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EU Concerens U.S. Passes Baurma's L

By Bettina Vestring 

BRUSSELS, Nov 4 (Reuters) - Europeans are looking across the Atlantic with
concern as a growing number of U.S. states and even cities pass sanction laws
to punish repressive governments and the companies that deal with them. 

The European Union, already up in arms over U.S. federal trade laws
concerning Cuba, Iran and Libya, is alarmed at the new drive to enforce human
rights through selective purchasing bills at a regional or local level. 

``Our concern is the absolute proliferation that has occurred,'' one EU
source told Reuters. 

Though most sanctions laws to date have not hurt European companies very
badly, there are dangerous proposals in hand, the source explained. ``States
like California, New York and Texas are big purchasers.'' 

U.S. states and cities are pondering laws against countries as far apart as
Nigeria and Indonesia. New York City holds the record with sanction proposals
affecting a total of 15 countries, from Egypt to North Korea. 


The recent debate over Nazi gold and Jewish bank accounts in Switzerland put
that country on the lawmakers' black list in several U.S. states. 

The state legislature of New York prepared a law that would ban the state
from purchasing goods or services from any company doing business in

Pending an agreement between the Swiss banks and Jewish organisations, this
measure was put on hold for the year. But it went far enough to set off alarm
bells in Washington. 

``The actions against Swiss banks are counter-productive,'' Under Secretary
of State for Trade Stuart Eizenstat said in recent testimony before a
congressional committee. 

The Clinton administration already has its hands full with EU challenges
against the Helms-Burton act and D'Amato act of 1996, both of which seek to
extend U.S. penalties worldwide against any firms doing major business with
Cuba, Iran or Libya. 

``Ad hoc and scattered actions at various levels of government, however
well-intentioned, can do more harm than good in achieving the desired
objective,'' he added. 


One favorite target of sanction laws is Burma, where opposition leader and
Nobel Peace laureate Aung San Suu Kyi is staging a highly publicised fight
against a military government which has been accused of violating human
rights and organising the drug trade. 

The state of Massachussetts and 15 individual U.S. cities and counties have
passed legislation to bar the authorities from buying goods or services from
companies which do business in Burma. In another four states, similar laws
are pending. 

The EU commission has asked the World Trade Organisation (WTO) for
consultations over the Massachussetts law. This is the first step in the WTO
dispute settlement procedure. 

``We are using Massachussetts as a test case,'' the EU source explained. 

The EU has been able to start the procedure against the Massachussetts law
because that state had signed up to a WTO agreement on public procurement.
But not all U.S. states have done so and EU officials are worried by the fact
that there are no rules at all for cities and counties. 

``The laws don't fall under the normal WTO rules,'' the EU source said.
``This is very much a consumer boycott along the lines of: I am buying and
therefore I can chose who I will buy from.'' 


The selective purchasing proposals are modelled on the sanction laws which
helped bring down South Africa's former whites-only apartheid regime. 

The fight against Burma was led by the Californian city of Berkeley, which
passed the first such law in early 1995. 

``The citizens of the City of Berkeley, believing that their quality of life
is diminished when peace and justice are not fully present in the world,
adopted Ordinance No. 59085-N.S.,'' the decision said. 

But even in the U.S., the legality of such measures is being questioned. In
an essay for the Vanderbilt law journal, David Schmahmann and James Finch
recently pointed out that they may constitute an impermissible usurpation of
federal authority. 

Bryan Cassidy, a British Conservative member of the European Parliament, put
it more plainly. ``These measures are silly and absurd and likely to harm
American interests more than anybody else. The federal government is alarmed
and embarrassed.'' 

06:26 11-04-97