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OpEdNews Op Eds    H3'ed 10/13/17

Antigua and Barbuda's Message for America: "Pay Me What You Owe Me"

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Message Sean Bennett

Marathon Florida Destruction After Hurricane Irma
Marathon Florida Destruction After Hurricane Irma
(Image by CBP Photography)
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The U.S. has offered rebuilding assistance to Barbuda, a Caribbean island that was left devastated by Hurricane Irma. The devastation wrought by the storm left the island with no permanent population for the first time in over three hundred years. Yet even faced with the sheer scale of the wipeout, and hobbled by damages that make up more than 20% of its GDP, the nation of Antigua and Barbuda is holding firm and is providing a lesson to the world on how to keep the moral high ground in the face of tragedy.

Indeed, while Washington's offer was well received, Barbuda has one unalterable condition; the U.S. must pay the $273 million debt that the World Trade Organization (WTO) says it owes to the small Caribbean nation. The island state's ambassador to the U.S., Ronald Sanders, hopes that the debt -- a sum that accrued during a 14-year dispute over America's unfair restrictions on online gambling -- can assist in the reconstruction of Barbuda.

The ambassador's pointed response is understandable given the conditions in Barbuda, which is still without electricity and potable water. With up to 95% of Barbuda's infrastructure destroyed by the Category 5 storm, it is estimated that the rebuilding effort will cost somewhere in the realm of $250 million to $300 million. After witnessing the damage first hand, the U.N. Secretary General, Antà nio Guterres, has urged the international community to assist in the monumental task of rebuilding Barbuda. "I've just witnessed a level of devastation that I've never seen in my life," he said after surveying the damage in Codrington.

What Does Online Betting Have to Do with Rebuilding Barbuda?

In the years since the Internet entered the public domain, Antigua and Barbuda spearheaded the development of online gambling, an industry that quickly became a crucial sector in the country's economy. By 1995, Antigua and Barbuda had drafted and ratified the Free Trade & Processing Act, an investment and legislative framework that allowed online casino licensing. As a result, online gaming quickly grew into a lucrative source of revenue and jobs for the tiny Caribbean islands. However, the nation's burgeoning economic growth was cut short when the U.S. began enforcing strict measures restricting online gambling.

As Antigua and Barbuda's market share of the online gambling industry shrunk, the island state initiated proceedings with WTO, alleging that America's prohibition of cross-border gambling was in violation of the General Agreement on Trades and Services. In 2007, the body ruled against the U.S. and awarded Antigua and Barbuda a backdated payout of $21 million per year. But the U.S. -- a country that has long regarded itself as the champion of global norms and institutions -- virtually ignored the verdict.

In 2013, after years of non-compliance, the WTO took unprecedented steps to induce American cooperation. Specifically, the WTO gave Antigua and Barbuda full reign over U.S intellectual property, allowing the Caribbean state to legally distribute American films, books, TV shows, music and photographs without compensating the people and business that own the property. Although Antigua and Barbuda hasn't made use of the WTO-approved content piracy scheme, the WTO's decision continues to have profound repercussions on relations between the two countries. If the U.S. continues ignoring its debt obligations, 'cross retaliation' might be the only way that Antigua and Barbuda can challenge U.S. noncompliance.

To get an idea of what the online gambling industry could have become in Antigua and Barbuda, look no further than the extraordinary economic success of Malta -- a regional hub for online gambling, iGaming and e-sports. The online gambling industry, which makes up 12 percent of Malta's GDP, has reinvigorated Malta's economy, kick-starting a flourishing digital and financial services sector as well as providing employment opportunities for more than 9000 people. The Mediterranean nation's success stems as well from its strong consumer safeguards, which has encouraged many companies to set up shop there. Now, Antigua and Barbuda, still recovering from the devastation of one of two major islands, is in dire need of similar socioeconomic enrichment.

As Antigua and Barbuda assess the ruins left in Irma's wake, Washington's continued recalcitrance is quickly framing the U.S. as a miserly bully -- ignoring WTO decisions and refusing to pay what it owes. For the WTO, the debt dispute is quickly becoming a test of the organization's ability to obtain justice for small nations when powerful nations refuse to cooperate. Antigua and Barbuda's Prime Minister, Gaston Browne, has called America and the WTO to task, saying: "How can it be that the United States, the most powerful economy and county in the world, can so blatantly disregard the very trade rules that it demands be observed by other countries?"

As long as the debt dispute continues, there are no winners: Antigua and hurricane-wracked Barbuda face the prospect of economic retrenchment, America's international reputation will continue to suffer; and the WTO's institutional efficacy may be called into question. Nevertheless, domestic developments in America may yet yield positive results for Antigua and Barbuda's economy. With more and more states moving to legalize online gambling, the federal government's anti-gambling measures are quickly losing support. Now, Brandt Iden, a Michigan State Representative has hinted that Michigan may be joining Nevada, New Jersey and Delaware in legalizing online gambling.

As the online gambling sector -- an international industry and important source of government revenue -- continues to grow, the pressure on the federal government will only get worse. Describing Barbuda as "barely habitable," Prime Minister Browne has made it clear that Antigua and Barbuda need this process to pick up speed. With the country's economy hamstrung, there is only so long that Antigua can support the desperate and displaced population of Barbuda.

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I'm an expert in development economics and trade issues currently working in Washington DC.
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