C O N F I D E N T I A L BRIDGETOWN 000587

SIPDIS

SIPDIS

DEPT FOR WHA/CAR
DEPT FOR L/CID MEERA DEMEL
DEPT FOR EB/OIA NATHANIEL HATCHER
DEPT FOR EB/CBA NANCY SMITH-NISSLEY
SOUTHCOM ALSO FOR POLAD

E.O. 12958: DECL: 04/04/2016
TAGS: ECON PREL ETRD EINV PINR XL AC
SUBJECT: FORMER ANTIGUAN DIPLOMAT EXPRESSES VIEWS ON
U.S.-CARICOM RELATIONS

REF: BRIDGETOWN 206

Classified By: DCM Mary Ellen T. Gilroy for reasons 1.4 (b) and (d).


1. (C) Summary: Sir Ronald Sanders, a prominent former
Antiguan diplomat, paid a courtesy call on Ambassador Kramer
to share his well-informed views. Sanders expressed the
following opinions: Caribbean Ambassadors in Washington
spend too much time at the OAS and not enough time engaging
the USG; U.S. and CARICOM Foreign Ministers should meet
regularly; Barbados Prime Minister Owen Arthur is the only PM
pushing Caribbean economic integration; Cabinet officials in
Antigua are pursuing the WTO case against the U.S. (over
Internet gambling) for personal gain; and the Half Moon Bay
resort in Antigua deserved to be expropriated because the
Amcit owners refused to rebuild or sell the property. End
Summary.


2. (SBU) Ambassador, DCM, and EconOff (notetaker) met March
22 with Sir Ronald Sanders, a former Antiguan High
Commissioner to the U.K. who is now a prominent columnist and
business executive. He requested a courtesy call on the
Ambassador after his recent move to Barbados from the U.K.
In a wide-ranging conversation, Sanders discussed
CARICOM-U.S. Ministerials, the CARICOM Single Market and
Economy (CSME), Antigua's WTO Internet gambling case against
the U.S., and the Half Moon Bay expropriation case in
Antigua.

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Biographic Note
--------------


3. (SBU) Sanders is closely allied with the former Prime
Minister of Antigua, Lester Bird, and the opposition Antigua
Labor Party (ALP). He was the only one to resign from the
Antiguan foreign service when current Prime Minister Baldwin
Spencer defeated the ALP in early 2004. Sanders came across

as a very knowledgeable and frank foreign policy realist. He
is now out of government completely (part of the reason for
his frankness) and writes a biweekly column that is
syndicated in eleven Caribbean newspapers and three websites,
including www.caribbeannetnews.com.


4. (SBU) Sanders was the lead negotiator on several
bilateral agreements between the U.S. and Antigua, including
that removing Antigua from the U.S. money laundering and tax
evasion "blacklist," Article 98, and the beginning stages of
the WTO Internet gambling case. He was also Chairman of the
Caribbean Financial Action Task Force, an anti-money
laundering organization. In addition, Sanders was Chairman
of the Board of the Swiss American Banking Group in Antigua
and currently works for an American telecom company (he did
not specify which one.)

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CARICOM-U.S. Ministerials
--------------


5. (SBU) Sanders told the Ambassador that, as Antiguan High
Commissioner to the U.K., he helped start regular
U.K.-CARICOM meetings by working with former British Foreign
Secretary Robin Cook. Sanders described the U.K.-CARICOM

SIPDIS
process as follows: Meetings at the High
Commissioner/Foreign Minister level occur every six months,
Foreign Ministers meet every year, and heads of government
meet every two years on the margins of the Commonwealth
Summit.


6. (C) Sanders lamented that no such system exists with the
U.S., partly because Caribbean Ambassadors in Washington
spend too much time at the Organization of American States
(OAS) and not enough time engaging officials in various
branches of the USG, particularly Congress. He also remarked
that when CARICOM leaders land high-level meetings with the
U.S. or U.K., they often waste the opportunity by sticking to
rehearsed speeches instead of engaging in real dialogue.

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CSME
--------------


7. (C) According to Sanders, Prime Ministers Baldwin Spencer

of Antigua and Barbuda and Ralph Gonsalves of St. Vincent and
the Grenadines were responsible for the OECS's failure to
meet the January 1 CSME "launch" deadline (Ref A). He said
the Prime Ministers of St. Kitts and Nevis and St. Lucia both
wanted to move ahead, but Gonsalves and Spencer kept the OECS
back for political reasons.


8. (C) Sanders grouped CSME opponents into two groups,
inefficient protected industries and fierce nationalists. He
believes these two groups make up a small portion of the
population but keep many politicians (like Spencer and
Gonsalves) from embracing the CSME. He criticized the
insular, sovereignty-conscious attitude in the Eastern
Caribbean as counterproductive, saying, "The only sovereignty
they (Caribbean countries) exercise is against each other."
In Sanders's view, Barbados PM Owen Arthur is the only
Caribbean leader that truly understands the importance of
regional integration.

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Antigua - WTO Internet Gambling Case
--------------



9. (C) Sanders insinuated that Antigua and Barbuda Finance
Minister Errol Cort, who is leading his country's WTO
Internet gambling challenge against the U.S., has a large
personal financial stake in the Antiguan gaming industry. He
made similar allegations against Antiguan Attorney General
Justin Simon, asserting that the case will not benefit
ordinary Antiguans. Sanders said a close relative of
Minister Cort is the head gaming regulator in Antigua.
(Comment: This attack on Cort and Simon could be
politically-motivated, as Sanders is a supporter of
opposition leader Lester Bird. Although true, it seems
strange for Sir Ronald, one of the people who initiated the
WTO challenge, to say the case will not benefit ordinary
Antiguans. End Comment.)

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Case Background Note
--------------


10. (SBU) Antigua brought a WTO case against the U.S. in
2003 for allegedly defying our WTO General Agreement on Trade
in Services (GATS) commitments by outlawing Internet
gambling. USTR challenged this view and the issue went
through the dispute settlement process. The case ended with
a WTO panel ruling in April 2005 that granted the U.S. a
partial victory. Although the panel said the U.S. was in
violation of its GATS commitment to free trade in "other
recreational services" which the panel interpreted to include
gambling, they allowed the U.S. the right to prohibit
Internet gambling to "protect morals and public order."
According to USTR, the U.S. only has to change some off-track
betting reguations to fully comply with the WTO ruling.


11. (SBU) Antiguan officials, however, claim the U.S. must
offer Antiguan Internet gambling operators full access to the
U.S. market. The WTO deadline for compliance in this case
was April 3, 2006, but the U.S. did not pass any legislation
to comply by that date. The case should have little
practical benefit for Antigua. Antigua's Internet gambling
business is thriving despite the U.S. prohibition and over
ninety percent of the customers are Americans. As the
Ambassador reminded Sanders, if the U.S. were to legalize
Internet gambling, Las Vegas-based firms would likely
overwhelm the market and crowd out Antigua's Internet
gambling operators. For this reason, and because most of the
Internet gambling operations in Antigua are foreign-owned,
paying little or no tax, there would not be much of a benefit
to the average Antiguan accruing from an Antiguan victory in
this case.

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Half Moon Bay
--------------


12. (C) When the DCM asked his opinion on the Half Moon Bay
expropriation case, Sanders quipped, "That case will be with
you for a long time." He expressed doubt that HMB managing
director Natalia Querard would be willing to negotiate with
the GOAB. In his opinion, the GOAB past and present has done
all that it can to work with Querard, but she has been

unwilling to work with the GOAB. He remarked that she "took
the insurance money and did not rebuild." (Note: "The
insurance money" refers to a settlement Querard allegedly
obtained after Hurricane Luis severely damaged HMB in 1995.
Querard contends that the insurance money was tied up in an
internal dispute among HMB shareholders. End Note.)

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Comment
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13. (C) Although with a marked pro-Lester Bird bias, Sanders
provided some valuable insight into the situation in Antigua
and throughout the Caribbean. As a cautionary note, Sanders
is linked to a bank under investigation. He used to be
Chairman of Swiss/Israeli businessman Bruce Rappaport's Swiss
American Banking Group in Antigua. Rappaport and the bank
are at the center of a corruption probe that the new Antiguan
government is conducting into the Lester Bird regime. Post
will keep in contact with Sanders.
KRAMER