Senators Call on Bush to Take Action Against OPEC

WASHINGTON – Eleven senators called on the Bush administration Tuesday to file a complaint with the World Trade Organization against eight members of the OPEC cartel, saying they are violating trade rules by colluding to hold down global oil supplies.

The senators, 10 Democrats and one independent, maintained "the very existence of OPEC" violates the GATT trade agreement that prohibits nations from setting quotas or imposing other restrictions 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," said the senators in a letter to U.S. Trade Representative Susan Schwab.

The group, led by Sen. Frank Lautenberg, a Democrat, said the White House should direct Schwab to file a complaint with the WTO against the oil producers.

Gretchen Hamel, spokeswoman for the Office of U.S. Trade Representative, said "We have considered this before and remain of the view that under WTO rules filing a (complaint) case cannot be an effective course of action."

The OPEC members for years have gathered periodically to establish production quotas. Despite the current surge in oil prices, well over $100 a barrel and growing global demand, OPEC members as a group have refused to boost production.

Saudi Arabia, the world's largest oil producer, is hosting a meeting of oil producing and consuming nations in Jeddah on Sunday to discuss ways to tackle soaring oil prices. The OPEC countries argue that market speculation and the declining value of the dollar has caused the high prices that have hovered above $130 a barrel in recent weeks.

Over the weekend, Saudi officials indicated they would increase oil output by 200,000 barrels a day, or by 2 percent, from June to July. In May, it said it was boosting production by 300,000 barrels a day in June to make up for reductions by other OPEC countries.

The 13 OPEC members account for about 40 percent of world oil production.

Members of Congress increasingly have targeted OPEC for criticism as they look for ways to respond to public anger over $4 a gallon gasoline and the record high oil prices.

Lautenberg last month introduced legislation that would require Schwab to file a complaint with the WTO against the OPEC members for anticompetitive practices and setting illegal export quotas. But he and the other senators said the administration can do so without congressional action.

Congressional Democrats also have been considering legislation that would give the Justice Department authority to take antitrust actions against OPEC nations in U.S. courts.

The eight OPEC members that also belong to the WTO are Angola, Ecuador, Nigeria, Saudi Arabia, Venezuela, Kuwait, Qatar and the United Arab Emirates.

"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," the senators said in a statement.

Four other OPEC members — Algeria, Iran, Iraq and Libya — are not part of WTO.