From the Award:
6.1 For the reasons set out above, the Arbitrator determines that the annual level of nullification or impairment of benefits accuing to Antigua in this case is US$21 million and that Antigua has followed the principles and procedures of Article 22.3 of the DSU in determining that it is not practicable or effective to suspend concessions or other obligations under the GATS and that the circumstances were serious enough. Accordingly, the Arbitrator determines that Antigua may request authorization from the DSB, to suspend the obligations under the TRIPS Agreement mentioned in paragraph 5.6 above, at a level not exceeding US$21 million annually.
The U.S. must be pretty happy with that amount. I haven't looked through the reasoning yet, but I did notice there was a separate opinion on one of the interpretive issues.
-- From USTR's press release:
In the arbitration, Antigua claimed that its level of impairment of WTO benefits resulting from U.S. noncompliance amounted to $3.4 billion per year – a figure more than three times the size of Antigua’s entire economy. During the arbitration, the United States explained to the Arbitrator that Antigua's claim was patently excessive. The United States is pleased that the figure arrived at by the Arbitrator is over 100 times lower than Antigua’s claim.
-- More from an AP story.
-- From Reuters.
-- What Antigua's legal team thought of the decision:
Mark Mendel, the lawyer who has been spearheading this case for the Antiguan government since it began back in 2003 observed “I am pleased that the panel approved our ability to cross-retaliate by suspension of intellectual property rights of United States business interests. That has only been done once before and is, I believe, a very potent weapon.”
Mr Mendel expressed less satisfaction with the amount of damages assessed. “I find it astonishing that two of the three panelists would in essence grant the United States the benefit of a hypothetical method of compliance most favorable to the American side in assessing Antigua’s level of trade impairment. What appears to have been done here is assuming a form of compliance that has not happened and probably will not happen without giving Antigua the ability to contest the method under the WTO’s normal procedures,” he added. Unlike other WTO rulings, awards of arbitrators are not subject to review by the Appellate Body of the WTO.
While questioning the low number, Mr Mendel remains positive about the dispute going forward. “US $21 million a year in intellectual property rights suspension going forward indefinitely is not such a bad asset to have. I hope that the United States government will now see the wisdom in reaching some accommodation with Antigua over this dispute and look forward to seeing efforts in this regard.”
-- From Sallie James at Cato.
-- From the NY Times, with a quote from Brendan McGivern:
Still, implementation will prove difficult, the lawyers say.
“Even if Antigua goes ahead with an act of piracy or the refusal to allow the registration of a trademark, the question still remains of how much that act is worth,” said Brendan McGivern, a trade lawyer with White & Case in Geneva. “The Antiguans could say that’s worth $50,000, and then the U.S. might say that’s worth $5 million — and I can tell you that the U.S. is going to dog them on every step of the way.”
No doubt he's right about that.
Here's my question. How much relevance does the amount of nullification or impairment decided in this arbitration decision have for any GATS Article XXI arbitration that occurs on the matter? The terms of reference for such arbitrations say:
13. The arbitration body shall have the following terms of reference unless the parties to the arbitration agree otherwise within ten days from the request for arbitration:
"To examine the compensatory adjustments offered by (name of modifying Member) or requested by (affected Member requesting the arbitration) and to find a resulting balance of rights and obligations which maintains a general level of mutually advantageous commitments not less favourable to trade than that provided for in Schedules of specific commitments prior to the negotiations. In such examination, the Arbitration body shall take into account any agreement reached, in negotiations under paragraph 4. above, between the modifying Member and any affected Member".
Seems like the $21 million figure could play some role there.
-- And here is the Antiguan legal team's press release.
-- Various quotes on the decision collected in the National Journal.
-- My favorite headline of the day: "WTO OKs Antigua as pirate of Caribbean"
-- More from Antigua's lawyer Mark Mendel.