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JOC: US may defend, oppose state's



Subject: JOC: US may defend, oppose state's sanctions law

US may defend, oppose state's sanctions law
Officials: Position is legally possible

BY MICHAEL S. LELYVELD
JOURNAL OF COMMERCE
February 3, 1999

In an unprecedented move, the Clinton administration is considering a plan
to oppose an economic sanction in federal court while defending it before
the World Trade Organization.

Officials say the decision to take opposite sides in the case of
Massachusetts sanctions against Myanmar, formerly named Burma, would
present no legal problems. But they concede that the strategy may be
politically ambiguous, at best.

Myanmar rulers targeted

The problem stems from Massachusetts' 1996 selective purchasing law, which
targets Myanmar's military rulers by barring public contracts with
companies that do business with the country. Four states have similar
Myanmar laws pending, while 24 U.S. cities have already enacted boycotts.

The complication for the administration arises because the Massachusetts
law has come under attack on two sides.

Last year, the European Union and Japan brought complaints against the
state law before the WTO, charging that it violates a 1994 Government
Procurement Agreement on open bidding. The Clinton administration pledged
to defend Massachusetts before the international trade body.

But last April, the National Foreign Trade Council also brought suit in
federal District Court in Boston on behalf of corporations, charging that
the law is an unconstitutional infringement on federal powers to conduct
foreign policy. The court agreed in November and struck down the law, but
Massachusetts filed an appeal.

Now, the administration is considering whether to file a
friend-of-the-court brief in support of its own federal powers. On Monday,
a State Department official confirmed a Washington Post report that the
administration may ask that the judgement against the state law be upheld.

State Department solicited

The Justice Department has sought State's opinion, and officials appear to
be leaning toward the argument that there are already enough problems with
the spread of U.S. unilateral sanctions without states and cities getting
into the act.

But at the same time, the administration has no intention of abandoning its
position in the WTO.

"Every time a case comes up before the WTO, we defend it," said one official.

The seemingly contradictory stands are possible because the WTO doesn't
deal with constitutional questions, while the appeals court is not ruling

on the Government Procurement Agreement with the EU. But human rights
advocates are mightily displeased.

"It is definitely inconsistent," said Massachusetts Rep. Byron Rushing, a
Boston Democrat, who wrote the Myanmar law. "This is just about tactics.
People want the U.S. government to take a more active role in defending
human rights."

Limit to inconsistency

With all the legal wrangling, the focus on Myanmar's brutal dictatorship
has been all but lost. Activists say there is a limit to inconsistency on
the issue, because the administration has imposed its own unilateral
sanctions on new investment in Myanmar.

"They can't come up with an argument on unilateral sanctions because that
is their own position on Burma," Mr. Rushing said.

The case is on the verge of becoming a battle of the briefs, with states,
foreign countries, the federal government and perhaps Congress converging
on the appeals court.

Eight states, including New York and California, are set to file
friend-of-the-court briefs in support of Massachusetts before a Friday
deadline. There are reports that members of Congress will join them.

Last year, the EU took the unusual step of filing a brief in support of the
National Foreign Trade Council's case in the District Court. The NFTC side
has another month to file with the appeals court, giving the Clinton
administration time to make up its mind.

Both sides confused

Both sides say they are confused by the administration's decision to
consider coming in on the case now, after it stayed out of the District
Court process.

One explanation is that it is common for Justice to take notice only after
cases rise to a higher level. Another is that a debate within the State
Department between human rights advocates and anti-sanctions forces stalled
an earlier move.

Yet a third explanation is that United States, EU and Japanese diplomats
are now pursuing a common approach toward Myanmar through the United
Nations and the World Bank, offering the possibility of multilateral loans
if democratization takes place.

Ironically, a federal decision to oppose the Massachusetts law in court
could help the U.S. case in the WTO. Trade officials could argue that the
EU and Japan have no case because the law has been overturned by the
District Court, and besides, it's unconstitutional.

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