World Trade Organization Rules against U.S.

The World Trade Organization (WTO) recently dealt with a dispute illustrating the litigiousness that can follow globalization.  The United States has a trade agreement with the Caribbean nation Antigua and Barbuda.  Antigua and Barbuda accused the United States of blocking online gambling in violation of that trade agreement, which caused a loss of 3,500 jobs.  (While that sounds minor, the country has a population of only 90,000.)

The WTO agreed and ruled that Antigua and Barbuda could retaliate by suspending United States intellectual property rights to the extent necessary to recoup $21 million annually.  Antigua and Barbuda has indicated it will pursue this remedy if it cannot soon reach a financial settlement with the United States.

A key problem with the WTO’s ruling is that measuring the value of damages consisting of relaxed intellectual property protection is extraordinarily difficult.  This is especially true given that pirated material can be re-copied with ease and there is no way to tell how many times a single pirated work will be copied.  While the U.S. Chamber of Commerce has criticized the WTO’s ruling and claimed that it will have a chilling effect on business, Antigua and Barbuda view the ruling as vindicating its position that the United States was trying to bully a tiny trading partner.

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