• News

States, Cities Slap Sanctions Against Foreign Powers

WASHINGTON (AP) - Showing that some Americans care deeply about what happens in far-off lands, cities and counties in eight states are slapping sanctions on foreign governments. But their ventures into free-lance foreign policy are raising concerns at the State Department and abroad. At least 26 communities and the state of Massachusetts have imposed sanctions on companies that deal with repressive governments in Nigeria, China, Cuba or Myanmar. Other cities and states are considering similar action, including several targeting Switzerland because of its dealings with Nazi gold. "Resort to unilateral sanctions has become almost a fad," said Clayton Yeutter, who was U.S. trade representative in the Reagan administration. The State Department says such state and local actions can do more harm than good, however well intentioned. "Sanctions may impair the president's ability to send a clear and unified message to the rest of the world," Deputy Assistant Secretary of State David Marchick told Maryland legislators. "They can impede ... conduct of foreign policy. They can create conflicts with our allies with whom we need to work to achieve common goals." Marchick is one of several U.S. diplomats who have had to embark recently on unusual domestic missions to lobby against such laws. European representatives also have found themselves dealing directly with state legislators and city council members. U.S. companies such as Apple Computer, Eastman Kodak and Hewlett Packard pulled out of Myanmar, also known as Burma, when Massachusetts enacted a law in 1996 imposing penalties on bidders for state contracts if the company also does business with the Asian country. State Rep. Byron Rushing, who wrote the Massachusetts bill, said it helped pave the way for President Clinton to impose federal sanctions against Myanmar last year. "We showed there was support at the grass-roots level for action against Burma to influence our own government as well as Burma to advance the cause of human rights," Rushing said. Europeans and Canadians are angry over U.S. government sanctions against companies doing business in Cuba and Iran. Now they face the prospect of diplomatic confrontations with individual states and cities. While trying not to tell state and local governments to ignore human rights and other emotional issues relating to other countries, the State Department wants them to word any measures in ways that will not cause trade problems with allies. Congress also is looking into the impact of federal sanctions on U.S. businesses and jobs. The State Department has established a sanctions team that is expected to report soon to Capitol Hill. The National Trade Council, which represents about 550 corporations, says it plans to file a lawsuit later this month contending that state and local sanctions violate the Constitution. The Constitution gives the federal government the power to regulate commerce with foreign nations and prohibits states from entering into agreements or engaging in war with foreign powers. "Only the federal government has responsibility over foreign relations and foreign commerce," said Dan O'Flaherty, a trade council vice president. "State legislators and city councilmen may be pleased, but these laws are a threat to the national interest." Corporations are concerned that free-lance foreign policy pronouncements by state and local governments could limit opportunities for exports and investment abroad. Business groups also argue that local and federal sanctions are ineffective, damage relationships with allies and make U.S. companies less competitive. Todd Malan, executive director of the Organization for International Investment, which represents 60 U.S. subsidiaries of companies based abroad, said such sanctions "threaten investment by foreign-owned companies that create jobs for Americans." City councils in Oakland and Berkeley, Calif., and Amherst, Mass., have targeted Nigeria. New York City is one of more than 40 municipalities that have passed resolutions against religious discrimination in Northern Ireland. The actions do not impose sanctions but require contractors to sign pledges to hire both Catholics and Protestants if they do business in Northern Ireland. Last month, city and state officials in New York decided to delay planned sanctions against Swiss banks after the banks announced they would negotiate a global settlement with Holocaust victims over gold stolen by the Nazis. Most of the state and local sanctions put on the books since 1995 are modeled on economic measures taken by various local governments against South Africa's racist policies in the mid-1980s. Alan Larson, assistant secretary of state for economic affairs, said the South African measures may have had an important effect in speeding the downfall of apartheid. But, he said, they "were swimming with the tide of public opinion, not cutting across trading rights or political rights of our major partners. We do know it's possible for sanctions to be introduced in a way that hits the intended target rather than distracting attention with trading disputes." Since the 1980s, the United States has signed treaties that bar sanction laws and give other nations the right to demand compensation if their companies are affected. The European Union warned last month that failure to resolve a dispute over Massachusetts' sanction law would result in bringing a case before the World Trade Organization. The State Department would have to defend Massachusetts before the WTO. Individual states have no standing before the world body.

User Response
0 UserComments