Academic journal article Law and Policy in International Business

State and Local "Free Burma" Laws: The Case for Sub-National Trade Sanctions

Academic journal article Law and Policy in International Business

State and Local "Free Burma" Laws: The Case for Sub-National Trade Sanctions

Article excerpt


Severe political unrest currently grips Burma. A military regime, which calls itself the State Peace and Development Council (SPDC), but was known previously as the Law and Order Restoration Council (SLORG),(1) controls the nation through political suppression and barbaric violence. Among the many human rights abuses committed by the SPDC, forced relocation and conscription of villagers is common.(2) A U.S. lawyer described seeing a Burmese soldier kicking a two month old infant into a cooking fire during the forcible eviction of a village as just one of the many atrocities occurring on a regular basis under the SPDG.(3) Troubles first surfaced in 1989, when the SPDC placed the leader of the opposition National League for Democracy (NLD) movement, 1991 Nobel Laureate Aung San Suu Kyi, under house arrest.(4) A year later, the SPDC refused to surrender power when the NLD won the national election.(5) Human rights observers continually criticize the SPDC for torturing and summarily executing political dissidents, prohibiting widely supported political organizations, and engaging in slave labor, prostitution, and a booming heroin and opium drug trade.(6)

In response to these abuses, one U.S. state, one county, and eighteen cities have, within the past year, officially boycotted trade with the SPDC and companies that do business with Burma.(7) These selective-purchasing laws generally prohibit the use of public funds for contracting with any branch of the military-led SPDC or with any company doing business in Burma.(8) Many opponents of selective-purchasing laws have debated the validity of these state and local enactments,(9) protesting that states and localities are trying to set their own balkanized foreign policy. This sub-national foreign policy-setting, opponents argue, is not only at odds with the World Trade Organization (WTO) agreement on non-discriminatory procurement, but also severely limits business investments abroad.(10) More significantly, critics allege that these enactments, which in effect act as trade sanctions, violate the U.S. Constitution on several grounds, including the Commerce Clause, the Supremacy Clause, and federal preemption.(11)

This Note separately addresses each argument proposed by sanction opponents. Part II asserts that the federal preemption argument posed by sanction opponents fails because of the uncertainty of the binding force of the WTO's Agreement on Government Procurement (AGP) and recent federalism jurisprudence protective of state sovereignty. Part III presents the argument based on the Supremacy Clause and the federal government's foreign affairs power. Although there is powerful polemic precedent for this argument, critics fail to acknowledge its inapplicability to the present Burma laws and to the present international political context. Part IV examines the argument that the Commerce Clause prohibits states from using their police power to interfere in foreign commerce. This argument, however, fails to address the impact of the Market Participant Doctrine. As an exception to the Commerce Clause, this doctrine allows states to exercise their spending power, even when that exercise burdens commerce.

This Note concludes that states and localities are constitutionally entitled to enact selective-purchasing laws based on such fundamental rights as federalism, freedom of speech, and spending power. While there are limits to these rights, the legal community has yet to address adequately the constitutional breadth of a state's power in the area of foreign policy.(12) As Parts II-IV argue, a state should be free to decide where, how, and with whom it will spend its money--regardless of whether that decision has an international impact.


An initial attack levied by critics of state and local Burma sanctions was that these laws are federally preempted and are therefore unconstitutional. …

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