Senators Call On Bush Administration To Take Action Against OPEC In The WTO

OPEC Operates Illegal Cartel Under International Trade Law

June 17, 2008 -- WASHINGTON, DC – Today, a coalition of eleven Senators led by Sen. Frank R. Lautenberg (D – NJ) called on the Bush Administration to take action in the World Trade Organization (WTO) against eight Petroleum Exporting Countries (OPEC) by ordering United States Trade Representative (USTR) Ambassador Susan Schwab to file a complaint with the WTO.

These eight countries, operating as an illegal cartel, have refused to increase production, reduced the supply of oil on the market and driven up the gas prices that consumers pay at the pump.

In a letter to Ambassador Schwab, the Senators wrote, “The very existence of the OPEC cartel violates GATT Article XI, which prohibits nations from maintaining quotas or any other quantitative restriction on exports. The refusal of OPEC nations who are members of the WTO to play by these rules is inexcusable, and they must be held accountable. I hope you will inform the President and direct your agency to look into these charges and work to directly confront OPEC’s violations of international law.”

The letter was signed by Sens. Lautenberg, Byron Dorgan (D – ND), Carl Levin (D – MI), Robert P. Casey, Jr. (D – PA), Amy Klobuchar (D – MN), Barbara Boxer (D – CA), Richard J. Durbin (D – IL), Charles E. Schumer (D – NY), Bernie Sanders (D – VT), Hillary Rodham Clinton (D – NY) and Robert Menendez (D – NJ).

Last month, Sen. Lautenberg introduced a bill (S. 2976) to require the Administration to file a complaint against OPEC for its anti-competitive practices and illegal export quotas on oil, which leads to higher gas prices here at home. However, the Bush Administration is able to take this action without Congress forcing its hand. The Senator’s bill would require Ambassador Schwab to immediately file a complaint with the WTO against OPEC nations to reduce gas prices. The WTO would then have 60 days to convene a dispute settlement panel to judge the case. If the case were decided in the U.S.’s favor, OPEC would be required to cease its illegal operations or the U.S. could immediately impose trade remedies to reduce the price of oil.

OPEC’s manipulation of the oil market has been a major factor for the increase in gas prices, which have more than tripled since President Bush took office, rising from $1.10 per gallon in 2002 to $4 per gallon today. In a report previously issued by Lautenberg, it was concluded that OPEC violated WTO rules by engaging in price manipulation, which it achieves by negotiating among itself and setting export quotas for its member nations.

Source: Senator Frank Lautenberg

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