E.U. Commissioner Mandelson Says Change U.S. Regulation or Compensate Europe to Resolve Internet Gambling Trade Dispute

    WASHINGTON, Nov. 9 /PRNewswire-USNewswire/ -- The potential $100
 billion trade dispute between Europe and the U.S. over the fast-growing
 online gaming industry heated up this week when Europe's trade director
 came to Washington and stated that the U.S. Congress should either open its
 market to overseas operators or compensate Europe for blocking the American
 gambling market to European operators.
 
     "When a member of the W.T.O. defaults on its commitments, compensation
 is due," said Peter Mandelson, European Union Trade Commissioner in an
 interview with Reuters. "That's the case of online gambling."
 
     Mandelson's comments came in the context of an increasingly contentious
 trade dispute over online gaming resulting from Antigua's World Trade
 Organization victory over the U.S. earlier this year. After the W.T.O.
 ruled that the U.S. had violated trade rules in barring Antiguan online
 gaming operators from the U.S. market, the U.S. withdrew its W.T.O.
 obligations with regard to free trade in the gaming area.
 
     The U.S. withdrawal - something that never before had happened in the
 12-year history of the W.T.O. - allows Europe and other countries to demand
 trade concessions up the size of the entire sector on an annual basis.
 Because the U.S. gaming industry is worth $100 billion, the E.U.
 theoretically could seek that amount in trade concessions. Already, the two
 parties have agreed to extend settlement discussions twice because they
 could not agree on the size of the concessions.
 
     If the parties cannot settle the matter between themselves, the E.U.
 could demand a binding arbitration before a W.T.O. panel. Separately,
 Antigua is involved in an arbitration with the U.S. to determine the size
 of the compensation due it. Other countries seeking compensation include
 India, Costa Rica, and Canada.
 
     Legislation introduced by Representative Barney Frank (D-MA), the
 Internet Gambling Regulation and Enforcement Act, would regulate Internet
 gambling and possibly bring the U.S. into compliance with W.T.O. rules by
 creating a level playing field among domestic and international operators.
 
     "I think (Frank) takes a fair-minded, common sense approach to this and
 we look forward to that being effective legislation," said Mandelson.
 
     Mandelson made his comments during a visit to Washington, D.C. this
 week for meetings on "Transatlantic Economic Cooperation." During the
 visit, he met with U.S. Trade Representative Susan Schwab over compensation
 owed to the E.U. and other countries following the U.S. withdrawal of
 services trade concessions in the W.T.O. related to gaming. Mandelson also
 met with Representative Frank to discuss possible legislative solutions to
 the trade dispute.
 
     Trade experts applauded E.U. Trade Commissioner Peter Mandelson's
 comments and visit. "Mandelson's visit signals a new chapter in the
 resolution of the W.T.O case," said Nao Matsukata, formerly Director of
 Policy Planning for USTR Robert Zoellick and now a Senior Advisor for
 Alston and Bird LLP. "His willingness to meet with Chairman Frank suggests
 that Mandelson is open to finding a legislative solution to the problem.
 The meeting today initiated a mutually supportive effort to resolve the
 unfortunate decisions of the United States to withdraw from its GATS
 commitments, and should help create positive momentum for the Frank
 legislation on Capitol Hill. Next steps should include closer consultations
 between congressional staff and Mandelson and his staff."
 
     "The U.S. Congress is seeking to regulate online gambling in a
 competitive and fairly taxed environment that encourages the participation
 of responsible companies," said Lode Van Den Hende, a trade expert in
 Brussels who works closely on cases involving the E.U. "It is possible for
 U.S. legislation to create strong consumer protections, facilitate consumer
 choice, and provide durable tax revenues for the future. Since the U.S.
 Trade Representative's sole interest seems to be to continue to violate
 U.S. treaty obligations under the WTO, it is incumbent upon the E.U. to
 work directly with the U.S. Congress to develop a responsible solution."
 
     The W.T.O. ruling that U.S. laws discriminated against foreign
 operators has financial ramifications far beyond the gaming industry
 itself. It wiped out billions of dollars from the balance sheets of
 European institutional investors, pension funds, and financial services
 companies as well as affecting the many supplier industry sectors to the
 gaming industry.
 
     Several key W.T.O. partners of the U.S. have already expressed concern
 over the broader impact of USTR's decisions on global trade. "At a minimum,
 Washington's actions call into question the United States' credibility in
 current W.T.O. negotiations for greater trade liberalization," Matsukata
 said. "It will be readily apparent to significant economies such as China,
 India, and Brazil, that the United States seeks to create one standard for
 its trading partners, and another for itself. This risks setting a
 precedent in the W.T.O. that would ultimately prove harmful not only to the
 global, rules-based trading system, but also to the long term ability of
 the U.S. to remain competitive."
 
     About Safe and Secure Internet Gambling Initiative
     The Safe and Secure Internet Gambling Initiative promotes the freedom
 of individuals to gamble online with the proper safeguards to protect
 consumers and ensure the integrity of financial transactions. For more
 information on the Initiative, please visit www.safeandsecureig.org. The
 Web site provides a means by which individuals can register support for
 regulated Internet gambling with their elected representatives.
 
 
 
 
 
 
 

SOURCE Safe and Secure Internet Gambling Initiative