16 May 1997
The Washington Post
By Paul Blustein
Thinking Globally, Punishing Locally
States, Cities Rush to Impose Their Own Sanctions, Angering Companies and Foreign Affairs Experts
Here is a multiple choice question. Foreign policy is made by: (A) the federal government; (B) state governments; (C) local governments.
To people familiar with the Constitution, "A" might seem the obvious answer. But lately, "all of the above" looks like the correct response, in view of the rapid spread of economic sanctions imposed by state and local governments against foreign regimes they consider objectionable.
This week, the New York City Council approved a ban on city government purchases from any company doing business in Burma because of human-rights abuses by the Burmese military government (which calls the country Myanmar). The bill is subject to Mayor Rudolph Giuliani's signature. Meanwhile, the City Council's powerful speaker, Peter Vallone (D), also introduced a bill aimed at China and 14 other countries in which Christians are allegedly persecuted for their religious beliefs. That bill would prohibit The developments in New York marked a major escalation in a movement that has gone far beyond the "nuclear-free zones" passed years ago by Berkeley, Calif., Takoma Park, Md., and other relatively small jurisdictions.
Massachusetts and San Francisco have banned official purchases from companies doing business in Burma, and similar bills are pending in several state legislatures, including those of California, Texas and Connecticut.
The Massachusetts legislature is considering adding Indonesia to its list of countries that must be eschewed by companies doing business with the state. Rhode Island also is weighing an anti-Indonesia bill, and the Oakland, Calif., City Council is consi dering similar action against Nigeria.
Such laws are raising alarm among foreign affairs experts and business lobbyists, who fear a crazy quilt of local legislation that will undermine the coherence of U.S. foreign policy and damage U.S. economic interests. "This is the democratization of fo reign policy run amok," fumed Richard N. Haass, director of foreign policy studies at the Brookings Institution.
The laws raise the specter of multinational companies being forced to make costly choices between giving up lucrative contracts with government agencies or forgoing business in some of the world's most promising markets. Some firms have pulled out of Bu rma in part because of local government sanctions. While Burma is too poor to matter much to most multinationals, penalties aimed at fast-growing and large economies such as China or Indonesia could hurt them badly.
Under Vallone's proposed bill, for example, if PepsiCo Inc. doesn't stop conducting business in China, New York City would stop buying soft drinks from the company for its school cafeterias, Vallone said.
"The City of New York has the fourth-largest [government] budget in the country," Vallone said in a telephone interview. "So you're talking about a lot of money, and we're going to use what influence we have to try and correct an evil that we see going on."
Vallone, who pointed out that similar local laws were passed during the last decade against the pro-apartheid regime in South Africa, said he was stirred to action by tales he heard about alleged persecution of Christians.
"Our preliminary indication is that the PLA -- the [Chinese] People's Liberation Army -- as recently as last month was killing thousands of people," he said. Asked what incident he was talking about, Vallone corrected himself, saying, "In that case, it was hundreds of people." Aides later conceded that their boss "misspoke," though they cited several articles and congressional resolutions asserting that from three to eight Christian clergymen and evangelicals had been killed by Chinese authorities ove r t All this poses a multijurisdictional nightmare for business lobbyists. They already had their hands full trying to combat a growing tendency by Congress and the Clinton administration to use trade sanctions as punishment against various regimes.
"We were very concerned about the proliferation of sanctions at the federal level," said Howard Lewis, vice president for trade at the National Association of Manufacturers, who argues that unilaterally cutting off U.S. economic ties with countries such as Burma simply causes the target nation to switch its trade to French, German or Japanese companies. "The fact that we're now beginning to see an explosion of sanctions at the state and local levels clearly underlines that this thing has just gone too fa But supporters of sanctions assert that states and cities have a perfect right to dispense their money as they see fit, and that they have a moral duty to act when Washington hangs back.
"The real threat to effective foreign policy is not the 50 states," said Simon Billenness, an analyst at Franklin Research & Development Corp., a Boston investment firm that buys shares only in companies it deems socially responsible. "It's the Fortune 500."
Many state and local governments are imposing sanctions -- or are considering them -- against foreign regimes they consider objectionable. The sanctions usually involve banning govern-ment purchases from companies that do business in the offending count ry.
CALIFORNIA
Sanctions against Burma:
* Alameda County
* Berkeley
* Oakland
* San Francisco
* Santa Monica
* State of California (pending)
Sanctions against Nigeria:
* Oakland (pending)
COLORADO
Sanctions against Burma:
* Boulder
*State of Colorado (pending)
TEXAS
Sanctions against Burma
(pending)
MICHIGAN
Sanctions against Burma:
* Ann Arbor
WISCONSIN
Sanctions against Burma:
* Madison
NORTH CAROLINA
Sanctions against Burma:
* Carrboro
* Chapel Hill
* State of North Carolina (pending)
MASSACHUSETTS
Sanctions against Burma; Sanctions against Indonesia (pending)
NEW YORK CITY
Sanctions pending against Burma and countries that allegedly persecute Christians (Including China, Indonesia, Saudi Arabia, Egypt, Pakistan )
RHODE ISLAND
Sanctions against Burma, Indonesia
(pending)
CONNECTICUT
Sanctions against Burma (pending)
SOURCE: State and Municipal Sanctions Report
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