WTO/Burma: US trade group to attack

[sbillenness@xxxxxxxx]

US trade group to attack sanctions laws in court 
by Sarah Jackson-Han <sarah.jackson@xxxxxxx>
Agence-France Presse (AFP)

WASHINGTON, March 6 (AFP) - A major US trade group plans to challenge the
legality of state and local laws that penalize firms with ties to Nigeria
and Myanmar, escalating the controversy over unilateral sanctions.

USA Engage, an ad hoc coalition of some 660 businesses, farm groups, and
trade associations, indicated Thursday it would argue that such laws hinder
federal management of foreign relations and trade in violation of the US
Constitution.

The legal outcome could play a decisive role in shaping future sanctions
laws, which angry US allies regard as heavy-handed American meddling.

"Unilateral state and local sanctions are proliferating at an alarming
rate," USA Engage said in a statement to AFP.

"The purpose of a constitutional challenge is to check the threat that
local sanctions pose to the formulation of a single, coherent national
policy," it said, arguing that unilateral sanctions have also proven
ineffective. Eric Thomas, a spokesman for USA Engage, said the organization
had taken no final decision where or when it would file its lawsuit.

But in a memo leaked last month to a Virginia-based newsletter, Inside US
Trade, National Foreign Trade Council president Frank Kittredge said the
coalition would file two suits in separate jurisdictions by late May. It
also said the initial court challenge would occur in Massachusetts, the
first US state to impose limited economic sanctions against companies doing
business in Myanmar, formerly Burma.

The second would come one to two months later, in a jurisdiction yet to be
decided, the memo said, estimating the cost of the lawsuits at up to
800,000 dollars.

Thomas Barnico, assistant attorney-general for the state of Massachusetts,
said his office had had no contact yet with USA Engage about its planned
lawsuit but would defend the sanctions law.

"Our position would be that the statute is constitutional ... we don't
think it interferes with the conduct of foreign policy by the (federal)
government," he said in a telephone interview.

Similar concerns were raised in the 1980s regarding state and local
sanctions laws targeting apartheid-era South Africa, he said, but those
arguments were never considered by the Supreme Court.

The Washington-based Investor Responsibility Research Center reports 20
sanctions laws aimed at Myanmar, passed in one state, one county, and 18
cities. It also cites 15 aimed at Northern Ireland, four at Nigeria, and
one at Tibet.

Fueled by fast-growing e-mail technology, civic pressure to oppose
Myanmar's human rights abuses led to passage of the Massachusetts law in
1996. President Bill Clinton banned new US investment there in 1997.
Nigeria has also drawn fire from the American public and US officials for
its human rights abuses, notably since the November 1995 execution of
dissident writer Ken Saro-Wiwa.

The Massachusetts law puts companies that invest in or do business with
Myanmar at a competitive disadvantage. After its passage, several large
corporations severed their ties with the Southeast Asian country.

But the law has drawn sharp criticism from Europe and Japan, which want the
World Trade Organization (WTO) to decide whether it violates a WTO
provision on the granting of government contracts.

The prospect of a lawsuit by USA Engage makes a compromise with Europe and
Japan on the WTO issue unlikely, according to the Massachusetts state
legislator who sponsored the sanctions law.

USA Engage "would interpret any amendments on our part as an admission"
that the state overstepped its authority in passing the provision, Boston
Democrat Byron Rushing said in an interview. sjh/pfm