Antigua Threatens the United States with Free Trade

The New York Times article on a W.T.O. dispute with Antigua over on-line gambling completely missed the irony raised by Antigua’s response. The basic story is that the W.T.O. ruled that U.S. prohibitions on offshore on-line gambling violated the agreement, and allowed Antigua to apply offsetting sanctions to balance out the harm it incurred.

This is usually the joke part of the W.T.O.. While the United States is a large enough consumer that selective tariffs or other import restrictions can impose a serious cost on most countries. However, the markets of most countries are so small that any restrictions on imports from the United States would barely even be noticed.

Antigua got around this problem by proposing to go the route of free trade. They want the right to distribute recorded movies, music, and software without any regard to U.S. copyrights. In other words, Antigua is proposing to eliminate copyright monopolies on these products. The existence of the Internet means that Antigua’s decision to allow free trade in these products would immediately make them freely available all over the world.

According to the article, the threat of free trade has Hollywood and the software industry terrified. Unfortunately, because the reporter apparently has no background in economic nor spoke to any economists, the enormous irony of this situation was not noted in this article.

--Dean Baker