The good people of Utah decided 110 years ago that gambling was one vice the state didn't need. So they outlawed it and later added electronic gaming to the ban. Now, Utah's right to make games of chance illegal has been shot down by the World Trade Organization.
WTO judges ruled last fall in a case brought by the government of Antigua and Barbuda that gambling regulations in Utah and most other states conflict with America's obligation not to discriminate against foreigners providing "recreational services." In ruling for the tiny Caribbean nation, which had charged that Utah's wager-phobia infringed on Internet gambling operations based in the islands, the WTO opened the door to millions of dollars in potential penalties. "It's not just gambling," warns Utah state representative Sheryl L. Allen, a Republican who chairs a multistate committee studying free trade deals. "The states are losing their authority in a lot of areas."
Since the power to regulate gambling is a state function, I wondered back in 2005 if the Federal Government overstepped its authority:
If the US loses its appeal at the WTO can Utah make a case in Federal court that the Federal government does not have the right to violate the States right in its treaty negotiations?
So far my states rights question is moot. Despite losing the WTO appeal, the Federal Government hasn’t infringed on a states' ability to regulate gambling. The question now is “Does the WTO have the right to violate US intellectual property laws?” Richard Fernandez, of the Belmont Club, brings us up to speed with the latest.
The New York Times has details of this interesting story. The World Trade organization (WTO) ruled the US violated Antigua's rights by prohibiting Americans from gambling over Internet sites based in Antigua. Now the lawyer for Antigua is asking the WTO to compensate the island nation by allowing it to set aside US intellectual property laws and to distribute copies of American music, movie and software products, among others with impunity.Fernandez provides an excellent comparison of this international trade dispute with the disparities of enforcement in other treaties.
But lawyers are clever and the loophole cited by the New York Times makes it possible for Antigua to demand the right to pirate US intellectually property -- under the rules -- and "morally" too because a mechanism which allowed the US to use is preponderant economic power would be "unfair". Where have we seen this before? Pretty much everywhere. While not exactly the same, the Antigua decision has structural similarities to the way some international lawyers think about the Geneva Convention and human rights legislation. The US is "bound" by the letter of the law, and if a terrorist mass murderer can find a legal loophole to escape then he is "entitled" to use it. But the Convention is not obeyed by weaker parties because it is impractical to enforce it. Just as pirated DVDs can be found being openly sold in many street corners in Asia without being similarly available in places like Australia, countries with well-functioning legal systems find themselves at a disadvantage compared to countries with no enforcement. In the area of human rights, for example, America has courts before which lawyers can appear. Al-Qaeda has a cave in Pakistan where accommodations are notoriously poor. The US will obey a legal judgment. Legal judgments against al-Qaeda are an exercise in futility. Who will lawyers sue? Under these conditions the full weight of international law will always come down hardest on the most law-abiding.
You’ll want to read his whole analysis. Read the New York Times article also if you want to know why lawyers are held in such high esteem.
Ultimately the NYT article points out that the WTO is damned if they do and damned if they don't. If they don't enact a penalty to back up their decision, they'll lose their credibility. If they do, the backlash from Americans may well destroy the WTO anyway.
Originally posted in UNCoRRELATED 23 August 2007
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