EU Commissioner Calls On Barney Frank

Published Saturday, November 10, 2007 -


"I think (Frank) takes a fair-minded, common sense approach to this," says Mandelson

The headline-grabbing visit to Washington by European Union Trade Commissioner Peter Mandelson continued keep the online gambling industry in the spotlight this week as the EU emissary visited US legislators and trade representatives and spoke at meetings on "Transatlantic Economic Cooperation."

Mandelson's principal mission is to negotiate fair and adequate compensation for the 27 nation EU following the unilateral withdrawal of WTO trade obligations by the United States (see previous reports) However, he has also taken the opportunity to call for an end to American laws which discriminate against foreign online gambling companies.

Whilst he has hinted that the $100 billion compensation claim called for by EU commercial organisations may be a little ambitious, Mandelson has stressed that he is pressing for substantial redress .

"When a member of the W.T.O. defaults on its commitments, compensation is due," he said in an interview with Reuters. "That's the case of online gambling."

With at least seven other countries seeking compensation, the European Union is probably the largest claimant in the issue and negotiations have twice been extended as efforts to achieve an acceptable settlement continue. If the parties cannot settle the matter between themselves, the E.U. could demand a binding arbitration before a W.T.O. panel.

Mandelson met with Congressman Barney Frank during his visit, discussing the legislator's proposed "Internet Gambling Regulation and Enforcement Act", which seeks to regulate Internet gambling and possibly bring the U.S. into compliance with World Trade Organisation rules by creating a level playing field among domestic and international operators.

"I think [Frank] takes a fair-minded, common sense approach to this and we look forward to that being effective legislation," said Mandelson.

The U.S. Trade Representative Susan Schwab was also on Mandelson's itinerary on the compensation issue.

Trade experts applauded Mandelson's comments during his stay in Washington.

Nao Matsukata, formerly Director of Policy Planning for the US Trade Representative and now a Senior Advisor for Alston and Bird LLP said that the EU initiative signals a new chapter in the resolution of the WTO case.

"His willingness to meet with Chairman Frank suggests that Mandelson is open to finding a legislative solution to the problem," said Matsukata. "The meeting today initiated a mutually supportive effort to resolve the unfortunate decisions of the United States to withdraw from its GATS commitments, and should help create positive momentum for the Frank legislation on Capitol Hill. Next steps should include closer consultations between congressional staff and Mandelson and his staff."

Lode Van Den Hende, a trade expert in Brussels commented on the Frank bill: "The U.S. Congress is seeking to regulate online gambling in a competitive and fairly taxed environment that encourages the participation of responsible companies. It is possible for U.S. legislation to create strong consumer protections, facilitate consumer choice, and provide durable tax revenues for the future. "Since the U.S. Trade Representative's sole interest seems to be to continue to violate U.S. treaty obligations under the WTO, it is incumbent upon the E.U. to work directly with the U.S. Congress to develop a responsible solution."

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