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Business challenges Massachusetts'



Business challenges Massachusetts' Myanmar sanctions 
04:15 p.m Sep 23, 1998 Eastern 

By Leslie Gevirtz 

BOSTON, Sept 23 (Reuters) - A group representing some of the largest U.S.
corporations asked a federal judge on Wednesday to strike down a Massachusetts
law that imposes sanctions on firms doing business with Myanmar, formerly
known as Burma. 

The National Foreign Trade Council, representing almost 600 U.S. manufacturers
and financial institutions, argued that the 1996 state law that effectively
bars them from state contracts, was an unfair attempt to regulate foreign
affairs. 

Under the U.S. Constitution, ``foreign policy is exclusively reserved for the
federal government,'' NFTC lawyer Timothy Dyk told U.S. District Judge Joseph
Tauro. ``What the Massachusetts law attempts to do is regulate activities half
a world away in Burma.'' 

The NFTC ``does not support the Burma regime. We recognise there have been
human rights violations,'' Dyk said, arguing that businesses will be the ones
to suffer under the Massachusetts law. 

The Massachusetts law imposes a 10 percent penalty on bids by companies that
do business in Myanmar. 

The nonprofit business group estimated that sanctions against various
countries imposed by both the U.S. federal government and a number of states
and municipalities costs U.S.businesses between $15 billion and $20 billion
annually in exports. 

NFTC President Frank Kittredge told Reuters that translated into 200,000 to
250,000 jobs for American workers. 

But Massachusetts Assistant Attorney General Thomas Barnico argued the law,
modelled on the measures passed by states and cities during the 1980s
boycotting South Africa, was perfectly constitutional. 

Noting those laws were never challenged at the federal level, Barnico believed
they ``had an effect on that country'' and if they were never enacted, South
African President Nelson ``Mandela would still be in jail -- not receiving any
honorary degrees,'' a reference to Mandela's visit last week to nearby Harvard
University. 

He also argued that since the U.S. Congress has had ample opportunity to
decide whether the Massachusetts Legislature and others have exceeded their
reach and has not acted, that the law passes constitutional muster. 

The European Union, which filed a friend of the court brief on behalf of the
NFTC suit, and Japan meanwhile, sought to have a three-judge World Trade
Organisation (WTO) dispute panel to challenge the Massachusetts law. 

The EU and Japan, which are also critical of Myanmar's human rights record,
say the Massachusetts law is part of a pattern by the U.S. states and
Washington to extend their jurisdiction beyond U.S. borders. 

Since the Massachusetts law went into effect a number of companies have
withdrawn from doing business in Myanmar including Hewlett-Packard Co. (HWP.N)
and Eastman Kodak Co.(EK.N). 

Myanmar's gross domestic product was estimated in 1994, the latest year
available, as $41.4 billion or about $5 billion more than the assets in mutual
fund giant Fidelity's Magellan Fund at the time. 

((Boston bureau, (617) 367-4106, fax (617)248-9563,
boston.newsroom+reuters.com)) 

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