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The third point relates to the panel’s treatment of the public morals exception. Because the United States did not engage in consultations with Antigua on alternatives to a complete ban, the panel found that the ban is not truly “necessary.” Yet, if the U.S. can point to a sufficient nexus between its ban and public morals, and if Antigua cannot come up with an alternative that is less trade restrictive and equally meets U.S. needs, it is hard to see why the ban is not necessary and why further consultations were required. The indication that the U.S. may have acted tougher on foreigners than on domestic suppliers, though apparently true, does not necessarily demonstrate a clear pattern or practice of bias. More generally, the case shows that allocating the burden of proof to the defendant, here the U.S., for all elements under a WTO exception is problematic. The notion of burden of proof normally applies to factual issues, not to legal rules or exceptions. In this case, once the U.S. has offered a prima facie case of “necessity”, the burden could reasonably be placed on Antigua to come up with a valid alternative to the ban or to prove a consistent practice of its biased enforcement.
At the same time, this latest WTO ruling need not be seen as a serious encroachment by the WTO on U.S. sovereignty. Even if the panel ruling were upheld on appeal, the U.S. can easily bring its ban on internet gambling in line with WTO rules. All it needs to do is to sit down with Antigua and in good faith try to see whether there is any alternative (such as strict regulation) to a complete ban. Given its tough stance at home (once again, the U.S. bans internet gambling also within the U.S.), it is unlikely that any such alternative is available. The other thing the U.S. would need to do is to go more forcefully after U.S.-based infringements. If it does these two things, the U.S. ban will be excused. Hence, even on the panel’s reading, it would be relatively easy for the U.S. to convert this WTO ruling from one finding protectionism to one recognizing the importance of moral values.
Finally, if necessary, the United States can always re-negotiate its GATS commitments and withdraw the one on internet gambling (GATS Article XXI). All it needs to do is offer equivalent compensation or accept reciprocal trade retaliation by Antigua.
About the Author
Joost Pauwelyn is Associate Professor of Law at the Duke University School of Law. From 1996 to 2002 he worked as a legal officer with the WTO Secretariat. Joost is the author of Conflict of Norms in Public International Law: How WTO Law Relates to Other Rules of International Law (Cambridge University Press, 2003).
[1] Panel Report on United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services (complaint by Antigua and Barbuda), WT/DS285/R, circulated November 10, 2004, available at http://www.wto.org/english/tratop_e/dispu_e/285r_e.pdf._________________________________________________________________________
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