PAVEN MALHOTRA, Senior Editor, Harvard International Review
The division of power between the state and federal governments in the United States has been a long-standing matter of contention. From the debates of the Constitutional Convention of 1787 to recent haggling over control of a multitude of trade, human rights, and environmental policies, the flux of power and responsibility between center and state has continually been a backdrop to the national political scene. Most often, the question has evolved solely in the realm of domestic policy. Now, the debate over decentralization has veered toward new ground: foreign policy. Indeed, key policy formulations have moved from the formerly exclusive territory of the State Department to the states themselves. There has been a spectacular rise in the number of city and state sanctions targeted toward foreign nations; over two dozen sub-national governments have enacted policies aimed at Myanmar alone. How do they impinge on Washington's activities? The answer lies in the troubling realization that state actions are not only complicating and confusing Washington's foreign policy, but are also undermining US relations with other nations in the process.
Setting the Stage
While sub-national actors in foreign affairs are not recent phenomena, they have rapidly expanded their roles in recent years. From a near exclusive focus on the apartheid-era government of South Africa in the 1980s, states and cities have shifted their gaze to nations such as China, Indonesia, Cuba, and Nigeria. According to figures provided by the National Foreign Trade Council, more than thirty states and municipalities have already enacted sanctions to punish human rights abuses around the world. The two most widely publicized targets include Myanmar's ruling junta and Switzerland's banks. The former has gained the ire of the international community for its brutal repression of basic freedoms and coercive measures against the Democratic opposition and its leader, Aung San Suu Kyi. The renewed attention to assets Jews lost during the Holocaust--a good part of which, critics claim, are held up in Swiss accounts that the banks refuse to turn over--has swamped Swiss banks with accusations of complicity with the Nazi regime.
As Washington deliberated over policy responses, a handful of states and cities designed their own measures. Massachusetts produced a seminal piece of legislation, the Massachusetts Burma Law, which prohibited the state government from doing business with firms trading with Myanmar. Local governments in Maryland, North Carolina, Wisconsin, and Colorado passed similar measures. New York City, meanwhile, initiated the pursuit of Swiss banks when Comptroller Alan Hevesi spearheaded an effort (with the participation of the states of New York, California, and Pennsylvania) to sanction Swiss banks if they failed to reach a negotiated agreement with Jewish organizations to return lost assets. New York City made its intentions clear when the city disallowed the participation of Swiss banks from a US$1 billion municipal bond sale recently.
The current trend will only intensify in the future. As more sub-national governments craft their own legislation, they not only gain experience in formulating their own foreign policy but also set an example for others. In late December, Los Angeles passed a measure to study the legislation of other cities that restrict city governments from doing business with firms operating in Myanmar. New York State is even considering restrictions on trade with companies that do business with nations suspected of persecuting Christians. These restrictions would likely target nations such as Pakistan, Portugal, and China.
Many of these state and city sanctions--dubbed "selective purchasing laws"--are similar to boycotts insofar as they either severely restrict or outright prohibit local governments from making contracts with firms that operate in or trade with select countries. …