If tiny Antigua and Barbuda gets its way, distributors of works by Beyoncé, Steven Spielberg and other American artists could get shortchanged in the eastern Caribbean islands.
Frustrated by the inability to collect billions on its World Trade Organization victory against the U.S. over Internet casinos, Antigua is seeking to cash in its winnings another way — by directing payments for American intellectual property, such as music and film, to the government. Antigua estimates the damage to its economy at $3.4 billion.
“We are tired of talking,” said Attorney General Justin Simon, who last month formed a committee to start working on a plan to collect the royalties.
Antigua, which took the U.S. to the WTO and won, first earned the right to retaliate six years ago. The latest WTO ruling came after the U.S. failed to honor its previous ruling that online gambling restrictions were illegal — and that Antigua could impose sanctions. The country then asked for the right to go after trademarks, copyrights and other intellectual property rights.
The government plans to collect up to $21 million annually in royalties retroactive to 2006, money that normally goes to American music and film distributors. It’s unclear whether the government would return any of the money it collects to distributors.
The request has ignited the ire of U.S. trade officials — who warn that Antigua’s proposal could damage its reputation — and film industry executives, who worry it could hurt future sales and open up a “Pandora’s box” to piracy in other countries.
“Antiguan officials understand that retaliation against U.S. intellectual property rights, such as copyrights, would not be constructive,” said Brian Quinn, a spokesman with the Office of the United States Trade Representative. “It would damage Antigua’s climate for investment and innovation, and would not promote settlement.”
A spokeswoman for the Motion Picture Association of America declined to comment, but pointed to concerns raised in a 2008 letter — a year after Antigua asked the WTO for the right to retaliate in order to collect on its estimated billions in gambling losses.
Calling the figure “grossly exaggerated,” the association said Antigua’s proposal would present “real economic harm.”
“The unfortunate reality is that the failure to offer or enforce adequate protection of intellectual property rights in Antigua could foster abuses in other countries,” Greg Frazier of the Motion Picture Association of America wrote.
Frazier also said that the “copyright-haven” proposal wasn’t manageable. Piracy, he noted, was already costing the film industry thousands in jobs and billions in lost sales.
“While we cannot provide a reliable estimate of the damage Antigua’s proposal would cause the U.S.,” Frazier said, “MPAA believes it would be very difficult to insulate other WTO members from the effects of Antigua’s proposed retaliation.”
Simon said the country’s decision to make its threat a reality comes after years of unsuccessful negotiations with U.S. trade officials over the country’s ban, which has crippled Antigua’s gaming industry. The industry once paid almost $13 million in salaries to its 3,000 workers and raked in as much as $7 million in licensing fees, Simon said.