New Articles on WTO Suit Against Ma

[sbillenness@xxxxxxxx]

Subject: New Articles on WTO Suit Against Massachusetts Burma Law

NEW ENGLAND BURMA ROUNDTABLE

June 26, 1997

ARTICLES ON WORLD TRADE ORGANIZATION SUIT AGAINST MASSACHUSETTS BURMA LAW

1. Letter From European Commission Vice President Sir Leon Brittan to US
Trade Representative Charlene Barshefsky, June 19, 1997
2. AFP, "Europe to take Massachusetts Burma law to WTO," June 20, 1997
3. Boston Globe, "Group to fight Mass. Burma law," June 21, 1997
4. Financial Times, "Brussels worried by law on Burma," June 24, 1997

Simon Billenness
* for the New England Burma Roundtable *
Franklin Research & Development
711 Atlantic Avenue, Boston, MA 02111
(617) 423-6655 x 225
(617) 482 6179 fax
sbillenness@xxxxxxxx
=========================================

The Right Honorable 
Sir Leon Brittan, OC
Vice-President of the European Commission

19 June, 1997

Dear Charlene,

Thank you for your letter of 5 June 1997 setting out the steps which the US
Administration has taken and continues to take to seek to address the
concerns the Community has raised about the Massachusetts law on Burma and
other similar initiatives.

I emphasise that we share common concerns about the situation in Burma.
This is demonstrated in the EU?s Common Position on Burma adopted on 25
October 1996, and by the fact that the EU has withdrawn Burma?s GSP
preferences.  Our objections to the Massachusetts law relate to what we
consider to be a breach of US international obligations.

I am encouraged by the news, which we have also heard from other sources,
that a Massachusetts legislative Committee has reported favorably on an
amendment to the draft Massachusetts legislation on Indonesia which would
exempt procurement contracts of values above the GPA thresholds from the
scope of the legislation.  This is a welcome development.  I hope to see
similar exceptions made by other sub-federal authorities who have adopted
or are considering adopting selective purchasing laws.

Nevertheless, you will recall that in the Commission?s letter of 26 March
1997 to your Geneva Delegation, we indicated that, in postponing by four
weeks our request for WTO consultations, we expected "tangible progress"
within that period on the issue of  the Massachusetts legislation on Burma.
 On this issue it would appear that progress has been made and there are no
indications that Massachusetts is considering amending this law, in spite
of the efforts that you have been making, which I greatly appreciate.

The Community therefore now considers that it has no option but to pursue
this matter formally through the WTO.  I have instructed my officials to
make arrangements to launch a request for consultations in Geneva based on
Article XXII of the Agreement on Government Procurement in conjunction with
Article 4 of the Understanding on Dispute Settlement.

Let me stress that it remains the Community?s objective to reach a mutually
acceptable solution of this problem.  The Community will be prepared to
suspend proceedings in the WTO as soon as the US Administration takes the
appropriate steps to secure amendment of the Massachusetts legislation on
Burma so that it conforms with US international obligations.  We would, of
course,  terminate the proceedings once the legislation is suitably amended.

Thank you for all the efforts you have made.  I recognise that these are
serious.  I urge you to continue them and I trust that this much delayed
decision will not have the adverse effects you fear.

Sir Leon Brittan
---------------------------------------------------------------------------
   Europe to take Massachusetts Burma law to WTO
   by Sarah Jackson-Han

   WASHINGTON, June 20 (AFP) - Setting the stage for another sanctions
battle, the European Union has decided to take its complaint about a US
state sanctions law aimed at Burma to the World Trade Organization (WTO).
   The decision follows a series of testy exchanges and months of effort to
patch up US-European discord over the federal Helms-Burton law, which aims
to stop international investment in Cuba.
   In delaying its WTO appeal on the Burma law in March, EU Trade
Commissioner Sir Leon Brittan said in a June 19 letter to US Trade
Representative Charlene Barshefsky, "We expected tangible progress."
   "On this issue, it would not appear that progress has been made, and
there are no indications that Massachusetts is considering amending this
law, in spite of the efforts you have been making," he wrote.
   Europe "now considers that it has no option but to pursue this matter
formally through the WTO," Brittan wrote.
   At issue is a 1996 Massachusetts law that bars state-owned entities from
buying goods from companies doing business in military-ruled Burma. That has
led to the black-listing of roughly 150 foreign companies.
   Barshefsky said in a statement she was "surprised and very disappointed"
at the European move, given the shared US and European interest in improving
the human rights situation in Burma.
   "The decision to take this matter to the WTO will not help the situation
at all," she said, adding that USTR would continue consulting with
Massachusetts and European officials to resolve the standoff.
   In January, the EU formally complained about the law, while Japan
registered its objections more quietly.
   US-EU disagreement over the matter is a source of annoyance to the EU,
which claims the law violates a WTO provision committing most states to open
all government contracts to international competition.
   It is also a source of embarrassment to the United States, which would
prefer to avoid another clash with its allies so soon after it calmed an
outcry over the Helms-Burton law that tightens the US embargo against Cuba.
   But the matter is getting close attention here because of the precedent
it may set and the bind in which it places the Clinton administration.
   Fighting the measure too hard could make the White House -- fending off
charges of coddling China -- look hostile to human rights. Not fighting it
all would enrage US trading partners and the powerful business lobby.
   And all the while, more states and towns are considering or passing laws
to restrict trade with Burma, while activists in Massachusetts may win
passage of another state law barring contracts with companies operating in
Indonesia.
   Other, similar laws aimed at Nigeria and Tibet have also surfaced around
the country.
   The EU "will be prepared to suspend proceedings in the WTO as soon as the
US administration takes the appropriate steps to secure amendment of the
Massachusetts (law) so that it conforms with US international obligations,"
Brittan wrote.
   "We would, of course, terminate the proceedings once the legislation is
suitably amended."
   In the case of the Massachusetts bill aimed at Indonesia, legislators
have amended the provision to avoid inciting Europe further. On May 29, a
state legislative panel added two exemptions.
   Those cover state purchasing contracts worth more than 500,000 dollars
and construction contracts worth more than seven million dollars to sidestep
possible violations of the WTO Government Procurement Act.

Sarah Jackson-Han
Asian Affairs Correspondent
Agence France-Presse
1015 15th St., NW Suite 500
Washington, DC 20005
202 414 0682 tel/800 786 9380 ext 682
202 414 0635 fax
--------------------------------------------------
The Boston Globe, Saturday, June 21, 1997

The Burma law has created a furor among American allies and prompted the
State Department to try to persuade Massachusetts officials to soften its
provisions.

Group to fight Mass. Burma law
By Frank Phillips, Globe Staff

Impatient with the Clinton administration?s inability to bring
Massachusetts to heel, European governments yesterday moved to formally
challenge the state?s controversial Burma law.

The European Commission officially informed US Trade Representative
Charlene Barshefsky that it is beginning the process that leads to filing a
formal complaint with the World Trade Organization about the law, which
bars the state from contracting with firms that do business in Burma.

The law, which Governor William F. Weld signed in June 1996, has created a
furor among American allies and prompted the State Department to try to
persuade Massachusetts officials to soften its provisions.

But the commission?s action yesterday set off an angry reaction among
sponsors of the law in Massachusetts, the only state with a selective
purchasing law aimed at Burma.  They said they are determined to resist
making any changes in the statute.

Representative Byron Rushing (D-South End) said the commission, by focusing
on the Massachusetts law, is avoiding the much larger issue of repression
of civil liberties by the Burmese military junta.

"The European Commission is raising this to keep discussion on what they?re
not doing," Rushing said.  "They should not beat us up we?re doing what
they also should be doing."

Simon Billenness, a senior analyst at Franklin Research and Development and
coordinator of the Massachusetts Burma Roundtable, which backs the state
law, said the commission?s action is clearly designed to increase pressure
on Massachusetts to buckle.

"The question now is what is the governor going to do, the attorney
general, and most importantly what is the Legislature going to do?  Do they
water down the law or do they stand firm?"  Billenness said.

The Commission action comes despite a unanimous declaration last week by
the 626-member European Parliament urging the commission to retreat from
its challenge of the Massachusetts law.  The commission, whose members are
appointed by European governments, is the executive branch of the European
Union.

In his letter to Barshefsky, the commission vice president, Sir Leon
Brittan said efforts by her office and the State Department to resolve the
problems through negotiations with Massachusetts mave not yielded "tangible
progress."

"There are no indications that Massachusetts is considering amending this
law, in spite of the efforts that you have been making?."  Brittan told
Barshefsky in a letter dated June 19.  "The Community therefore now
considers that it has no option but to puruse this matter formally through
the [World Trade Organization]."

Brittan did say, however, the commission would stop the process if the
Clinton administration persuades Massachusetts officials to amend its
selective purchasing law.
---------------------------------------------------------------------------

Financial Times  Tuesday, June 24, 1997
Brussels worried by law on Burma
by Neil Buckley in Brussels and Agencies

The European Commission said yesterday its complaint to the World Trade
Organisation about a Massachusetts law barring procurement from companies
trading with Burma reflected  concern that several US states were preparing
potentially extra-territorial laws.

Sir Leon Brittan, European Union trade commissioner, wrote last week to Ms
Charlene Barshefsky, US trade representative, before filing the complaint
in Geneva on Friday.

The move signals European disquiet that a number of US states, apparently
taking their cue from federal laws such as the Helms-Burton Act on trade
with Cuba and D?Amato legislation on Iran and Libya, were drawing up laws
affecting foreign and US companies.

The Massachusetts state law bans government procurements from US or
overseas companies with interests in Burma.  The EU says while it is
concerned about Burmese human rights, such laws must not be extended to
non-US groups, and can hinder attempts to bring about democratic reforms.

The Commission issued the complaint under the WTO Government Procurement
Agreement, designed to prevent procurement decisions being based on
political factors.  The complaint is under Article 22, allowing for
preliminary talks before formal consultations, rather than under Article
21, which might lead sooner to a disputes panel.

"We greatly appreciate efforts by the federal administration to amend the
[Massachusetts] law," a Commission spokesman said.  "But we are also
leaving the door open for the administration to make more efforts.  What we
are trying to do is to nip a rather nasty trend in the bud."  Ms Barshefsky
said at the weekend she regretted the EU move.
----------------------------------------------------------------------------
------