The Hindu Business Line : Gambling services of US out from services offer commitments of WTO

New Delhi, Dec. 21 The latest agreement in Geneva between the world’s trade majors, the US and the European Union (EU), brokered by the World Trade Organisation (WTO), to keep continental gambling and betting companies out of the lucrative American gambling market, has brought to the fore how the world’s free trade champion, the US, could be protectionist when it involves its own industry.

A terse EU statement issued in Brussels on December 18 said the EU and US agreed on a compensation package to be offered by the US in response to its withdrawal in WTO of GATS (General Agreement on Trade in Services) commitments offered as part of the world trade deal way back in 1994 on gambling and betting services, including on-line gambling.

US concessions

A bilateral agreement signed on December 17 has provided the EU service suppliers with new trade opportunities in the US postal and courier, research and development, storage and warehouse sectors.

The US also made concessions in the testing and analysis services sector. This follows negotiations initiated by the US on May 8 when the US declared its intention to recant its WTO commitments on gambling and betting services under the GATS.

The GATS permits members to modify or withdraw commitments, provided that they negotiate offsetting compensation so that the overall level of its market access remains the same.

The EU sought compensation to make up for the loss of trading opportunities in the US gambling sector, including the US internet gambling market. EU said once the WTO certifies the agreement, gambling services would no longer be covered by the US’ WTO commitments.

Trade policy analysts here say that when it comes to safeguarding the interests of its industry the US has worked assiduously using the provisions of the WTO to wriggle itself out of the commitments it made in the past and this deal follows US legislation last year that made it illegal for credit card companies to accept charges for online gambling, thereby effectively shutting the market to foreign companies.

That is why European gambling companies contend that even as the compensation agreement for the withdrawal of market access by the US does not address the discriminatory and protectionist US practices against European and other foreign online operators to trade in gambling services that supervened before the withdrawal of the commitment.

Trade tirade

Even as this trans-continental trade tirade continues at a time when the GATS negotiations in the WTO still continue as ‘work in progress’, developing countries that are asked to provide greater market access for non-agricultural products or industrial goods wonder whether they have any such leeway within the WTO system to protect themselves against free trade without quid pro quo compensation to pay to the developed world.

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