US government illegally withholding terms of WTO gambling deal

George Bush administration is illegally withholding details of its World Trade Organization (WTO) online gambling deal with the European Union claims a lawsuit filed yesterday in the U.S. District Court for the District of Columbia.

Following a 2007 WTO ruling which authorized trade sanctions against the United States for failing to confirm its gambling laws to WTO rules, the Bush administration announced that it would remove the gambling sector from its WTO obligations.

Although the Office of the United States Trade Representative (USTR) has successfully negotiated a settlement with the EU and other countries in compensation for withdrawing from its WTO obligations, it has refused to disclose details of the settlement citing national security concerns.

In December 2007, journalist Ed Brayton submitted a request under the Freedom of Information Act (FOIA) to the USTR, requesting the full text of the settlement between the USTR and the EU regarding America’s gambling laws. Brayton’s FOIA request was denied by the USTR on the grounds that the information was classified as ’foreign government information’, and duly withheld pursuant to Executive Order 12958 in the interest of national security.

“Americans have a right to know what kinds of trade concessions the U.S. government is granting other countries, especially when those deals have a significant impact on domestic policy and may be worth billions of dollars,” said Bonnie I. Robin-Vergeer, a Public Citizen attorney representing Brayton. “The Bush administration’s decision to withhold the agreement under the Freedom of Information Act has more to do with its desire to prevent public and congressional scrutiny of the settlement before it is enshrined in a new WTO schedule than it does with national security. FOIA requires the agreement’s release.”

Submitting new U.S. service sectors to the WTO’s authority would constrain U.S. federal, state and local government’s ability to regulate in these sectors and expose existing and future domestic policies in these sectors to challenge before WTO tribunals, as occurred with the U.S Internet gambling ban.

The USTR has also come under pressure from Congress to release details of the settlement, which was reached without their approval. In March, Congressman Peter DeFazio circulated a letter to all members of Congress, encouraging them to join him in calling on the USTR to provide details of the settlement.

„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 treaty,“ said DeFazio in his letter.

To modify its schedule of commitments in the WTO’s General Agreement on Trade in Services (GATS), the U.S. was required under GATS Article XXI to negotiate agreements or else proceed to arbitration with affected WTO members to compensate them for lost revenues as a result of the removal of the gambling and betting sector from the schedule of U.S. WTO commitments.

Compensation talks behind closed doors yielded the U.S. settlement with the European Union, along with other WTO members. The U.S. offer to commit new sectors of the U.S. economy to WTO jurisdiction – and thus to guarantee access under favourable terms by foreign firms – is believed to be worth billions of dollars and may have serious implications for U.S. domestic policy. However, neither Congress nor the U.S. public can know the details of the agreement and whether it is in the public interest unless it is released.

The suit asks the court to find that the USTR is illegally withholding the settlement agreement and to order the agency to provide Brayton a copy of the agreement.