Case tests the legality of state boycotts

Economic boycotts and divestiture campaigns in the 1980s helped pressure the government of South Africa to abandon apartheid. Similar efforts have been launched more recently at the state and local level to encourage positive change in areas as diverse as Northern Ireland, Cuba, and Switzerland.

But not everyone views such humanitarian crusades as progress.

When Massachusetts enacted a boycott of companies doing business with the repressive military junta in Burma (also known as Myanmar), a coalition of international corporations filed suit to have the ban lifted.

Lawyers for the National Foreign Trade Council acknowledge the human-rights abuses and antidemocratic nature of Burma's military regime. But they argue that the state's tactics violate the US Constitution. They say that by refusing to award state contracts to companies dealing with Burma, Massachusetts is intruding into an area of jurisdiction - foreign commerce - that the Founding Fathers reserved exclusively to the national government.

Both a federal judge and a federal appeals court in Boston agreed with the trade group, striking down the boycott.

Today, the issue moves to the US Supreme Court, where the justices are being asked to define the extent to which state and local governments may attempt to influence events on the world stage.

It is a debate that pits human-rights activists against multinational corporations. But on a more fundamental level, it pits states' rights against the national government's authority to carry out US foreign policy without competition from states and local municipalities.

Analysts say the case is significant because a majority of justices may use it to more precisely define the power balance between states and the US government.

Recent decisions of the conservative wing of the court have tended to uphold states' rights at the expense of federal power. The court could use the case to define the outer boundary of state authority with a ruling striking down Massachusetts' Burma law. Or it could further expand its view of states' rights by reinstating the Burma boycott.

The decision will have major implications for state and local governments, which are themselves becoming increasingly important players in an expanding global marketplace of products, information, and ideas. On Burma alone, 22 US cities and counties, including New York, Los Angeles, and San Francisco, have passed similar boycotts.

"A decision by this court upholding the Burma law would give 50 state governments and 39,000 other local governments, with their massive purchasing power, free rein to initiate their own versions of foreign policy against any foreign nation," says lawyer Timothy Dyk in his brief on behalf of the trade council. "Allowing a thousand, or ten thousand, different foreign policies to bloom would be a detriment to the nation and contravene the constitutional plan."

Supporters of the Massachusetts law say the state-run boycott is consistent with the US government's policy of promoting human rights in Burma. They say Massachusetts is not attempting to direct foreign policy, but is merely choosing how to spend its own money.

"Nothing in our federal Constitution denies to the states the right to apply a moral standard to their spending decisions," says Thomas Barnico, an assistant Massachusetts attorney general, in his brief to the court.

One major issue the high court must resolve is whether the Massachusetts Burma law is a form of regulation or simply a consumer preference.

Regulation by state and local governments aimed at influencing foreign affairs is unconstitutional, legal analysts say, but consumer preferences are permissible.

"This is a really slippery area of trade policy and foreign affairs," says Robert Stumberg, a professor at Georgetown University Law Center who co-authored a friend-of-the-court brief in the case. "If the corporations win their case, private companies will have greater rights in the market than state and local governments do when they are acting as purchasers of goods and services for themselves," Mr. Stumberg says.

But Sydney M. Cone, an international trade professor at New York Law School, doesn't see it that way. "This is an effort by a state to regulate certain aspects of foreign commerce," he says.

The US can be a much more effective advocate for international human rights, and maintain a more efficient trade policy, if states and cities allow the federal government to speak to the rest of the world with a single, clear voice, Mr. Cone says

(c) Copyright 2000. The Christian Science Publishing Society