Lawmaker Seeks Disclosure of Internet Gambling Trade Concessions
The U.S. Trade Representative may have granted trade concessions in the World Trade Organization Internet gambling dispute without needed congressional approval, the Safe and Secure Gambling Initiative said Wednesday. The possibility of congressional intervention in the settlement arose in a “Dear Colleague” letter circulated by Rep. Peter DeFazio (D- Ore.), now seeking disclosure of concessions made to the EU. The concessions resulted from a U.S. decision to withdraw online gambling services from its General Agreement on Trade in Services commitments, giving trading partners the right to seek compensation.
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The USTR recently denied on national-security grounds a Freedom of Information Act request seeking the agreement, DeFazio wrote. He criticized a “vague list” of adjustments of U.S. commitments on warehousing services, private technical testing services, private research and development services and postal services relate to outbound international letters. “We do not imagine a scenario in which these agreements could have national security implications,” he said. He wants the complete agreement with the EU, Canada and Japan and all adjustments, plus a description of any harm the concessions could do American businesses.
The USTR refusal to turn over negotiating documents isn’t odd, said Nao Matsukata, senior adviser for Alston & Bird and a former USTR official. Such documents always are classified to keep a country’s negotiating position secret, but usually are declassified upon reaching agreement, he told us. The U.S. is still thrashing out concessions with Antigua and Costa Rica, so the documents remain classified, he said.
DeFazio’s point about being kept in the dark involves the U.S. Constitution, which gives Congress oversight over interstate commerce, Matsukata said. The negotiating authority that lawmakers have given the administration in recent years let the USTR make trade agreements subject to oversight, he said. The authority expired last June, making unclear the USTR’s power to make deals, he said.
The USTR originally called its commitments to the EU legally binding -- ordinarily, that would require action by Congress -- later characterizing them as codifications of existing policy, Matsukata told us. That raises the question of whether congressional ratification is needed, which only Congress can answer, he said. DeFazio’s letter is one indication of lawmakers’ discussion of the matter, he said.
The deal is “meaningless” without congressional approval, since the Constitution bars administrators from unilaterally changing U.S. trade commitments, Lori Wallach, director of Public Citizen’s global trade watch division, said in December before the agreement was announced. And holding compensation talks behind closed doors compromises committees with jurisdiction over the matter, she said.
The USTR consulted extensively with Congress, private sector parties, state governments and the public as it clarified its WTO obligations so they explicitly exclude Internet gambling services, a USTR spokeswoman said. All modifications to U.S. commitments offered to trading partners fit with U.S. law and require no legislative changes, so the Administration can undertake them under its existing authority, she said.
The EU this week began investigating U.S. trade measures regarding foreign online-gaming companies that could lead to WTO proceedings (WID March 11 p1). The inquiry arose from a complaint by European online gambling operators that the U.S., before withdrawing its commitment to open its Internet gambling markets to trading partners, did selective enforcement against foreign operators while allowing U.S. operators to offer betting on horse racing (WID Dec 21/07 p3).