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Burma: Row flares over Massachusett



Subject: Burma: Row flares over Massachusetts law

Financial Times 14/6

                   Burma: Row flares over Massachusetts law

                   SATURDAY JUNE 14 1997

                   By Nancy Dunne in Washington

                   Ms Charlene Barshefsky, US trade representative, is
urging the EU to
                   delay a complaint to the World Trade Organisation against a
                   Massachusetts law which prohibits state agencies
purchasing goods and
                   services from companies doing business in Burma.

                   "Initiating WTO dispute settlement proceedings at this
time. . . would
                   frustrate our efforts in Massachusetts to reach a
satisfactory conclusion,"
                   Ms Barshefsky said in a letter to Sir Leon Brittan, EU
trade commissioner.

                   Ms Barshefsky hopes to avert another damaging trade
squabble with the
                   EU. But US human rights activists are preparing to step
up the dispute if
                   the EU starts proceedings at the WTO.

                   "They are using the WTO as a shield behind which to
attack the
                   Massachusetts Burma law," said Mr Simon Billenness of the
Franklin
                   Research and Development Corporation, a public interest
investment firm.

                   "But this is an issue that has resonance around the
world. They don't realise
                   what a political time-bomb this is."

                   US activists were working with European groups and unions
on "careful
                   surgical strikes" against companies which did business
with Burma, he
                   added.

                   Possible targets were the Dutch banks ABN Amro and ING
and the East
                   Asiatic Company, the Danish trading company. Efforts were
also under
                   way to get anti-Burma sanctions passed in European cities.

                   Massachusetts is the only state to have passed a
"selective purchasing law"
                   against companies operating in Burma, but 10 US cities
have passed
                   similar bills. Massachusetts has listed about 150 foreign
companies which it
                   says do business in Burma, including Honda, Nestlé,
Siemens and
                   Unilever.

                   Mayor Rudolph Giuliani of New York signed a Burma
sanctions measure
                   last month, ignoring complaints from business that the
measure would hurt
                   the city's economy.

                   New York has the fourth largest government budget in the
US, after the
                   federal government and the states of California and New
York. City
                   measures cannot be challenged in the WTO because they are not
                   signatories to the gov-ernment's procurement code.

                   US trade officials have begun to work closely with states
considering such
                   laws, to make them consistent with WTO rules.

                   Massachusetts legislators, now working on sanctions
legislation against
                   Indonesia, were persuaded by Ms Barshefsky's office to
produce a bill
                   containing an exception for procurement covered by the
WTO code, Ms
                   Barshefsky said.

                   They have been asked to amend the current Burma bill to
include such an
                   exclusion, but have yet to agree.

                   Ms Barshefsky said she was "disturbed" about reports that
an EU member
                   state has been encouraging adoption of its own sanctions
aimed at
                   Indonesia, at a time when the European Commission is
threatening a case
                   against Massachu-setts.

                   A US trade official said she was referring to Portugal.