High Court to Consider Global Case

Multiple choice quiz:

The most far-reaching decision of 2000 for U.S. foreign policy will be made by (a) President Clinton, who’s trying to work out a deal for peace in the Middle East; (b) Congress, which is being asked to vote to make China’s trade benefits permanent; or (c) the Supreme Court.

The correct answer could well turn out to be (c). That’s right, Scotus, the Supreme Court of the United States, not Potus, the prez.

The justices will hear arguments next week and decide by July a case that could well shape the structure of America’s interactions with the rest of the world for decades to come.

The pending case raises profound questions the court has not decided before: Does U.S. foreign policy have to be decided in Washington? Do state and local governments have any constitutional authority to act on their own? How much leeway is there for grass-roots movements to sponsor local economic sanctions against foreign countries?

Before the court is the 1996 Massachusetts Burma Act, which sought to make it more difficult for companies that did business in Myanmar (Burma) to be awarded any of the $2 billion a year in state procurement contracts. Any bid for a contract by such a company was automatically raised by 10%, decreasing the chances that its bid would win.

The legislation was a way of expressing moral condemnation and putting some economic pressure on Myanmar’s military junta. That regime continues to repress the democratic movement led by Nobel Peace laureate Aung San Suu Kyi, whose supporters won the country’s last elections in 1990.

The Massachusetts law is no isolated case. It was modeled on similar selective-purchasing provisions passed in the 1980s that denied state or local contracts to companies doing business in South Africa. The courts never ruled on the constitutionality of the South Africa sanctions.

After Massachusetts passed its legislation, several big cities with economic clout, including Los Angeles, New York and San Francisco, approved “Burma laws” of their own. So did a slew of small, progressive college towns and other jurisdictions sometimes mockingly called “people’s republics”: Berkeley, Palo Alto, West Hollywood, Cambridge, Mass., Chapel Hill, N.C., and Takoma Park, Md.

Over the last few years, state and local governments also have enacted laws that penalize companies doing business in other countries, including Northern Ireland, Nigeria, Indonesia and Cuba.

All of these state and local sanctions, it would appear, will be affected by the upcoming Supreme Court case.

In it, the Clinton administration, American corporations and European governments are urging the court to rule that only the federal government--and not a state or city--has the authority to impose sanctions.

Congress passed its own law imposing economic sanctions on companies operating in Myanmar. But Congress acted only after the Massachusetts sanctions were enacted and began to spread elsewhere. And the U.S. sanctions are weaker: They cover only U.S. companies and only new investment in Myanmar.

“The Constitution assigns to the national government the exclusive responsibility to direct the United States’ relations with other countries,” the Clinton administration claims in a friend-of-the-court brief.

The opponents of the Burma law raise the specter that if such measures were allowed to proliferate, America would return to the era of the Articles of Confederation--the period in the 1780s when the weak central government was unable to enforce its authority over the states.

In a sense, the Supreme Court case contains echoes of December’s demonstrations against the World Trade Organization in Seattle.

Human rights groups, environmentalists and other nongovernmental organizations have lined up in support of Massachusetts’ authority to impose sanctions. Corporate opponents portray the state law as the wedge for a massive Populist attack against free trade.

“There is no logical limit to the range or number of international causes that may be deemed worthy of trade sanctions by a state or locality at any given point in time,” warns the U.S. Chamber of Commerce in its brief.

The sanctions case takes on added importance because the conservative-leaning Supreme Court has been gradually expanding the constitutional powers of state governments. But this string of states’ rights rulings has not yet expanded into the field of foreign policy.

Massachusetts argues that while the federal government has exclusive authority over matters of war and diplomacy, states and cities can decide how they want to spend their own money.

“Nothing in our federal Constitution denies to the states the right to apply a moral standard to their spending decisions . . . [or] requires the states to trade with dictators,” the state maintains.

That’s an appealing argument. It may ring true with the current Supreme Court. And if so, the court’s decision could have a more lasting impact than even a Middle East peace agreement.

Jim Mann’s column appears in this space every Wednesday.