STATEMENT
BY
SIR RONALD MICHAEL SANDERS KCMG KCN
CHIEF FOREIGN AFFAIRS REPRESENTATIVE OF ANTIGUA AND BARBUDA
TO
THE DISPUTE SETTLEMENT BODY
OF THE WORLD TRADE ORGANISATION
IN GENEVA, SWITZERLAND
ON MONDAY, 21ST JULY 2003

Mr Chairman

Antigua and Barbuda is disappointed that since the last time this Body met on June 24th, the United States has not indicated a willingness to recognise the validity of our compliant and to settle this dispute.

We greatly value our relations with the United States and would have preferred not to have a dispute at all. But, my government is very mindful of its responsibility to our people to maintain their jobs and to defend our small and vulnerable economy in a highly competitive world.

In the circumstances, we are obliged to continue to seek the establishment of a panel to adjudicate our dispute.

Mr Chairman, my government would like to make it clear that since the meeting of this body on June 24th, careful consideration has been given to the remarks of the distinguished representative of the United States on that occasion.

One of the observations that she made was that the US ban on cross-border gambling was intended to protect its citizens, and particularly children, from risks related to betting.

I want to make two responses to this.

• First, underage gambling is prohibited by Antigua and Barbuda, and the prohibition is strictly enforced by an independent regulatory Commission which has legally defined Internet gaming entities as financial institutions. Internet gaming entities are subject to heavy fines and imprisonment for offences, which include money laundering, terrorism financing, fraud and other breaches of the law such as underage gambling. We explained this to the United States during GATS Article XXIII consultations held with the United States. During the consultations, we offered to implement any proposals that would strengthen our regulatory process even further.
• Second, the United States knows very well that the GATS rules do not prevent it from reasonably regulating an industry to address a legitimate public interest. The GATS rules do, however, prevent the United States from regulating in a discriminatory and trade-distorting manner.

The United States representative also stated that cross-border gambling and betting services are prohibited under U.S. law "from domestic and foreign service suppliers alike".

But, we would respectfully point out that a ban on the cross-border supply of services has a very different effect depending on whether you are inside or outside the borders of the United States. The GATS seeks to create equal conditions of competition for domestic and foreign service suppliers. In this context, it is not a reasonable argument to contend that a measure prohibiting cross-border supply has an equal effect on foreign and domestic service suppliers. After all, the US domestic service suppliers are not crossing any borders when they supply the US market to the exclusion of others who are outside US borders.

The United States further stated that "cross-border gambling and betting services are not within the scope of the U.S. specific market access commitments under the GATS".

During the GATS Article XXIII consultations, Antigua and Barbuda provided the United States with a detailed oral and written explanation of the legal basis for our interpretation of the US Schedule. We have received no explanation from the United States of its legal position, other than the flat denial that "cross border gambling and betting services are not within the scope" of its "specific market access commitments under the GATS". We have also not received any explanation as to why our interpretation could be wrong.

Finally the United States representative raised a number of procedural issues and stated that the Annex to our panel request contains:

• first, certain items that do not qualify as "measures";
• second, certain measures that were not included in the consultations request; and
• third, measures that do not relate to cross-border gambling and betting.

We would point out, Mr Chairman, that, in its report in the FSC case, the Appellate Body wisely held that:

"The procedural rules of WTO dispute settlement are designed to promote, not the development of litigation techniques, but simply the fair, prompt and effective resolution of trade disputes."

The Appellate Body has also found that the purpose of Article 6.2 of the DSU is to inform the defending party of the complaint so as to allow it to defend itself.

United States legislation on the cross-border supply of gaming services is complex and opaque. It appears that, even inside the United States, different authorities take different views on the precise interpretation of some of the specific rules.

In this dispute, however, the United States agrees with Antigua and Barbuda that the United States maintains a blanket prohibition on the cross-border supply of gaming services.

The United States has repeated that very clearly at the June meeting of this Body.

This blanket ban is precisely what we are complaining about.

In this respect we find it difficult to see how the United States can have difficulties in understanding what is at issue in this dispute. Nonetheless, Mr Chairman, Antigua and Barbuda is willing to try to answer any specific questions that the United States may have, just as we would welcome a US detailed and written explanation of what it does not understand about our panel request.

In the meantime, Mr Chairman, I must, once again, respectfully ask this distinguished Dispute Settlement Body to establish a Panel pursuant to Article 6 of the DSU.