Excerpts from "States' Rights and Foreign Policy" -- free trade, unilateral and economic trade sanctions

Excerpts from "States’ Rights and Foreign Policy"

Brannon P. Denning and Jack H. McCall

Foreign Affairs

January/February 2000

"In National Foreign Trade Council v. Natsios, decided, in June 1999, the U.S. Court of Appeals for the First Circuit struck down a Massachusetts statute that banned companies with direct or indirect business interest in Burma from competing for state contracts. The statute’s terms were so broad that if a company owned a subsidiary in Burma, the parent company would be deemed to be ‘doing business with Burma’ and be prohibited from bidding on contracts to supply goods to Massachusetts - even if the subsidiary was in a completely different line of business.

"A federal district court had first struck down the statute in November 1998, ruling it an impermissible encroachment on the federal prerogative to conduct foreign affairs. … ‘State’s interests,’ the district judge wrote, ‘no matter how noble, do not trump the federal government’s exclusive foreign affairs power.’

"When its turn came, the court of appeals went even further. It found that in addition to transgressing the Constitution’s structural boundaries, the statue discriminated against foreign commerce, which states are forbidden to do. … The appeals court rejected Massachusetts’ argument that it had a right not to support, directly or indirectly, regimes whose human rights records it found objectionable. Laudable humanitarian aims, the court held, did not license states to violate the Constitution."

"[D]espite [state sanctions] peculiar transideological charm, local sanctions represent an attempt by states to co-opt the power to set foreign policy - a power that the Constitution, as the courts have long recognized, quite clearly allocates to Washington.

"Articles I and II of the Constitution place primacy for the conduct of foreign and military affairs squarely with Congress and the president."

"Moreover, states are expressly forbidden by Article I, Section 10, of the Constitution from entering into treaties, alliances, agreements, or compacts with foreign powers; from making war; and from laying certain taxes on foreign commerce without congressional consent.

"It is hardly credible to look at the Constitution’s assignment of power and its proscriptions on state involvement in foreign affairs and to argue that, absent an express ban, states are free to impose sanctions on foreign countries."

"The First Circuit’s decision in Natsios should remind states that just as there are constitutionally mandated realms into which the federal government cannot intrude, the federal government also has its own exclusive provinces. … Although Congress has the unquestioned power to halt all sanctions initiatives if it wishes, doing so would divert legislative resources from other national concerns or force Congress to react long after damage has been done to the nation’s foreign policy."

"Despite the otherwise welcome invigoration of federalism in the legislative and judicial branches of government, Washington still must be given pride of place in the conduct of foreign affairs and the regulation of foreign commerce. Without the central government’s lead, the United States risks returning to the Balkanization of its national interests that necessitated the Constitution in the first place.

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