The US has opened the gates to its services markets, a move which may cost it up to $100 billion in trade business. This comes in the wake of a landmark World Trade Organisation ruling, after the US blocked foreign gambling companies from trading.
Last year Washington disallowed US financial institutions from accepting money from foreign gambling companies. This prompted a string of compensation claims from the EU, Antigua, Macau, Canada and Japan, who have all been hit by what they call a discriminatory policy.
Ideally for the big gaming companies including Bwin and PartyGaming the US would have removed the Unlawful Internet Gambling Enforcement Act of 2006 entirely.
However the EU has now agreed with the US to replace the value of trade lost in this industry sector, by being given access to provide services in other sectors.
This includes courier and postal services, research and development and storage and warehousing openings.
A European Commission official said: "This deal is the result of negotiations within the WTO framework and compensates us for the loss of trading opportunities in the gambling sector. We have accepted the most meaningful package in that regard."
For some of the gaming companies this was bad news as they were forced to sell or give up the US branch of their companies, including SportingBet who sold for only $1.
Senior policy adviser Naotaka Matsukata, at Alston & Bird in Washington said, "This could put a question mark on the credibility of the WTO system. The US announced that it was withdrawing from its GATS obligations and then it negotiated a way out by offering compensation.
What stops another country like China doing the same thing? They may decide that they do not want to keep some of their WTO obligations and offer to pay their way out as well."
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