SOURCE: Reuters

(Washington, D.C.) — The Bush administration should explore legislation to roll back a U.S. ban on Internet gambling instead of paying compensation to the European Union and other trading partners, the chairmen of two House of Representatives committees said on Monday.

House Financial Services Committee Chairman Barney Frank, House Judiciary Committee Chairman John Conyers and six other lawmakers criticized the Bush administration's handling of the issue in a letter to U.S. Trade Representative Susan Schwab.

"Your agency has chosen not to consult with Congress, but instead to take what we view as a drastic step which could have significant consequences for the whole WTO (World Trade Organization) system," the lawmakers said.

Rather than comply with a negative WTO ruling in a case filed by the Caribbean nation Antigua and Barbuda, the United States announced earlier this year it was "clarifying" it never intended to allow foreign firms to offer Internet gambling services as part of the 1994 Uruguay Round trade pact.

That opened the door for other trading partners to demand compensation for the United States' decision to retroactively exclude Internet gambling from its commitments under the General Agreement on Trade in Services, or GATS.

The United States has been in negotiation with the EU, India, Japan, Costa Rica, Macao, Canada and Australia on a compensation package and the trading partners recently set a new mid-December deadline for reaching a deal.