Antigua and Barbuda, the tiny Caribbean nation whose economy was devastated by a US embargo on online gambling, is threatening to retaliate by legalizing internet piracy. The WTO says the US embargo violates international trade rules and has given Antigua the okay to retaliate by using US intellectual property.

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Internet gambling was a boon for Antigua's economy. At one point more than 4,000 people out of a population of less than 100,000 were working in the industry. Then the US placed an embargo on Antigua's online gaming industry, under the logic that placing bets across state lines violates American law. Now the industry only employs 500 people.

Antigua is threatening to allow ultra-cheap subscription or pay-per download sites to operate from Antigua, or set up a government-run torrent site that would allow free downloads of American music, movies and software, unless the US decides "to negotiate fairly and honestly in the very near future so that we do not ultimately have to implement the remedy," Antigua's lawyer, Mark Mendel, told Wired.

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