Antigua may be the first country to have a government-run torrent site, effectively legalizing Internet piracy. The World Trade Organization has given approval for the tiny Caribbean nation to suspend United States copyrights, allowing the government to run a torrent site that will host and sell movies and other intellectual properties without compensating American studios or creators.

A government-run torrent site was Antigua’s response to an American embargo on gambling. The United States has prevented Antigua-based Internet gambling companies from operating in the U.S., effectively crippling the market. TorrentFreak notes that nearly 5 percent of the Caribbean country was employed by companies that were affiliated with gambling, but with no American market, that booming market quickly disintegrated.

Antigua announced the plans to launch its own torrent site, similar to The Pirate Bay, which will act as a download portal for movies, music, television shows, video games and other property that’s copyrighted in the United States. The small country won its gambling dispute with the U.S. after it presented its case to the WTO although the U.S. still bans Internet gambling from Antigua-based sites, reports The Associated Press.

Now the minuscule island country is 2-0 against the U.S. as the WTO once again ruled in favor of Antigua, letting it suspend U.S. copyrights, reports AP. According to Carl Roberts, Antigua’s high commissioner (ambassador) to its old colonizer Britain, “Our little country is doing precisely what it has earned the right to do under international agreements."

The approval stems from another WTO decision regarding the fight over gambling. In 2007, the WTO agreed to suspend copyright up to $21 million a year and Antigua plans on using this ruling, now strengthened by the most recent decision, to go ahead with a government-run file sharing site that will sell copyrighted material without compensating its American makers and copyright holders.

While Antigua calls this a victory, America is calling it piracy. In a memo to the WTO in December, the United States mission to the Geneva-based body said, “Government-authorized piracy would undermine chances for a settlement that would provide real benefits to Antigua. It also would serve as a major impediment to foreign investment in the Antiguan economy, particularly in high-tech industries.”

As of now, the Antiguan government has not unveiled its download site and it is unclear what service model it will use. Individuals talking to AP and TorrentFreak believe the site could be a subscription-based service, offering unlimited access for a set price per month or be a per-download model where prices are substantially lower than what one would find in a store or other legal market, such as iTunes.

This site, and ruling, could be used simply as a way for Antigua to leverage a deal with the United States over the gambling dispute. If the site becomes a reality, expect plenty more debate including the legality of downloading from the site for those outside of the Caribbean country, notes AP.