Online Gambling Industry - A Story of European Horse Trading
Nowadays everything is negotiable, and everything has its price, even when it comes to free trade.
This appeared true again last Monday when the US offered to open its service markets for European businesses as a matter of compensation for lost revenues due to the blocking of foreign countries from their massive gambling industry.
The story all started when the tiny state of Antigua and Barbuda filed a complaint against the US for not living up to the World Trade Organization rules for free trade. After the complaint being declared legitimate the WTO ordered the US to liberalize the online gambling sector. As if it was common practice, the US neglected the WTO order and kept the sector shut for foreign businesses. This off course led Antigua to bring a new dispute case, this time requesting $3.4 billion for compensation.
When it came to the financial damage from missed economical opportunities for the continent of Europe, the United States had totally different plans. The offer of the US to grant the European Union access to the United States postal and courier, storage and warehouse, and R&D sectors, paid off. At least, it paid off for European businesses like Deutsche Post and TNT, which all of a sudden were presented fruitful economic opportunities.
Strangely enough, the ones that suffered the most from the US protective measures have not benefited at all from this intercontinental bargaining. The online gambling industry claimed that the European Union suffered a massive loss in their efforts to open up the multibillion US online gambling market. Share values fell dramatically in October 2006 due to the new US laws which made it illegal for credit card companies to process online gambling transactions, which virtually shut the gates for foreign businesses.
The WTO trade Commissioner Peter Mandelson stated that the US offer is not related with the case for liberalization of the US online gambling industry, and refused to estimate the value of the offer. Next to this the US trade representative refused to come up with in-depth information on the offer, however claimed that the deal provided the WTO members with economic potential that would be as valuable, if not more valuable, as the US online gambling market. Besides this agreement the US made similar deals with Canada and Japan.
A group of enterprises that claim to lose $4 billion in revenue every year, jointly represented by the Remote Gambling Association, believe the European Union's most important weapon in the negotiations was given away because of the deal. The CEO of the Remote Gambling Association, Clive Hawkswood, stated: "The WTO Commission can still press for the liberalization of the market, but the advantage of the outstanding negotiations has been lost." Peter Mandelson, the WTO Trade Commissioner, promised to persist in the battle for liberalization of the sector and trusts in the proposal of Barney Frank, Chairman of the US House Financial Services Committee, to give global competitors access to the online gambling sector.
In general it is quite positive that everything is negotiable, yet this does not go for free trade. Free trade is a principal which is unconditional, and this means that it is certainly not negotiable. It is at least to say remarkable that impeding free trade in one sector, can be justified by stimulating free trade in a totally different sector.