When Local Government Runs Afoul of Foreign Policy

This is some state of affairs--but then again, this is some state.

The wayward onetime republic called California has always steered its own course, hanging out over the edge of the continent and the culture with greenthink and voter initiatives, and more “firsts” than a Communist-bloc Olympic team on steroids, among them: the first state to ban smoking in restaurants, to legalize doctor-assisted suicide, to ban certain assault weapons, the first state with a fill-in-the-blank will, and of course the first to aggressively deregulate electricity, which, if you’re having to read this by flashlight, you already know.

California was the first state to ban goods made in overseas slave labor camps. California cities, too, have cut their own swath. Los Angeles, the first to boycott Salvadoran coffee to pressure for an end to that country’s civil war, was the first big U.S. city to sever financial ties to the apartheid government of South Africa, a course California would follow a year later.

And last year, Los Angeles added its name to the roster of cities barring municipal business with companies doing business in Burma, now Myanmar, a nation under repressive military rule--on the same principle that cities once practiced with apartheid.

At about the same time, California banned the gasoline additive MTBE, after the possibly cancer-causing chemical turned up in ground water from Santa Monica to Lake Tahoe.

As unrelated as they seem, two different federal authorities have put a crimp in the style and intent of cities and state in enacting them.

*

A couple of centuries and some change after the Boston Tea Party boycotted tea, Massachusetts, like Los Angeles, boycotted state trade with firms dealing with Myanmar.

Business groups hauled Massachusetts into court, and the Supreme Court ruled that Massachusetts was unconstitutionally trying to make foreign policy beyond what Congress had already done about Myanmar. That ruling evidently guts ordinances like Los Angeles’, too.

The same month, a federal judge in Sacramento stopped California from trying to help Holocaust survivors by forcing insurance companies to turn over lists of policies they sold in Europe before World War II.

The judge said California’s Holocaust insurance law “interferes with the federal government’s control over foreign affairs.”

But another document may pull some of California’s regulatory teeth: NAFTA.

After the chemical MTBE was ordered phased out, a Canadian company that makes an MTBE ingredient filed a claim against the U.S. for almost a billion dollars. Under NAFTA’s Chapter 11, Mexican, Canadian and U.S. businesses can make claims if an official decision interferes with their profit potential--and nine or 10 have already. Mexico complained to NAFTA that delays banning Mexican trucks from rolling freely along U.S. roads were costing it billions, and it won; any truck that meets U.S. safety standards can travel U.S. roads.

It’s a through-the-looking-glass riddle, a foreign business’s rights trumping a state government’s. A California law could stop a Los Angeles firm from doing something that a foreign-based company could claim the right to do anyway.

More Lewis Carroll moments: Democrats arguing for another kind of states’ rights. Atty. Gen. Bill Lockyer’s office is “concerned if there’s an erosion of state’s rights when it comes to protecting health and safety.”

State Sen. Sheila Kuehl (D-Santa Monica) heads a select committee on international trade and state sovereignty. The problem, she says, arises when the Feds negotiate trade agreements that “could be in conflict with a state’s ability to decide for itself what its environmental and safety and labor and all kinds of laws ought to be.”

The MTBE matter is “just the tip of the iceberg in terms of businesses claiming they ought to be able to make acid rain or bring in unsafe trucks under these agreements, or they’ll sue the United States, and California doesn’t have the right to go to the [negotiating] table.”

Down the road, she worries, a federal government that keeps having to pay out billions to foreign businesses to protect state laws might begin asking questions “about its 50 states having these strong laws.”

*

A few years back, students at Monroe High School in the San Fernando Valley were horrified to learn that kids their own age were stuck in overseas factories making soccer balls they could never afford to buy or have time to play with. They persuaded the school district and the Board of Supervisors to stop buying sports gear made by child labor.

They were praised for their citizenship and their activism; next time, though, someone may be letting the air out of their soccer balls.

*

Patt Morrison’s column appears Wednesdays. Her e-mail is patt.morrison@latimes.com