Hollywood is abuzz with reports that the tiny islands of Antigua and Barbuda may begin operating their own national versions of the Pirate Bay, where individuals can cheaply, or even freely, download the latest films and TV shows. The clincher: this will all be legal.
How is that possible? Because the World Trade Organization says so. Let us explain.
When the U.S. helped create the WTO back in the early 1990s, it had a few main goals. One was to create a serious world trade court. The WTO has a lot of complex rules on trade, and the idea was to build a legal system that could neutrally adjudicate allegations of rule breaking. And it would work by allowing the winning country to retaliate against the loser by “suspending obligations.”
In other words, if the U.S. takes Japan to trade court and wins, Japan has to stop doing whatever bad thing it was doing. And if it doesn’t, the U.S. gets to retaliate--by, for example, increasing tariffs on Japanese goods up to the amount of harm Japan was causing.