Negotiations over…for now

The US has broken off its negotiations with Antigua over that nation’s successful WTO challenge of US restrictions on cross border trade in gaming services. From Yahoo News:

“Unfortunately we were not able to reach a settlement,” despite several meetings over the past four months,” said Richard Mills, a spokesman for the U.S. Trade Representative’s office.

Online gambling has grown rapidly, with spending of around $7.5 billion this year, according to industry estimates.

In a decision that U.S. Trade Representative Robert Zoellick called “deeply flawed,” a World Trade Organization (news - web sites) panel agreed earlier this year with Antigua and Barbuda’s claim that the United States’ ban on Internet gambling violated global trade rules.

Although Zoellick said the United States would appeal, the two sides suspended litigation in June in the hopes of reaching a negotiated settlement.

“Our delegation presented a number of proposals for the U.S.’s consideration, but, sadly, they were not prepared to accept them,” Harold Lovell, minister of tourism, foreign affairs and international transport and trade for the twin-island Caribbean state, said in a statement last Friday.

“What they offered as an alternative was not acceptable to us,” Lovell added.

Trade officials said Antigua and Barbuda was expected to formally notify the WTO on Nov. 4 that it wants to resume the litigation process. That would clear the way for the WTO to publicly release the panel ruling and for the United States to proceed with its appeal.

Yahoo! News - US, Antigua Break Off Talks on Internet Gambling

My guess is that since Antigua didn’t knucle under in negotiations, the USTR is doubling down, hoping to get the decision overturned.

It’s a risky move, though, because (I’m guessing) the WTO could order the US to open its borders to offshore gaming operators, something that would no doubt trigger some kind of debate over the meaning of borders in the Internet age.

Still, this case flies below the radar, while reality TV shows and criminal trials fill up the news.