Star Alliance - Am I required to Upgrade to RTW First from Biz on two-cabin aircraft?

I've reserved a RTWSTAR1 ticket in business class, and have been told I needed to upgrade it to a first-class ticket on the following itinerary:

SEA-ORD-SXM-SJU-IAD-LHR-FRA-NRT-SEA

UA called me up and said, "Mr. Seattle1k, this is the International Rate Desk and your ticket is ready to be booked. We have to charge you for a RTW First class ticket instead of Business class. You have one segment (ORD-SXM) on UA, which is international on a two-class aircraft, and since there's no business class... ...well, we have no choice but to make you pay the higher fare."

My understanding/assumption is that on two-cabin aircraft in Zone1, that I would be booked in AC. She said the other option would be to take a seat in Economy, but this sounds fishy to me when there are seats available in First.

St. Maarten (SXM) is clearly international, but I've never head of this before and have no UA/*A RTW rules to substantiate or refute their claims.

Any guidance is appreciated.

My understanding (which may be worth nothing) is on RTW business class, the two-class flights get downgraded to economy.

My understanding (which may be worth nothing) is on RTW business class, the two-class flights get downgraded to economy.

Actually, all other North America (UA Zone 1) are booked in A, or Discounted First. This includes flights to/from Canada, Mexico, US Virgin Islands, and Puerto Rico.

Award tickets are allocated in a similar fashion -- with "business class awards being booked in United Business® or United First® on Two-Class Aircraft".

It would seem that United would use the same logic all the way around.

if the two classes are 'named' economy and first (as UA does) than your business-class rtw ticket gets you into first (A).

on mileage runs such UA inner NorthAmerican flight segments get me 3.25 times status miles into my LH miles&more account.

And there is another 'trick': as the inner North American flights on 2-class-carriers are booked (and printed on my ticket) as first-class 'A', when I later change to a three-class flight on that same flight segment (without changing the ticket, just an earlier or later flight) you get into first on a three-class flight (I did that lately flying DEN-SFO).

I spoke again with UA last night, and was disappointed with their response. They claim that RTW tix booked in biz are only given a first class seat on two cabin aircraft on flights from US destinations to other US destination, and when available to Canada. Mexico and certain Caribbean desitnations (Aruba and St. Maarten) are booked in Economy. She did say that these Economy seats are upgradable.

The irony here is that I can book a flight to San Juan PR and get it in First as a part of the RTW biz fare -- but St Maarten (only 120 miles further) is booked in Economy. Flights to Alaska and Hawaii are booked in first as well.

This policy is not really logical given that every other UA policy puts biz class flyers in first. Oh well...