From: Arvind Kumar
How the US uses WTO to act against India's interests
In recent months, the American government has used the World Trade Organization to target India for creating a buffer stock of food grains for use during emergencies. According to the WTO economists, this is an unfair subsidy which distorts the global markets. At the same time, these economists have neglected the fact that the US government has created a huge reserve of crude oil and natural gas.
The US and its allies which are members of the International Energy Agency stock up hundreds of millions of barrels of crude oil as part of their "strategic" reserves. The US also hoards up on heating oil ostensibly to prevent disruptions to the supply.
In other words, it is unacceptable when India creates a buffer stock of food grains as it distorts the marketplace, but it is perfectly acceptable that the American government hoards up on petroleum products as it supposedly prevents the distortion of supplies.
The quantity of crude oil in the US government's reservoirs has a direct impact on the global markets. Every Wednesday, at exactly 10:30 in the morning on the east coast of the US, the US Department of Energy puts out its storage numbers for the week. Almost every trader who trades in crude oil ceases trading before the numbers are put out while some firms speculate on these numbers and publish their expectations. Within an instant of the actual number being published by the government, there is a great frenzy in the markets as the traders run like a huge herd of stampeding buffaloes in one direction or the other depending on whether the numbers indicate a shortage or oversupply as measured against the speculations of the industry. The same process is repeated for natural gas on Thursday mornings. If the distortions in the global markets due to hoarding is a concern, the American reserves clearly need to be eliminated.