A long-running dispute between Antigua and Barbuda and the United States over gambling services has reached a critical point. In a letter to the WTO, the Caribbean nation warns that unless the US either stops blocking or compensates its gambling services, it will lift protection of US intellectual property rights in 2017.

For years, the small Caribbean country of Antigua and Barbuda had a flourishing gambling industry, with an estimated 5% of all countrymen working in gambling-related companies.

However, measures taken by central, regional and local authorities in the US seriously affected the cross-border supply of gambling services, with Antigua’s High Commissioner to London stating that they had subsequently shrunk “to virtually nothing.”

In desperation, Antigua filed a dispute at the World Trade Organization (WTO), which it won. A 2005 ruling by the WTO found that denying Antiguan gambling companies access to the US market violated free-trade.

In 2007 the WTO ramped up the pressure, granting Antigua the right to suspend U.S. IP rights up to $21 million annually. With little progress made in the dispute, in 2013 Antigua threatened to launch its own ‘pirate’ site, which prompted a sharp response from the US.

“If Antigua actually proceeds with a plan for its government to authorize the theft of intellectual property, it would only serve to hurt Antigua’s own interests,” the U.S warned.

After three years without such a site appearing, a release from the WTO’s Dispute Settlement Board (DSB) indicates that Antigua and Barbuda has finally run out of patience and is ready to suspend protection of US intellectual property rights. A letter from a government representative to the WTO explains the situation.

“It has been 12 long years since an Arbitration panel, established under the rules and procedures of this body, issued a decision that found the United States of America in violation of international obligations under the General Agreement on Trade in Services.

“Over that entire 12-year period, my small country with a Gross Domestic Product of just $1 billion has been deprived of trade revenues which now exceed $250 million. For my country’s tiny economy, $250 million is a meaningful sum of money,” the statement reads.

Pointing out that $250m represents only 0.0003% of just one year of GDP for the US, the letter adds that over the past 12 years, the US has enjoyed a trade surplus with Antigua and Barbuda of more than $1 billion.

“Over all this time my government has patiently engaged in good faith consultations with the Government of the United States in the genuine hope that the harm done to our economy by US action would be repaired through a settlement that recognizes justice and fairness.

“Alas, the US has not been able to propose terms for a settlement that would even remotely compensate for the harm that has been done to our economy and continues to impact it negatively.”

The statement from Antigua and Barbuda adds that while the US continues to defy WTO rulings, it remains the most active user of the institution’s Dispute Settlement System, something which threatens to undermine the integrity of the WTO.

“[T]he protracted failure by the US to settle this matter, despite the fact that it is not compliant with WTO rules, has the potential to collapse confidence in the efficacy and credibility of the rules-based trading system.

“Antigua and Barbuda, one of the smallest economies in the world is yet to reap any benefit from having prevailed against the United States through the rulings and recommendations of the DSB,” it adds.

In a final warning that the gloves are about to come off, the statement concludes that time is running out and in a matter of weeks, unless something is done, United States intellectual property will receive no protection

“My government has almost exhausted its patient efforts to reach a settlement with the US. This is regrettable since, on our side, we have always conducted our relations with the US at a high level of regard and cooperation.

“We advise this body that we are now engaged in a final effort with representatives of the US Trade Representative’s Office to reach an agreed settlement. We hope that a sense of right will prevail. But, we cannot go beyond the end of this year.

“In light of the above, Antigua and Barbuda now informs the DSB that, if an appropriate and beneficial settlement is not reached with the US by year-end, the government will be compelled to take action to enforce the suspension of copyright on the sale of US intellectual property, consistent with the award of the DSB.”

The United States says it remains committed to resolving the matter but is “disappointed that Antigua and Barbuda had characterized the US as having acted in bad faith when the US had taken a constructive approach to resolving the matter.”

The US said it had put forward a package of concessions but Antigua and Barbuda are the only WTO member blocking the proposals.

Attorney Mark Mendel, a lawyer in Ireland who previously led the fight for Antigua at the WTO, informs TorrentFreak that a number of options remain open for the Carribean country.

“A couple of years back, when Antigua last came very close to implementing the remedies given them by the WTO, we had identified a significant number of areas where the suspension of United States intellectual property rights would, we had assessed, have had the desired effect,” Mendel explains.

“By ‘desired effect’, I mean the purpose of the remedies as given in the WTO rules – to put substantial domestic pressure on a recalcitrant government from a completely ‘innocent’ sector of the economy so as to encourage the government to comply with WTO rulings or at least agree a reasonable settlement. Since that time, all of those very well considered options exist, as do a few more that might even be more promising.”

Mendel says that since the remedies have been approved by the WTO, technically there will be no ‘pirating’, and whatever the Antigua and Barbuda government decides to do will be in compliance with the law.

“The only party in violation of International obligations in this dispute is the United States and I have all confidence that Antigua will continue to conduct itself in accordance with the agreed rule of law,” Mendel concludes.

The next meeting of the WTO’s Dispute Settlement Board is scheduled for mid-December. Whether any progress will be made to end the 12-year dispute remains to be seen but if not, 2017 could be an eventful one for pirates of the Carribean.

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The full letter Antigua & Barbuda sent to the WTO is available here (pdf).