WTO Decision Destroys World-Wide Belief In Trading System
Published on December 23, 2007 by Tom Jones
After reviewing the decision by the WTO on compensation for Antigua, it appears that two of the three persons who were impaneled to decide the extent of award, violated their mandate to make such determination which was to be based on the findings of earlier rulings.
While the WTO found that the U.S. violated its trade agreements in the area of cross-border trade in services for Internet gambling, the panel that released the monetary and penalty decision has narrowed the scope of that prior ruling to include only horse-racing, and ignored all other areas, which was the full scope of the violation.
This gives the appearance of undue influence by a major (U.S.) player in the decision making process.
After years of trial and appeals, the WTO made clear that the violation was in fact protectionism, and clearly was targeting only foreign firms, and that the U.S. must come into compliance with its treaty obligations by either opening the market to foreign companies or restrict domestic companies from providing these services.
The award granted Antigua does not and can not accomplish this.
The final determination has undermined the spirit of the WTO decision and has given a very weak slap on the wrist to the offender.
There is no appeal allowed by either party on this decision, yet, it does not give the appearance of a decision that was come to in a manner consistent with the panel's obligations.
The WTO will now be looked at as a rubber stamp for the U.S. as a result.
With this narrowed decision and the minimal penalty, why would any trading partner continue to have faith in the entire WTO process, and more imporantly, why would they not use this as a means to withdraw obligations they are no longer comfortable with?
A precedent has now been set that effectively sets aside any meaningful position regarding sanctions that must and should be effective to demand compliance by offending countries, and to ensure that if a country violates it's treaties, there will be major consequences.
A reasoned appeal to the WTO body regarding this decision may be the proper method to correct this.
The WTO was developed to give all countries a balance in trade, this decision will destroy the purpose of the WTO. Any country that is committed to this organization should be offended by the methods used, as they were not consistent with their own published rules.
As an American, I am glad that the final determination was minimal, however, the decision was not just and does nothing to enhance the faith and determination of any country that is necessary to ensure fair trade.
Worldwide respect of the WTO has now diminished to a point that many wonder why it even exists.
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