Augmenting OPEC?

Equatorial Guinea, the third-largest oil producer in sub-Saharan Africa and home of Africa's longest-serving dictator, has expressed interest in joining the Organization of Petroleum Exporting Countries (OPEC) as its fourteenth member. The bid for membership was presented by Gabriel Mbaga Obiang, President Teodoro Obiang's son and minister of mines and hydrocarbons in the Equatoguinean government, at an OPEC compliance monitor meeting in Vienna over the weekend. A government press release notes that oil and gas account for 95 percent of Equatorial Guinea's $10.6 billion in annual exports.

Last September, OPEC members agreed to cut oil production in an effort to boost sagging oil prices. Then, on December 10, ten non-OPEC oil-producing states including Russia and Equatorial Guinea agreed to join with OPEC members to cut production by a total of 1.8 million barrels per day through the first six months of 2017. For Equatorial Guinea, that means cuts of 12,000 barrels per day from a production level of 240,000 barrels per day.

In spite of apparently successful efforts by OPEC and the ten non-OPEC producers to cut production, the U.S. Energy Information Administration is predicting only modest increases in oil prices through 2017 and 2018. Thus far, the strength of domestic oil production in the U.S. has largely canceled out efforts elsewhere to raise prices by cutting production.

"Unsigning" the TPP

Earlier today Donald Trump "unsigned" the Trans-Pacific Partnership (TPP), a trade agreement involving twelve Pacific Rim states that was negotiated by the Obama administration in order to reduce tariffs while protecting labor rights, the environment, and intellectual property rights. Trump's action was applauded by Sen. Bernie Sanders while being criticized by a number of Republicans including Sen. John McCain and Sen. John Cornyn.

"Unsigning" the TPP was a largely symbolic act because it had not been ratified by the United States, nor was it likely to be given the hostility of Republicans in the Senate to virtually every proposal submitted by Barack Obama since they regained control of the chamber in 2015. Nevertheless, international law (in Article 18 of the Vienna Convention on the Law of Treaties) requires states that have signed but not yet ratified a treaty to "refrain from acts which would defeat the object and purpose" of the treaty. (The U.S. has also not ratified the Vienna Convention, but many of its provisions are considered binding as customary international law.) By signaling its intent to jettison the TPP, Trump has eliminated even the mild obligation to avoid acts contrary to the agreement's object and purpose.

More importantly, however, this action on the TPP, together with an announcement yesterday that Trump would seek to renegotiate the North American Free Trade Agreement (NAFTA), signals the beginning of an effort to reverse a longstanding bipartisan policy of promoting free trade. Since the creation of the Bretton Woods system at the end of World War II, the United States has encouraged--and often led--global efforts to expand trade in the belief that free trade increases wealth while also promoting peace. Free trade, in fact, is an important part of the post-World War II global security architecture. Trump's "America First" approach threatens American prosperity and security.