Trade group to challenge Mass. law

[sbillenness@xxxxxxxx]

Trade group to challenge Mass. law in Burma 

Will file lawsuit over targeting of firms doing business with nation

By Theo Emery, Globe Correspondent
Boston Globe
February 24, 1998

Raising the stakes of debate over unilateral sanctions, a trade group
representing a coalition of more than 600 major US corporations said
yesterday it plans to challenge Massachusetts over a first-in-the-nation
law targeting companies that invest in Burma. 

 In a Feb. 4 memorandum to members of the USA Engage coalition, Frank D.
Kittredge, president of National Foreign Trade Council, said the trade
council planned to file suit by March 30 challenging the constitutionality
of the Bay State law, which handicaps companies conducting business in
Burma that also compete for state contracts. 

"The current thinking is to file in two different jurisdictions," Kittredge
wrote to the 660-member USA Engage, an ad hoc coalition of business and
trade organizations that oppose federal, state, and local sanctions against
foreign governments. 

Kittredge also said in the memo - printed last week in the Arlington,
Va.-based trade policy newsletter Inside US Trade - that a second lawsuit,
as yet undetermined, will be filed possibly in April or May. That suit,
according to Inside US Trade, could target cities and counties outside of
Massachusetts that have similar laws sanctioning countries accused of human
rights violations. 

USA Engage officials were not available to comment. 

There are more than 40 state, city, and county boycott laws sanctioning
countries such as China, Burma, and Nigeria, according to the nonprofit
Investor Responsibility Research Center. Twenty of those laws - including
an ordinance passed in Somerville two weeks ago - target Burma's governing
junta. Sixteen other laws are pending, including a Massachusetts law aimed
at the government of Indonesia. 

If the suit, which could cost NFTC $600,000 to $800,000, succeeds, it could
deal a blow to human rights activists who see such laws as a weapon for
punishing governments with poor human rights records. At the height of the
antiapartheid movement, 71 state and local selective purchasing laws
leveled sanctions against South Africa. 

While several laws targeting South Africa were challenged in the 1980s,
federal courts have never definitively ruled on the constitutionality of
such laws, according to Robert Stumberg, a Georgetown University law
professor who has analyzed the Burma law. 

 The Burma law, said Stumberg, is "just the tip of the iceberg."

"State and local governments are aware that the world economy is much more
integrated than it was. Their consumer choices will either help or hurt the
interests of democracy, and the economic or moral interests of state
taxpayers," said Stumberg. "This is pretty gray turf we're on here. It's
not black and white.''

Representative Byron Rushing, a Democrat from the South End and sponsor of
the law, said the National Foreign Trade Council is using Massachusetts as
a test site for sweeping such laws off the books nationally, and he
believes the effort will backfire. 

"The major concern we have is that this suit represents a new attitude on
the part of American corporations," said Rushing. "The signal that is going
to go out to human rights activists is that these corporations are not
going to work with people who are trying to restore human rights. I think
this is going to be a public relations nightmare for these companies."

Lawmakers passed the "selective purchasing" law in 1996 in response to
Burma's long history of human rights abuses and suppression of a
prodemocracy movement. Modeled on laws aimed at South Africa's former
apartheid system, the Commonwealth's Burma law was the first statewide
boycott law - and the largest - to penalize companies doing business in
Burma, also known as Myanmar, that compete for contracts with Bay State
agencies. 

Several major firms, including Apple Computer, Hewlett-Packard, and
Motorola, subsequently severed ties to the Southest Asian nation, citing
the law among their reasons. 

As the number of boycott laws have grown, so has opposition. 

Massachusetts has come under fire from members of the World Trade
Organization, who say the Burma law violates voluntary trade commitment
known as the General Procurement Agreement. Japan and the European Union
have sought to form a WTO dispute panel to determine if the law violates
the agreement. Earlier this month, Massachusetts lawmakers met with EU and
British officials in Boston to discuss the conflict. 

This story ran on page D06 of the Boston Globe on 02/24/98. 
© Copyright 1998 Globe Newspaper Company.
==========================================