Ethan Zuckerman explains how tiny countries are using international institutions to take up asymmetric battles to protect their primary industries:

Antigua is currently battling the United States at the WTO over online gambling. Online gambling, which is Antigua’s second-largest industry after tourism, is largely prohibited in the US. The US has asked sites to block access to American users by geolocating and blocking IP addresses, and recent legislation prevents US banks and credit card issuers from processing payments to overseas gambling sites. The WTO determined that this behavior constitues unfair trade practice and is preparing to allow Antigua to sanction the US.

Since raising import duties on US goods in Antigua is hardly likely to damage the US economy, the WTO is considering a novel solution of hitting the US where it hurts: intellectual property. Under a proposal under consideration at the WTO, Antigua would be allowed to violate US intellectual property rights by selling legal pirated copies of US books, movies and software, giving the tiny nation (70,000 people, $870m GDP) an effective trade sanction against the US. Predictably, copyright holders are now lobbying the US Trade Representative to back down before their industries are damaged. The result is likely to be that Antigua manages to change US law and get online gambling legalized. (Thanks to Charlie Nesson, who’s been following this issue closely and pointed me towards this story.)

Fascinating.