Both tracks of the Gambling case continue to move ahead, with the parties still trying to reach agreement (and not getting that close, it seems).
With regard to the U.S. withdrawal of its Gambling services commitments, the Financial Times reports that the U.S. compensation proposal to the EU "involves opening opportunities in the storage, warehouse services and technical testing sectors to make up for the gaming restrictions." The FT further notes: "This is not thought to equate to the estimated $4bn (£2bn, €2.8bn) a year that EU companies are losing, and the same concessions are also being offered as part of US moves under the Doha round of world trade talks."
As for the Article 22.6 arbitration, Antigua proposed $3.4 billion in sanctions, and the U.S. came back with a much lower number: $500,000 (or at the most $3.3 million). The U.S. submission is here. I only glanced at the submission quickly, but my sense was that the U.S. was arguing the following. The finding of violation related to horse-racing only, and thus calculating nullification or impairment should be based on the lost value to Antigua of gambling on horse-racing only. The total value of Antigua's [ADDED: This should be "other commercial services" exports] service exports was (in 2001) $47 million. Since horse-racing makes up 7 percent of the U.S. gambling market, the value of lost horse-racing gambling services is at most $3.3 million. But even that overstates things says the U.S.:
The United States believes that this $3.3 million figure would overstate current levels of nullification and impairment, because (1) it is based on services exports to the world (not just to the United States), and (2) Antigua itself asserts that since 2001 its level of market share has fallen drastically from 50 percent worldwide, is currently only 7 percent, and will level off at only a 5 percent market share. If Antigua’s own claims of loss in market share are taken into account, then the $3.3 million per year figure (reflecting exports of horseracing gambling services in 2001) would need to be reduced by the ratio of 7 percent (Antigua’s claimed market share in 2001) over 50 percent (Antigua’s claimed current market share), or to approximately $500,000 per year in lost exports to the world of horserace gambling services.
So, the arbitrator is faced with the unenviable task of trying to find a reasonable compromise between $3.4 billion and $500,000.
