U.S. Senator John Hoeven (R-N.D.) had some harsh words for the Organization of Petroleum Exporting Countries (OPEC) when he delivered the Republican Party’s weekly address on Jan. 9.
“Make no mistake, we are locked in a global battle to determine who will produce oil and gas in the world in the future,” he said. “Will it be OPEC? Russia? Countries like Venezuela? Or will it be us, the United States?”
Hoeven noted that OPEC’s production policies are designed to “exert their historical dominance over oil markets and energy prices” and harm U.S. businesses. That, he said, is why Americans need smart energy policies in defense.
“Americans have seen what it means to depend on OPEC for their energy needs, and they don’t want to go back to that era of embargoes and high prices at the pump, as Europe faces with Russia and OPEC today,” he explained.
Of course, Hoeven is also aware that energy isn’t the only sector where foreign subsidies and market manipulation puts Americans at a competitive disadvantage.
“Americans can compete with anyone, anywhere and anytime, but we need to empower them to do so,” he explained. “We need to help industries across the board – our farmers, ranchers, and small business, the backbone of our country – to grow and create the good jobs of the future.”
Take for example, Brazil, which is also known as the OPEC of sugar. Brazil used decades of subsidization, currency devaluations, and more than $2.5 billion a year in government handouts to gain a stranglehold on the global sugar market.
Today, it controls about half of global sugar exports, which gives Brazil unparalleled price-setting power. By comparison, Saudi Arabia of the real OPEC, produces just 19% of crude oil exports.
Unfortunately, Brazil’s market dominance has also given rise to subsidies in other countries seeking market share. And those additional subsidies – in places like India and Thailand, which are the world’s second and third biggest sugar producers and exporters – are only further depressing global prices. As a result, today’s prices don’t even cover half the cost of producing sugar.
Ultimately, something must be done to bring about a free global sugar market where the most efficient producers are rewarded instead of the most coddled. That means reining in sugar’s OPEC, fighting foreign subsidies and predatory trade practices, and ensuring that U.S. policy is not unilaterally disarmed.
And that means we need more and more leaders like Sen. Hoeven who are unafraid to call out international cheaters and advocate for America.
Bottom line: Our country cannot depend on an OPEC for its food anymore than it can depend on OPEC for its energy.