Antigua as David, United States as Goliath, take their case to the WTO

Paul Blustein's article in the Washington Post dated tomorrow is charming for several reasons. The oddity of Antigua's trade law case against the United States, over U.S. prosecution of an internet gambling operation, helps to illuminate how trade agreements work. In discussions with critics of trade agreements, I often point out that the agreements threaten U.S. sovereignty less than one might think. The World Trade Organization can't generally enforce penalties in U.S. courts. It can merely permit the plaintiff country to abrogate it's own free trade commitments in response, which seems entirely reasonable. You can see how mild a restriction on sovereignty the WTO ordinarily imposes when you imagine how little it harms the United States if Antigua is permitted to restrict U.S. imports in retaliation. (The Antiguan proposal to start exporting American music and video without paying royalties is a clever twist, however).

With droll understatement, Blustein recounts how the Bush administration's first and completely fair-minded reaction was to make clear that all U.S. internet gambling is illegal and hence there is no unfair restraint of trade in prosecuting Antiguan internet gamblers also. After all, the conservative administration is against gambling and other vices anyway, right? The catch is that the leadership in Congress is even more corrupt than it is conservative, and the horse racing industry has convinced powerful legislators not to ban internet gambling on horse races. So, the administration's second and much less noble response is essentially to lie to the WTO about the state of U.S. laws covering internet gambling, in hopes that the world organization would not dare to rule for David while Goliath stands watch.

Beyond the world of gambling, the controversy's implications for agriculture policy caught my eye:

A frequent irritant in international relations is that small, weak countries such as Antigua feel run over by big, rich countries such as the United States. That's especially true in global trade. For instance, developing countries say their destitute farmers get the short end of the stick because of the subsidies and protections that rich governments give their farmers. Just last week, negotiations to redress such grievances collapsed.

The WTO, the body that referees global commerce from its offices in Geneva, claims to play equalizer: Its Web site notes that small countries have beaten bigger ones in its trade courts. A win for Antigua would improve the WTO's image of requiring all nations, Davids and Goliaths alike, to follow the rules.