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A gasoline tax holiday, any way you cut it, is going to be headline-worthy: It's an eye-catching policy proposal, and the fact that most economists think it's a bad idea means it also has conflict going for it. After Republican nominee John McCain put it on the table, Democratic hopeful Hillary Clinton this week followed behind. But there was an international angle to her new gasoline price package, too; she would, as president, file a complaint with the World Trade Organization against OPEC.
It sounded fascinating. So, I wondered, what is the soundness of that concept? Several years ago, in 2004, Sen. Frank Lautenberg, a Democrat from New Jersey, along with Rep. Peter DeFazio, a Democrat from Oregon, proposed complaining to the WTO about OPEC. It was greeted skeptically by analysts, who saw it, according to this article, as "election-year political theater." Furthermore, per the International Economic Law and Policy Blog, Algeria, Iran, Iraq and Libya are OPEC countries that "remain outside the OPEC system." And Russia, "which is known to collude with OPEC quite often," isn't a WTO member. Still, how would WTO greet such a complaint? Well, according to the Oil and Gas Journal: "It also is very unlikely that under current WTO rules the kind of legal challenge advocated by Lautenberg would be sustained. WTO offers exceptions for 'conservation of national resources,' for international commodities agreements, and for a nation's national security interests."
So, all in all, while it's an inventive idea, it wouldn't be without its limitations. On the upside, Clinton is making her proposal years after Lautenberg and DeFazio proposed it. And as the OGJ said: "Longer term, however, some analysts say it is conceivable that WTO someday could be used as a platform for producing and consuming nations to reach a mutual understanding on an equitable international oil-pricing system. But many suspect that day to be long in coming."
(We'll save her proposal to allow OPEC to be challenged under U.S. antitrust law for another day, perhaps.) |
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