Massachusetts Burma Law Struck Down
On June 23, the First Circuit Court of Appeals in Boston struck down the 1996 Massachusetts Burma Law because it violated two articles of the constitution: 1) the prohibition against states regulating commerce if it unduly burdens interstate or foreign transactions; and 2) the supremacy of federal policy over state power. The judge ruled that "The conduct of this nation's foreign affairs cannot be effectively managed on behalf of all the nation's foreign citizens if each of the many states and local governments pursues its own foreign policy."
The Massachusetts Burma Law placed a 10 percent penalty on bids from companies with investments in Burma. As a way to protest the long-standing human rights violations in Burma (now called Myanmar), this selective purchasing law was one of 20 other similar laws implemented in states like Oregon, New York, and California. Unless an appeal is made the US Supreme Court by Massachusetts Attorney General Tom Reilly, and the ruling is reversed, states' freedom to regulate the spending of state tax money will be limited to domestic affairs.
The National Foreign Trade Council, a coalition of corporations, instigated this suit against Massachusetts by claiming that 30 of its 580 members had been adversely affected. The law caused companies like Apple Computer and Hewlett-Packard to leave Burma and placed others like Johnson & Johnson and Procter & Gamble on the state's restricted list. In protest against this law, business leaders have argued they have a need for freedom to do business abroad. In addition, the European Union and Japan appealed to the World Trade Organization (WTO) to reject this law because it violates the members' agreement not to use non-economic criteria to negotiate contracting bids.
The proponents of the Massachusetts Burma Law range from two dozen members of Congress to human rights organizations and antiBurma junta activists. These groups have argued in favor of the state's right to favor its citizens preferences for the sale and purchase of goods and to link morality with state spending, and point to the effectiveness of similar sanctions imposed on trade with South Africa during the apartheid era.
It is questionable whether the impact of such laws, at the state level, are substantial enough to justify. Since state purchases are relatively small, such laws have been criticized as "feel good measures that don't work." However, leaders like Aung San Suu Kyi, leader of the National League for Democracy in Burma, have advocated for these laws, because they believe international trade is sustaining the oppressive regime in Burma.
Even though several states have passed similar laws to Massachusetts, major economic powers have chosen to deal with Burma through a policy of constructive engagement rather than isolation. US competitors have seized the opportunity to increase their market share, and organizations like the Association of South East Asian Nations, have accepted Burmese membership -- incorporating the country into the greater international community. Currently, the Massachusetts law needs additional support at the both the state and federal level to make it work and to make a political statement.
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