining side may ask the Dispute Settlement Body for permission to impose limited trade sanctions against the other side. The Dispute Settlement Body must grant this authorization within 30 days of the expiry of the 'reasonable period of time' unless there is a consensus against the request.

"In principle, the sanctions should be imposed in the same sector as the dispute. If this is not practical or if it would not be effective, the sanctions can be imposed in a different sector of the same agreement. In turn, if this is not effective or practicable and if the circumstances are serious enough, the action can be taken under another agreement. The objective is to minimize the chances of actions spilling over into unrelated sectors while at the same time allowing the actions to be effective."

The problem can be readily seen. Antigua has a population of approximately 70,000. Any action they take with regard to products we export there wouldn't be felt here. Whereas that method of punishment might be felt if levied against Antigua by the U.S., the reverse is not true.

Antigua claims the loss of more than $90 million and 4,000 jobs due to the Bush administration's attempts to prohibit offshore online betting. Antigua's attorney Mark Mendel says: "There are ways to get an offending nation to pay a little bit of attention."

We'll just have to wait and see Antigua's next move. What is clear is that with every step forward for online gaming, the prospect of prohibition becomes more distant.