Congressman Calls for US to Provide Details of WTO Internet Gambling Settlement

Congressman Peter DeFazio (D-OR) called for the U.S. Trade Representative (USTR) to disclose trade concessions made to foreign trading partners without Congressional approval.

DeFazio’s inquiry raises the possibility of Congressional intervention to void new market access commitments granted by USTR to the European Union and other complainants as compensation for a United States trade violation regarding Internet gambling.

In a letter circulated to all members of Congress last week, DeFazio encouraged his colleagues to join him in calling for the USTR to provide a copy of the concession agreement between the United States and the European Union.

The USTR recently rejected a Freedom of Information Act request for the same document, claiming that it was classified for national security reasons. “There is a concern that the USTR may have been ambitious in its use of a ‘national security’ classification to avoid any publicity of which new business sectors are to be subject to the GATS (General Agreement on Trade in Services) treaty,” said DeFazio’s March 6 letter.

Congressman DeFazio’s request suggests that the Administration’s unilateral action to attempt to resolve the WTO Internet gambling dispute is in jeopardy. “The issue will be whether the USTR abused its authority by granting new market access to the EU without first securing the consent of the trade committees in Congress,” said Nao Matsukata, formerly Director of Policy Planning for USTR Robert Zoellick. “Ultimately, this could invalidate the deal with the EU and cause various WTO Members to revisit the issue of fair compensation from the United States."

DeFazio’s request follows a contentious trade dispute over Internet gambling, in which Antigua challenged the regulation of Internet gambling in the United States. The European Union announced earlier this week that it will open an investigation into a possible international trade violation by the US on this issue, based on a Trade Barriers Regulation complaint filed by the Remote Gambling Association (RGA), an organization that represents the largest remote gambling companies in Europe.

RGA claims the US is in violation of international trade law by threatening and pursuing criminal prosecutions, forfeitures and other enforcement actions against foreign Internet gaming operators, while allowing domestic U.S. online gaming operators, primarily horse betting, to flourish.

Legislation introduced by Representative Barney Frank (D-MA), the Internet Gambling Regulation and Enforcement Act (H.R. 2046), would regulate Internet gambling and resolve the international trade dispute.

“Rather than paying out millions in trade concessions, which would have an adverse impact on the American economy, the US should embrace the legislative solution presented by the Frank bill, which brings the U.S. into compliance by regulating Internet gambling and creating a level playing field among domestic and foreign Internet gambling operators,” said Jeffrey Sandman, spokesperson of the Safe and Secure Internet Gambling Initiative.

He added, “Congress should have been consulted before the US agreed to these trade concessions. We hope that Mr. DeFazio’s colleagues will join him in demanding more transparency, communication, and consultation from the Administration on Internet gambling. A non-discriminatory market for Internet gambling in the United States will restore integrity to the international trading system.”