Interview with Mark Mendel, Legal Advisor to Antigua and Barbuda
by Jana Sedlakova
Over recent years the interest of operators in the Antigua and Barbuda WTO case against the US has worn off. It is clear that a treaty is enforceable when there is the will to do so but it is quite a different scenario when one of the governing parties lacks the will or motivation. Similar claims can be made when it comes to the interpretation of the single internal market in the European Union with reference to free movement of goods and services.
Whether there are any parallels with the EU failing to release their grip on state monopolies, Mark Mendel, Antigua’s lead attorney said “well with us [Antigua], there is a legal distinction in that WTO law is clear that we are entitled to offer these services in America, whereas EU law is a bit more opaque. But in either case you have the fundamental problem of the “carry over” perception of gaming as either a vice or a state monopoly, whereas electronic and cross-border trade, as well as developing and changing sensibilities, have placed gaming squarely within the bounds of entertainment. The failure (or refusal) of a lot of states to recognise this fact is the primary reason why gaming continues to be accorded this ambiguous and dichotomous treatment from a lot of jurisdictions.”
The Antiguan dispute may seem to have lost momentum but is there much to be gained any more? Perhaps Antigua would be better placed to accept the loss and to focus on other areas of revenue generation. Banking or financial services could equally serve this purpose. Mendel confirmed that it is a necessity for Antigua to shift its focus but added that “…the US has destroyed the domestic [gambling] industry, and the country (and the Antiguan industry) deserves compensation or accommodation to compensate for what the US have done. If Antigua as a country, and the operators as economic participants, get nothing (whether in gaming or some other concessions) after all of this, it will reveal the WTO as the “one-way street” that we were assured it was not going to be when we signed on… I note that the Americans are pretty aggressive at shutting down any advantages that might accrue to the financial services industry as well, so if we are going to find something else we are going to have to do a bit of digging.”
Thus far, it seems in this case that the WTO is relatively toothless. Mendel expressed his views on what could be done in future, to give the WTO more powers to enforce their judgements:
“The main reason for the ‘toothlessness’ is the economic and political disparities between the countries, and the fact that the larger countries can effectively take the weapons out of the hands of the smaller ones through parallel-track intimidation and uncertainty. There have been a number of suggestions, such as allowing countries to “trade” concessions granted in the nature of sanctions, but I think the simplest thing would be to authorise immediate monetization of sanctions, so that rather than having to identify sectors in which to retaliate and jump through all of those hoops, the non-compliant country would immediately owe the other country an amount of money, and it would be due without diminution. If all countries agreed to that in a treaty amendment, then it would be an enforceable financial obligation. That being said, it will never happen.”
“The main reason for the ‘toothlessness’ is the economic and political disparities between the countries, and the fact that the larger countries can effectively take the weapons out of the hands of the smaller ones through parallel-track intimidation and uncertainty. There have been a number of suggestions, such as allowing countries to “trade” concessions granted in the nature of sanctions, but I think the simplest thing would be to authorise immediate monetization of sanctions, so that rather than having to identify sectors in which to retaliate and jump through all of those hoops, the non-compliant country would immediately owe the other country an amount of money, and it would be due without diminution. If all countries agreed to that in a treaty amendment, then it would be an enforceable financial obligation. That being said, it will never happen.”
“At the very least, the smaller countries should show each other more solidarity at the WTO and work as a bloc to insist that the larger countries treat the smaller ones fairly. Unfortunately, it seems perhaps the time-tested divide and conquer strategy well prevails at the WTO, and despite our many attempts to get what you would think would be our natural allies to work with us, when push came to shove they all pretty much sat on their hands.“ added Mendel.
As industry counterparties watch the US market situation, Ciaran O’Brien at Ladbrokes stated that whilst “we don’t have any association with Antigua … we would however hope that over the coming years the draconian anti-gambling laws, such as those that apply in the US, are reviewed to enable consumers to access licensed, regulated services”.
As industry counterparties watch the US market situation, Ciaran O’Brien at Ladbrokes stated that whilst “we don’t have any association with Antigua … we would however hope that over the coming years the draconian anti-gambling laws, such as those that apply in the US, are reviewed to enable consumers to access licensed, regulated services”.
Conversely, Mendel, in addressing whether it is optimistic to wait for the US market to open, stated “no, I think the US is aiming to shut out all foreign competition, and Antigua is the only thing right now preventing this”.
An interesting twist in the story occurred when Antigua did not attend the 24th May WTO meeting. Antigua has requested the WTO to have this item on the agenda to be discussed on a monthly basis and then pulled out. Nufrat Nazeer at the WTO has confirmed that the item was not discussed at the meeting on 24th May. Does this mean that Antigua is now considering an exit from the battle? Or is this yet another stalling tactic taken by Antigua? Mendel explained that “the government felt that the point had been made for now and there wasn’t any further benefit in saying it again”.
An interesting twist in the story occurred when Antigua did not attend the 24th May WTO meeting. Antigua has requested the WTO to have this item on the agenda to be discussed on a monthly basis and then pulled out. Nufrat Nazeer at the WTO has confirmed that the item was not discussed at the meeting on 24th May. Does this mean that Antigua is now considering an exit from the battle? Or is this yet another stalling tactic taken by Antigua? Mendel explained that “the government felt that the point had been made for now and there wasn’t any further benefit in saying it again”.
This issue is enjoying greater attention amongst Antigua’s closest neighbours. As reported by the WTO in their meeting on the 24th April, Antigua is supported by the Organisation of Eastern Caribbean States. Jamaica has also encouraged the US as well as Antigua to come to a resolution. It can be argued, that besides the alleged lack of US will to negotiate, that the US is also continuing to breach its WTO obligations as it appears there isn’t another WTO member bringing prosecutions in the context of legally permissible business.
As for the implications for the principle of fair trade, in particular the prosecution of offshore operators permitted to transact under WTO rulings, Mendel commented: “I think this is probably the worst thing about our situation, and I am not sure too many WTO members really understand this. It is a horribly egregious act that if a small country did a similar thing to the Americans it would not be tolerated. We don’t really have the resources at this point in time to raise the profile of the case enough to make other WTO members aware of just how bad the situation is. What is even worse is that even as we were working hard, spending hours and thousands on working out a settlement with the US, they proceeded to indict Antiguan operators. Really awful.”
As for the implications for the principle of fair trade, in particular the prosecution of offshore operators permitted to transact under WTO rulings, Mendel commented: “I think this is probably the worst thing about our situation, and I am not sure too many WTO members really understand this. It is a horribly egregious act that if a small country did a similar thing to the Americans it would not be tolerated. We don’t really have the resources at this point in time to raise the profile of the case enough to make other WTO members aware of just how bad the situation is. What is even worse is that even as we were working hard, spending hours and thousands on working out a settlement with the US, they proceeded to indict Antiguan operators. Really awful.”
Antigua is a small country and as such the US may consider that it has little to lose by treading on its toes. Another option for Antigua, would be to recoup amounts due via the suspension of US firms’ intellectual property rights. This is an unlikely route to take as such an exercise might put Antigua on a black list of countries to do business with or in. The likely outcome for Antigua has been described by Mendel: “to me, at the very least Antigua should be entitled to the same treatment that Brazil got in the Cotton case—a large payment up front and annual payments until compliance. It is pretty much impossible on a pure fairness basis to distinguish between our case and that of Brazil. What would also be fair is a decent financial compensation package with a concession to allow Antiguan operators a fair chance to participate in the American on-line gaming opportunities as they continue to develop and expand.”
Mendel is hopeful that Antigua can attain all what is now due provided it opts for the authorised options; and also that a satisfactory outcome will be reached within the next 6 months.
Mendel is hopeful that Antigua can attain all what is now due provided it opts for the authorised options; and also that a satisfactory outcome will be reached within the next 6 months.