On Tuesday, we wrote about how the US was paying off the EU, Japan and Canada over a trade dispute around online gambling. The real point was to get these three to back off from putting pressure on the US to abide by free trade agreements, which effectively required the US to allow online gambling as long as it was hosted in other countries. It's quite a shame that these countries basically accepted money to let the US get out of agreements it had made -- and many are beginning to point out how ridiculous the whole situation is, and how it's likely to harm future US trade agreements around the world. All for the sake of preventing people from being able to play a little online poker.

Related to this, bankers and bank lobbyists are trying to explain to US politicians that upcoming rules concerning online gambling are impossible to abide by. As you may recall, back in October, the US approved new legislation that would put the liability on banks to prevent money from being used for online gambling. Beyond the ridiculousness of trying to stop people from gambling online if they choose to do so, this particular law means that banks need to figure out what money is being used for online gambling and try to prevent such uses. How? Politicians don't bother to go that far. Meanwhile, I hear that the gov't continues to make good money from state lotteries...

For quite some time now, we've covered the ongoing dispute between the US and Antigua over the fact that the US's ban on online gambling violates free trade agreements between the two countries. While the US has tried to unilaterally change those agreement to keep gambling out, the WTO has repeatedly made it clear that the US was at fault (even though the US has pretended otherwise). Either way, the US knew that it could simply ignore Antigua, as the tiny country couldn't do much to hurt it (even if it moved forward on its plan to become a piracy haven for digital content. However, earlier this year, there were rumblings that the EU would get involved on Antigua's side, putting a lot more pressure on the US. However, it appears that US politicians and diplomats made quick work of that signing new agreements with the EU, Canada and Japan to keep those three out of the way, leaving the dispute between the US and Antigua, with much less powerful countries like Costa Rica and Macau backing Antigua's position. Not surprisingly, online gambling firms in the EU aren't pleased that the powers that be in the EU rolled over like this -- and neither are folks in the US who still don't understand why it's okay for them to buy a lottery ticket, but they can't play a little poker online.

We've covered the long and detailed saga of Antigua fighting the US via the WTO, but the short summary is this: Antigua claims that the US is violating a free trade agreement in banning online gambling (many online gambling firms are in Antigua). The WTO agreed with Antigua and the US proceeded to ignore the ruling. The WTO again sided with Antigua... and the US pretended the WTO had sided with the US... and again ignored the ruling. This has happened a few more times, with the US eventually unilaterally changing the terms of the free trade agreement -- which didn't satisfy either the WTO or Antigua. Of course, with Antigua being such a small country there has been little in the way of ramifications for the US for ignoring the ruling. That's why Antigua is now pushing for the right to ignore US copyrights and patents as a remedy. However, there may be an even more persuasive remedy. Back over the summer, the EU indicated that it might start siding with Antigua in the dispute -- and it's a lot more difficult for the US to simply ignore the EU. To make the situation even more fun, the latest news is that gambling firms in the EU are pushing for $100 billion in damages from the US. That's certainly an unlikely number, but it's going to get plenty of attention either way. If the EU (and Japan, apparently) really do take Antigua's side in this, the US may finally be forced to acknowledge that it lost. However, it still seems quite unlikely that it will stop the ban on online gambling any time soon.

Since 2003, we've been following the saga of Antigua's fight against the US in the World Trade Organization. Basically, Antigua argued that the US's ban on online gambling violated the free trade agreement the two countries had signed -- as it blocked online gambling sites based in Antigua (of which there are a bunch). Since then, the case has been fun to watch if only for how the US has responded to it. The WTO ruled in favor of Antigua at which point the US basically ignored the WTO, despite the WTO occasionally making angry noises. Then, there was the time that the US went so far as to declare that the WTO had reversed that original ruling on appeal... but the details showed that the US was making up that claim and the WTO was still supporting Antigua. Earlier this year, after the WTO started stomping its feet again, the US responded by saying it was simply (unilaterally) going to change its free trade agreement with Antigua, so that online gambling wasn't included. Obviously, Antigua finds that solution quite troublesome.

Back in early 2006, however, a few people began buzzing about an idea that Antigua could use to force the US to pay attention: become an WTO-backed ignorer of US copyright law. Since the US knew it could effectively ignore Antigua over online gambling, the idea was that Antigua should simply say that if the US won't support its free trade agreement, then it would start ignoring US copyright laws, and would then (with WTO-backing, mind you) allow modern versions of all sorts of copyright-violating services to prosper. We didn't think that Antigua would seriously go in this direction, but as a new NY Times article makes clear it's exactly what Antigua is now pushing for. Of course, the real hope is that in doing so, the Big Copyright players will force the US government to back down on the gambling issue. However, it might be a lot more interesting to see what would happen if Antigua really did become the protected legal home of more modern versions of (the old) Napster, my.mp3.com, the Pirate Bay, Allofmp3.com and others. Of course, as reader OKVol points out to us, the real irony here is that in potentially ignoring copyright monopolies, Antigua may be getting closer to real free trade than in living up to the terms of the free trade agreement between the two countries.