US-Antigua gambling dispute highlights defect WTO system

From IQsensato:

"The dispute between the United States (US) and Antigua and Barbuda has already made GATT/WTO history. Antigua challenged various US measures relating to gambling and betting services arguing that they were inconsistent with the US obligations under the General Agreement on Trade in Services (GATS). This was the first dispute arising under the GATS to reach the Appellate Body. It was also the first time that the GATT/WTO has adjudicated on the public morals defence, namely, whether a member can justify imposition of trade restrictions on the basis of the protection of public morals in its territory. Additionally, the case has resulted in a rare withdrawal of commitments under the GATS as the US decided to modify its GATS Schedule to exclude gambling and betting from its market access commitments...

WTO remedies fall short of what one might ask of an effective legal system. First, there is no compensation for past harm or loss. Second, compensation in the form of enhanced market access depends on the consent of the party that violated the rules; and, in any event, some WTO members do not have the capacity to use the compensatory enhanced market access. Third, retaliation is not optimal: WTO arbitrators have previously recognized that a member may find itself in a situation where it is neither realistic nor possible for it to retaliate for the full amount of the level of nullification and impairment in all of the sectors and/or under all agreements. Furthermore, as noted in Brendan McGivern’s commentary on the dispute, retaliation under the TRIPs Agreement is especially difficult for a number of reasons. One, regardless of the legality of the authorization from the WTO, violation of intellectual property rights might be frowned upon by other WTO members and the international community generally. Two, for some products, it might not be easy to act against the TRIPs rights of US rights holders without affecting the TRIPs rights of nationals of other WTO members. Three, given the absence of rules on valuation of suspension of intellectual property rights, it would be difficult to ensure that the retaliation does not exceed the authorized amount."