Didn’t Microsoft just get slammed by the EU for millions alleging that it engaged in restraint of trade practices? Companies like Standard Oil in the United States were broker up long ago under the Sherman Anti Trust act ext. Doesn’t International law recognize the illegal nature of PRICE FIXING? However, you don’t ever seem to hear much in the news about OPEC being pure, simple, and probably illegal price fixing. Some would say what could we do short of war? Well for one we could use the BIG STICK of foreign policy to punish OPEC member states (unless they stopped fixing prices) by denying foreign aid, imposing trade sanctions. and threatening military action if all else fails. If I were President I would make a speech that said something like “The United States considers the free flow of oil at market prices and without restraint of trade agreements to be VITAL to its national interests. Any nation impeding this process can consider itself an enemy of the United States with all of the implications that status entails.” Okay, maybe that’s over the top, but it seems SOMETHING could be done. At the very least OPEC should be identified as in violation of free trade prinicipals and possibly International Law.
What law would they be breaking? And- who would enfore it? Did they sign a Treaty?
The Sherman Antitrust act only applies to US Companies- the Feds have no juristiction over Foriegn Governments.
Isn’t this how Mircosoft has been sued in the EU. I wonder if American citizens couldn’t bring lawsuits against OPEC nations since their PRODUCT ultimately ends up HERE under various anti-trust acts.
OPEC isn’t a company. It’s a treaty organization between various countries. Any comparison to Microsoft is invalid.
No one, not even the UN, has any kind of authority to charge them with anything.
Does the WTO treaties have anything to say about monopolies? The WTO has teeth (in as far as it allows retalitory tariffs) and has made the US back recently down re steel protection
OPEC isn’t a monopoly, either.
The OPEC ideals are actually very realistic. All of the OPEC countries are developing nations whose prosperity depends heavily on oil revenues. The agreement between them is designed to prevent flooding the market with oil, thereby cheapening their only source of income.
From http://www.opec.org/
“Since oil revenues are so vital for the economic development of these nations, they aim to bring stability and harmony to the oil market by adjusting their oil output to help ensure a balance between supply and demand. Twice a year, or more frequently if required, the Oil and Energy Ministers of the OPEC Members meet to decide on the Organization’s output level, and consider whether any action to adjust output is necessary in the light of recent and anticipated oil market developments.”
All of the OPEC countries together produce about 40% of the world’s oil, however, if they all released their oil into the market indiscriminately, it would not only hurt them, but hurt the other major oil exporters also. In addition, although they only produce 40%, they account for 55% of oil traded on world markets.
Also, from the same place:
“The impact of OPEC output decisions on crude oil prices should be considered separately from the issue of changes in the prices of oil products, such as gasoline or heating oil. There are many factors that influence the prices paid by end consumers for of oil products. In some countries taxes comprise 70 per cent of the final price paid by consumers, so even a major change in the price of crude oil might have only a minor impact on consumer prices.”
If you only have one export, you have to use it to maintain your balance of trade, value of your currency, etc. I’m not an economist, but when you’re buying most everything else, you have to make the most out of the few products you export. If they raised their prices too high, they wouldn’t be able to sell and our prices would go up to ridiculous levels anyway. All in all, OPEC is probably a “good thing.”
OPEC is not a monopoly, it is a cartel. BTW, it stands for Organization of the Petroleum Exporting Countries, comprised of Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, UAE and Venezuela. There are also counties that are not official OPEC members, but follow in step (IIRC Brunei is one).
Someone else can look up what the OPEC percentage of production is versus the rest of the world.
Major petroleum producing countries such as the US, Russia, Canada, etc are not member countries.
Find out all you want here: http://www.opec.org/
There is no such thing as “international law.” There are agreements, treaties, conventions, etc that make up the body of what is often referred to as “international law”, but in reality there is no such animal with formal courts and enforcement powers. Not sure if the OPEC countries are signatories of WTO. AFAIK, WTO issues are usually around price dumping, which is not the current case.
Similar laws on anti-competitive conduct operate in the EU.
The respondent to an anti-trust case must be a corporation or a natural person. OPEC isn’t, it’s a coalition of nations. US anti-trust law doesn’t presume to correct to the policy of other nations, it respect sovereignty.
Changing other nations’ policy is achieved by diplomacy or force of arms.
Price fixing is very well accepted internationally. e.g. both big blocs, the US and the EU fix agricultural prices with enormous efforts. Tariffs (on both imports and exports) are not only a source of income but also an instrument for price fixing. Direct and indirect subsidies influence prices. All of those are at least to some degree controversial and always someone is hurt. However in reality pure “free trade” is not the norm, especially not across bloc borders.
This depends on your definition of slammed:
Do we supply foreign aid to any OPEC nations? I seriously doubt it, and if we do, we should cut it off any way, regardless of their production.
Whether we should provide or cut off aid to OPEC countries is a question that belongs in Great Debates.
From China Guy’s list, I checked out the USAID budget request for 2003, which I assume was approved roughly as is.
Algeria - none
Indonesia - 142 million
Iran - none
Iraq - none
Kuwait - none
Libya - none
Nigeria - 66 million
Qatar - none
Saudi Arabia - none
UAE - none
Venezuela - none
This is only development aid, but the US also gives substantial military aid to some countries. Off the top of my head, Kuwait, Qatar, and Saudi Arabia receive this, and possibly the UAE to a lesser extent. Iraq is obviously in a different category now. Libya’s improved relations with the west will no doubt promote trade, but I’d be surprised to see military aid going there, and they will likely have no need for development aid now that they can use their oil wealth. Algeria successfully held democratic elections recently, and the US may be willing to throw some money at them now. Iran and Venezuela are likely to remain standoffish toward the US.
we also sell Saudi Arabia a great deal of military equipement (or have in the past). IF OPEC nations getting together to form a “cartel” is okay then so to is it acceptable for the nations adversely affected by their cartel to form counter agreements. Here are a few things that could be done by the world to end the OPEC nonsense:
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Ending all aid and military equipement sales to nations that conspired to limit oil supply.
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Seeking to prevent advanced technology from going to these nations.
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Openly seeking to destablize the governments of any nation that supports oil price fixing.
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Form a “counter cartel” with the EU that limits FOOD sales to these nations.
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Reserve the right to ANNEX the Middle East after which time the oil would be pumped according to PRODUCTION ABILITY, and the profits (which would probably be less) would be given back to the governments from which which we captured the fields. Oil is so vital to our current national economy that we would be justified. From a military perspective no nation could stop us.
You are joking, right?
to our economy. We are therefore justified in using extreme measures in order to maintain its flow. However, it we really were SERIOUS at being willing to do this, then it is VERY UNLIKELY that we would actually be forced to do so. If these countries would simly produce their product and sell as much as possible I think they might actually earn MORE money in the long term. There “price fixing” will ultimately accerate our development of Hydrogen, and fuel cell technology.
Someone please tell me that this is an extremist and/or minority position in the U.S. If this is a current opinion I find it alarming, and grounds for serious distrust with regard to any U.S. actions.
As I already mentioned, this is a double standard. The US (and the EU) suppress free trade whenever it serves their interests. Of course you are free to believe that everyone has a right to everything one can push through by force, but I doubt that this is a very desirable world order in the long run.
They would buy it elsewhere.
Might be possible. To some limited extent. It’s not like Brazil or South-Korea can’t sell them advanced technology. I suppose you don’t mind paying indemnities to american companies which sell them stuff, too.
Good idea. The world needs some destabilization. Especially the middle-east. I propose terrorism as a main tool for the destabilization. It’s quite cheap. The only thing needed is some volunteers. Do you know how to fly a plane (no landing skill required)?
Yeah. Starving people to get cheap oil from them is the way to go.
Yes. Begin by finishing annexing Irak. Seems like a piece of cake. Then proceed with the rest of the middle-east. Could you remind me how many american men are between 18 and 35 y.o. ?
Actually, if I were you I would annex the world. It would solve plenty of problems.
By the way, by “oil being vital”, you mean that you paying 3 cents less at the pump is worth the death of some hundred thousands people (including neighbors, relatives, etc…)?
Also, are develloping countries allowed to destabilize the US because american farmers are subsidized?
If it were a current widespread opinion, in the US, I think it would the right moment to buy a nuclear fallout shelter. The “free market price” of those would likely increase steadily in the coming weeks.