NEWS - Winds May Be Shifting for S.

[Rangoonp@xxxxxxx]

Subject: NEWS - Winds May Be Shifting for S.F.'s Foreign Policy 

(SHOW SUPPORT FOR SAN FRANCISCO'S EFFORTS)

Winds May Be Shifting for S.F.'s Foreign Policy / States and cities
that refuse to do business with foreign governments are starting to
face legal challenges
San Francisco Chronicle; San Francisco, Calif.; Jul 11, 1999; Reynolds
Holding;

Sub Title:
             [SUNDAY Edition]
Column Name:
             HOLDING COURT
Start Page:
             3/Z1

Abstract:
What government has urged the Pope to establish diplomatic relations
with
Israel, endorsed a boycott of Salvadoran coffee, encouraged companies to
hire Catholics in Northern Ireland, complied with an international
treaty
against gender discrimination and shunned firms doing business with
South
Africa and Myanmar?

The answer, of course, is San Francisco, the city with no clue on how to
fix
Muni or help the homeless but a foreign policy so sophisticated that it
would
put the efforts of many nations to shame.

Since their heady success pressuring South Africa to end apartheid more
than 20 years ago, states and cities have wielded the power of the purse
to
change policy all over the world. Scores of local governments won't do
business with companies involved in Nigeria, Cuba or Tibet. They won't
buy
old-growth tropical hardwoods or products without enough recycled
material.
California refuses to purchase anything made with slave labor.

Full Text:
Copyright Chronicle Publishing Company Jul 11, 1999


Chronicle legal affairs writer Reynolds Holding can be reached by
telephone
at (415)
777-7136, online at holdingr@xxxxxxxxxx or by fax at (415) 896-1107.

First, a riddle.

What government has urged the Pope to establish diplomatic relations
with
Israel,
endorsed a boycott of Salvadoran coffee, encouraged companies to hire
Catholics in
Northern Ireland, complied with an international treaty against gender
discrimination and
shunned firms doing business with South Africa and Myanmar?

The answer, of course, is San Francisco, the city with no clue on how to
fix
Muni or help
the homeless but a foreign policy so sophisticated that it would put the
efforts of many
nations to shame.

Although this distinction draws plenty of snickers as well as praise for
the
city's social
conscience, serious legal challenges have yet to emerge over San
Francisco's

meddling in
matters best left to the federal government.

But there may be trouble down the line.

It comes from Massachusetts, where a federal appeals court recently
dumped a
law
limiting the state's dealings with companies involved in Myanmar.

The ruling won't affect San Francisco immediately because the court has
no
jurisdiction
here. But it is a compelling precedent that could spread quickly --
unless
the U.S.
Supreme Court guns it down.

Which, you would think, is about as likely as the high court's
conservative
majority getting
cozy with San Francisco on any number of wacky policies. This time,
though,
you would
be wrong.

Since their heady success pressuring South Africa to end apartheid more
than
20 years
ago, states and cities have wielded the power of the purse to change
policy
all over the
world. Scores of local governments won't do business with companies
involved
in
Nigeria, Cuba or Tibet. They won't buy old-growth tropical hardwoods or
products
without enough recycled material. California refuses to purchase
anything
made with
slave labor.

At first the policies were rarely challenged in court, tolerated as a
harmless vent for the
social consciences of San Francisco and Berkeley and other activist
enclaves.

But then they started to work.

In 1996, Massachusetts became the first of more than a dozen cities and
states to pass a
law restricting purchases from companies doing business with Myanmar,
formerly
known as Burma, perpetrator of brutal human-rights violations. Many
companies stopped
doing business there -- at least three because of the Massachusetts law.

This did not sit well with the companies or with Japan and other
American
trading
partners with industries cut off from the Massachusetts market. So the
companies sued,
claiming violations of the U.S. government's exclusive power over
foreign
affairs.

A U.S. district judge in Boston bought the company line. Then, late last
month, the U.S.
Court of Appeals upheld the judge's ruling, becoming the first federal
appellate court ever
to strike down a local government's purchasing-boycott law.

Not only did the measure interfere with Washington's control over
foreign
policy, the
three-judge panel said, it violated the right of the feds to regulate
commerce and
conflicted with congressional sanctions against Myanmar.

"Massachusetts," said the court, "cannot set the nation's foreign
policy."

Which is undeniably true. But there is another way to look at this case.

Local governments make decisions every day about whom to buy from, and
the
choices
are not based only on cost or quality. Other considerations can include
military service or
company size or -- except in California -- race or gender of the seller.
Morality can be a
factor too, as in, we're not going to do business with some company
associated with the
mob.

The point is, a state or city serves its residents not only by
supporting
the disadvantaged
among them but by avoiding shady characters who would taint its
purchasing
practices.
And characters don't come much shadier than the despots in the Burmese
government.


The appeals court in Boston, though, says that doesn't matter. America
must
speak to the
world with one voice, the court says, and regardless of the public's
interests, local
officials have no business discriminating among sellers based on
conditions
abroad.

It's a tough argument to crack -- particularly with NAFTA and other
recent
treaties
barring signatories from discriminating against one another's
industries.
But if there was
ever a Supreme Court likely to side with the states, counties and cities
on
this issue, the
one run by Chief Justice William Rehnquist is it.

Just look at three opinions the court issued last month. Two said
Florida
can't be sued for
federal patent or trademark violations. The third said Maine can't be
sued
for breaking
federal overtime laws.

The message: States deserve more power, the national government less.

It's a theme running in various forms through several high-court
decisions
in recent years
and a goal supported passionately by Rehnquist. Now that the chief
justice
apparently has
four other justices on his side -- and more states' rights cases coming
up
next term -- the
chances of a profound shift in power from Washington to the state
capitols
and city halls
of America have never been better.

Whether this translates into a ruling that local governments get to shun
sellers who deal
with brutal governments is a tricky issue. To some extent, we're talking
about foreign
policy here, and the justices may tell the locals to back off.

But it's easy to see the court embracing the view that who buys what
from
whom is
fundamentally a local matter and a good example of federal authority run
amok.

It won't do much for Muni, but it will keep the tin-pot diplomats at
City
Hall in business.