Don’t miss Sallie James’s excellent write-up of the ongoing WTO dispute over the American gambling ban. Hollywood is being caught in the crossfire in the dispute, as one of the remedies the WTO is considering for the US’s non-compliance with WTO rulings is allowing other countries to ignore American companies’ copyrights.

As I point out over at Techdirt, I’m not sure it makes sense to paint Hollywood as an innocent victim here. After all, Hollywood has been pushing for decades to link trade policy and copyright law, going so far as to push for provisions in recent trade deals micro-managing other countries’ copyright policies and requiring them to enact laws like the DMCA as a condition of access to American markets. Free traders rightly object when special interests try to use free trade agreements to compel countries to enact their preferred labor and environmental policies. We should be equally incensed when Hollywood lobbies try to use trade agreements to compel countries to enact their preferred copyright policies. So there’s a certain amount of poetic justice in the fact that after decades of pushing to link trade and copyright issues, Hollywood has found its copyrights in the crosshairs of a trade dispute.

James also makes the excellent point that retaliatory tariffs are an insane way to impose damages on the losing country in a WTO dispute because tariffs hurt consumers in the “winning” country at the same time it hurts producers in the “losing” country. This is another reason we shouldn’t be too upset about copyright-based penalties for the losing party in trade disputes. If damages are imposed by targeting copyright law, consumers in the winning country will actually be made better off by lower prices for the copyrighted products in question. So while it would be best if Congress repealed its idiotic gambling ban, I’m not going too upset if Hollywood’s attempts to link copyright law to trade policy come back to bite them.