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Statement of Deputy United States Trade Representative John K. Veroneau Regarding U.S. Actions under GATS Article XXI

May 03, 2007


- The Office of the United States Trade Representative today informed the World
Trade Organization (WTO) it intends to clarify its WTO commitments with respect
to Internet gambling services.

The United
States is invoking procedures under Article XXI of the
General Agreement on Trade in Services (GATS) in order to clarify its commitment
involving “recreational services,” which was interpreted in the course of WTO
dispute settlement as including a U.S. commitment to allow Internet
gambling services. 

“U.S. laws banning interstate gambling
have been in place for decades.  Most WTO Members have similar laws. 
Unfortunately, in the early 1990s, when the United
States was drafting its international
commitments to open its market to recreational services, we did not make it
clear that these commitments did not extend to gambling.  Moreover, back in
1993 no WTO Member could have reasonably thought that the United States
was agreeing to commitments in direct conflict with its own laws,” said Deputy
United States Trade Representative John K. Veroneau.

“Neither the United States nor other WTO Members noticed
this oversight in the drafting of U.S. commitments until Antigua and Barbuda
initiated a WTO case ten years later.  In its consideration of this matter,
the WTO panel acknowledged that the United States did not intend to adopt
commitments that were inconsistent with its own laws.  However, under WTO
rules, dispute settlement findings must be based on the text of commitments and
other international documents, rather than the intent of the party.  The
States strongly supports the rules-based
trading system and accepts the dispute settlement findings.  In light of
those findings, we will use WTO procedures for clarifying our


In the course of a dispute originally filed by
Antigua and Barbuda in 2003,
the United States’ GATS
schedule was found to have included a market access commitment covering Internet
gambling based outside of the United States. This finding was a
result of imprecision in the drafting of the 1994 U.S. GATS schedule, combined
with the application of formal treaty interpretation rules under which a
country’s intent is not determinative.  In fact, as even the WTO panel
recognized, gambling or betting services are generally prohibited or highly
restricted in the United States for reasons of public morality, law enforcement
and protection of minors and other vulnerable groups, and the United States
never intended to make a GATS commitment covering gambling. 

The dispute has now completed the compliance phase, and
the report of the compliance panel is scheduled to be adopted by the WTO Dispute
Settlement Body (DSB) on May 22, 2007. 

In light of these developments in the WTO dispute, the
United States has decided to
make use of the established WTO procedures to correct its schedule in order to
reflect the original U.S.
intent – that is, to exclude gambling from the scope of the U.S. commitments
under the GATS.  The GATS provides that when a Member modifies its services
schedule, other Members who allege they will be affected by this action may make
a claim for a compensatory adjustment to other areas of the GATS schedule. 
However, since no WTO Member either bargained for or reasonably could have
expected the United
States to undertake a commitment on gambling,
there would be very little, if any, basis for such claims.