Conflicting Obligations for Oil Exporting Nations?: Satisfying Membership Requirements of Both OPEC and the WTO

By Broome, Stephen A. | The George Washington International Law Review, March 15, 2006 | Go to article overview

Conflicting Obligations for Oil Exporting Nations?: Satisfying Membership Requirements of Both OPEC and the WTO


Broome, Stephen A., The George Washington International Law Review


I. INTRODUCTION

On July 8, 2004 the Office of Senator Frank Lautenberg (D-NJ) released a report entitled Busting Up the Cartel: The WTO case Against OPEC (Lautenberg Report).1 The Lautenberg Report contends that countries that are members of both the World Trade Organization (WTO) and the Organization of Petroleum Exporting Countries (OPEC or the Organization),2 and that abide by OPEC-mandated oil production quotas, are thereby in violation of the General Agreement on Tariffs and Trade (GATT) Article XI:1 prohibition on quantitative export restrictions.3 The Lautenberg Report concludes that the United States Trade Representative (USTR) should bring a claim against OPEC members at the WTO for their alleged violations.4

The Lautenberg Report is not the first challenge to OPEC's legitimacy emanating from the United States.5 OPEC has never been viewed favorably by the American public: "In the public's perception, [OPEC] epitomizes a greedy, rapacious international cartel that preys on the American public in defiance of our one hundred and ten year tradition of market competition embodied in the Sherman Act."6 U.S. citizens have twice challenged the cartel-like nature of OPEC under U.S. antitrust laws.7 Both cases were dismissed, however: the first under the doctrine of sovereign immunity and the Act of State Doctrine;8 the second on the theory that, absent consent, there were no acceptable means for serving an international organization like OPEC with process, and, therefore, the court could not establish jurisdiction.9

These cases left Congress with the impression that it is either impossible or extremely difficult to sue OPEC.10 In response, Congress introduced a number of bills abolishing certain defenses and immunities that it perceived were standing in the way of a successful antitrust action against the Organization.11 Because no suit has since been brought, the question remains whether the judiciary will feel comfortable holding foreign oil-producing nations liable under U.S. antitrust laws.

While it is not clear that a U.S. court can legitimately order foreign oil-producing nations to comply with U.S. standards of competition, it is clear that the WTO Dispute Settlement Body can legitimately require WTO members to comply with WTO standards of international trade.12 Accordingly, recent congressional efforts to challenge OPEC focus on OPEC's alleged inconsistency with the WTO.13 Although they are two of the most visible international economic institutions, OPEC, and the WTO are often "associated with diametrically opposed players in the global economy: the WTO with the sometimes savage rules of the market and OPEC with the often demonized intergovernmental manipulation of prices."14

The first attempts to invoke WTO law to "bust up the cartel" were instigated by Representative Peter DeFa/io (D-OR).15 DeFazio was largely unsuccessful, however, in achieving sufficient support for his ultimate objective: to pass a bill that would require the USTR to initiate dispute settlement proceedings against OPEC nations that are members of the WTO.16 But in light of the recent tumult over high gas prices, there has been a renewed interest in DeFazio's cause from other offices on Capitol Hill, most notably from Senator Lautenberg.17 The Lautenberg Report provides the first detailed legal argument that a basis for pursuing OPEC members at the WTO exists. On July 8, 2004, Senators Durbin, Levin, and Reid-all of whom were apparently persuaded by the Lautenberg Report-joined Senator Lautenberg in introducing legislation to the Senate virtually identical to the bill introduced by Representative DeFazio,18 which is still pending in the House.19

While it remains to be seen whether increasing gas prices will be enough of an impetus to rally the rest of Congress behind either of these bills, their allegations raise an issue that is important to WTO jurisprudence irrespective of whether the bills are passed; namely, whether a country can be a member of OPEC and the WTO while simultaneously fulfilling its obligations to both organizations.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Conflicting Obligations for Oil Exporting Nations?: Satisfying Membership Requirements of Both OPEC and the WTO
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.