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Mega Antigua (Updated)

If things get too hot for MegaUpload founder Kim Dotcom in New Zealand he might want check out real estate in Antigua. The tiny Caribbean nation was granted authorization this morning by the World Trade Organization to suspend enforcement of U.S. copyrights in retaliation for the U.S. government’s crackdown on off-shore gambling sites that Antigua claims has “devastated” its economy.

The ruling allows the government of Antigua to set up a website to sell movies, music and other material that infringes U.S. copyright without making payments to U.S. copyright owners.

The dispute dates back nearly a decade, to moves by the U.S. to block access here to offshore gaming sites. Antigua claims its online gambling industry was employed 4,000 people and was valued at $3.4 billion per year. Most of that business came from the U.S., however, and when the U.S. cut off access the industry collapsed.

Antigua complained to the WTO,  and in 2007 the agency ruled the U.S. had violated international fair-trade rules. Antigua was granted permission to suspend its obligations under the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement if the U.S. did comply with the WTO ruling — a process known as “cross-retaliation.” Since then, Antigua has been trying to negotiate a settlement with the U.S. that would restore access to off-shore gambling sites but has now run out of patience.

According to the Antigua government’s press release:

Antigua is seeking final WTO approval of its sanctions in order to compel the United States to either comply with the rulings in Antigua’s favor in the gambling dispute or to negotiate a fair and reasonable solution with the Antiguan Government. The remedy is expressly provided for under WTO law and, contrary to what the United States has publicly stated, will not constitute “piracy” or theft of intellectual property rights. Rather, it will be a lawful suspension of intellectual property rights, conforming to the judgment of the relevant WTO tribunal.

Ironically, the TRIPS agreement is largely a U.S. creation, and was strongly promoted by the copyright industries. That fact that it is now being used against the U.S. will be a bitter pill for those industries to swallow.

Update: And indeed, that pill is not going down well at all. An attorney for the International Intellectual Property Alliance (IIPA) told the Capitol Hill newspaper The Hill on Monday, “If Antigua moves forward, we will work to ensure that its eligibility to participate in any U.S. trade assistance or benefit is withdrawn…Countries have international obligations aside and apart from their WTO obligations.”

IIPA represents the MPAA, RIAA and BSA in the U.S., as well as copyright groups based in Europe.