Oil dumping case wins in appeals court

The US Court of International Trade ruled Wednesday that the Commerce Department must investigate independent oil producers� complaints that four foreign nations "dumped" oil on the US market in 1998-99. In August 1999 the Commerce Department rejected a petition by Save Domestic Oil (SDO), which alleged Saudi Arabia, Venezuela, Mexico, and Iraq released crude in the US market at unfair prices, forcing many small producers out of business when oil prices sank as low as $10/bbl.


The US Court of International Trade ruled Wednesday that the Commerce Department must investigate independent oil producers� complaints that four foreign nations �dumped� oil on the US market in 1998-99.

In August 1999 the Commerce Department rejected a petition by Save Domestic Oil (SDO), which alleged Saudi Arabia, Venezuela, Mexico, and Iraq released crude in the US market at unfair prices, forcing many small producers out of business when oil prices sank as low as $10/bbl.

Judge Thomas Aquilino Jr., sitting in New York City, said Commerce should not have considered the opposition of larger oil companies, or of Venezuela and Mexico, to the SDO complaint. He ordered Commerce to investigate within 60 days if the allegations are merited.

Larger oil firms had said the complaint should be rejected because SDO represented only a small fraction of the industry.

Commerce�s International Trade Administration agreed. It ruled that the petitioners failed to meet the legal threshold of adequate industry support, and therefore declined to investigate the merits of the case.

The Clinton administration opposed the petition and assured Mexico, Saudi Arabia, and Venezuela that the case did not reflect the official views of the US government.

The conservative Cato Institute said, �At a time when gas[oline] prices are flirting with $2/gal and a winter of punishingly expensive home heating oil is approaching, such a development may seem flatly unbelievable.

�Last year Commerce Department officials tried to sweep this politically embarrassing case under the rug. But now it's come back to haunt them.

"This case is a perfect illustration of the economic insanity of the US antidumping law. Although its supporters claim that the law upholds 'fair trade' and a 'level playing field,' its real purpose is good old-fashioned protectionism�regardless of the consequences for other US industries or the overall economy.�

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