Restrictions on Trade with Burma: Bold Moves or Foolish Acts?

  Introduction

Since 1994, four bills restricting state trade with other countries have been introduced into the Massachusetts legislature.⁽¹⁾ The Commonwealth of Massachusetts has chosen to express its disapproval of the political situations in certain countries by imposing economic restrictions on firms that "do business" with these countries.⁽²⁾ One such restriction, Massachusetts General Laws, chapter 7, sections 22G-M (Burma statute), restricts Massachusetts state agencies' ability to purchase from companies doing business in or with Burma.⁽³⁾ The stated purpose of the Burma statute is to lead "other states and the Congress . . . and make a stand for the cause of freedom and democracy around the world."⁽⁴⁾

There are a number of grounds upon which these restrictive government procurement statutes can be challenged, and the Burma statute is no different.⁽⁵⁾ The Burma statute may be subject to constitutional challenges on the following grounds: (1) that it is preempted by section 570 of the Omnibus Appropriations Act of September 30, 1996 (The Act), which expresses United States policy towards Burma;⁽⁶⁾ (2) that this legislation is an impermissible burden on foreign commerce;⁽⁷⁾ and (3) that this type of legislation constitutes an impermissible intrusion into the field of foreign affairs, which is solely the concern of the federal government.⁽⁸⁾ Additionally, the Burma statute may also be prone to challenges under the World Trade Organization Government Procurement Agreement (WTO-GPA).⁽⁹⁾

This Note argues that Massachusetts is not only taking a risk, but is overstepping its authority, when it imposes economic restrictions of the sort imposed by the Burma statute.⁽¹⁰⁾ Further, this Note argues that this law is open not only to constitutional challenges, but to international law challenges as well.⁽¹¹⁾ Part II addresses the current situation in Burma and why Massachusetts is calling for sanctions.⁽¹²⁾ Part II also addresses earlier legislation dealing with South Africa as a foundation for the restrictions on Burma.⁽¹³⁾

Part III.A of the Note analyzes the potential challenge to the Burma statute under the theory of federal preemption.⁽¹⁴⁾ Part III.B explores the validity of the Burma statute under the dormant commerce clause, focusing in particular on the market participant theory.⁽¹⁵⁾ Part III.C analyzes whether the Burma statute would survive a challenge under the Supremacy Clause.⁽¹⁶⁾ Finally, Part III.D addresses potential challenges under international law, focusing in particular on the United States' obligations under the WTO-GPA.⁽¹⁷⁾

This Note concludes that the Burma statute is preempted by The Act.⁽¹⁸⁾ This Note also concludes that the market participant theory under the dormant commerce clause is not applicable to foreign commerce and is, therefore, not decisive on the issue of the legitimacy of the Burma statute.⁽¹⁹⁾ This Note further concludes that the Burma statute impermissibly interferes with foreign relations under the Supremacy Clause, and, therefore, the Burma statutes is fatally flawed and should be struck down.⁽²⁰⁾ This Note further asserts that the statute conflicts with the WTO-GPA and is therefore preempted.⁽²¹⁾

  Background

A.  Conditions in Burma and Why Massachusetts Has an Interest

Burma, also known as Myanmar,⁽²²⁾ is a market economy with 42.33 million inhabitants.⁽²³⁾ It is located in Southeastern Asia, bordering the Bay of Bengal, between Bangladesh and Thailand, and is slightly smaller then Texas.⁽²⁴⁾ On January 4, 1948, Burma became a fully independent sovereign state.⁽²⁵⁾ Since then, the United States and Burma have signed agreements and treaties on such issues as economics and trade, to education and mutual recognition.⁽²⁶⁾

In 1993, U.S. exports to Burma amounted to $12.4 million, and imports from Burma amounted to $46.3 million.⁽²⁷⁾ Agriculture dominates the Burmese economy, contributing to fifty-one percent of its Gross Domestic Product and employing eighty percent of the work force.⁽²⁸⁾

The Commonwealth of Massachusetts is interested in Burma because of these trade figures, but it is also concerned with Burma's record on human rights.⁽²⁹⁾ The Burmese military regime currently in control of Burma, the State Law and Order Restoration Council (SLORC), engages in political repression and human rights violations.⁽³⁰⁾ In 1989, the SLORC arrested Aung San Suu Kyi, one of the main dissenters against the military regime.⁽³¹⁾ Aung San Suu Kyi received the Nobel Peace Prize for her efforts to establish democracy in Burma.⁽³²⁾ Despite her arrest, the National League for Democracy (the party which Aung San Suu Kyi represents) won the 1990 election.⁽³³⁾ However, the "military did not recognize the election results . . . and many members of parliament were arrested or driven into exile."⁽³⁴⁾

On July 10, 1995, the SLORC released Aung San Suu Kyi.⁽³⁵⁾ Since then, however, the regime has continued to suppress any and all democracy demonstrations.⁽³⁶⁾ Recently, the SLORC arrested 159 people to prevent the National League for Democracy (NLD) from assembling its congress, and an additional 400 people were rounded up "to preserve the peace and tranquillity of the state."⁽³⁷⁾ Such human rights violations fuel calls for sanctions, and people look for guidance from similar situations in the past.⁽³⁸⁾

In this case many have looked back to the 1980s, when South Africa became the focus of attention because of its human rights violations.⁽³⁹⁾ The similarities in public perception of the South African human rights violations, and those seen in Burma today are precisely the reason that a closer look must be taken into the debate that surrounded the South African divestiture movement.⁽⁴⁰⁾

B.  South Africa as a Backdrop

The Burma statute is best understood by looking at the divestiture statutes of the 1980s, which focused on South Africa.⁽⁴¹⁾ Since there have been no court challenges under the new Burma legislation,⁽⁴²⁾ it is important to review the history of the South Africa legislation.⁽⁴³⁾ The South Africa legislation arose in response to the racist policies of the government of South Africa.⁽⁴⁴⁾

Many states and municipalities passed anti-apartheid legislation or divestiture statutes that required governmental bodies to divest their pension funds from companies that did business in South Africa.⁽⁴⁵⁾ Many of the federal and state statutes on the books today that purport to impose sanctions on one country or another imitate the divestiture statute of the anti-apartheid movement.⁽⁴⁶⁾ The divestiture statutes, in general, required that public pension funds not be invested in banks or financial institutions that had outstanding loans to South Africa.⁽⁴⁷⁾ Although these divestiture statutes came in many different forms, they generally did not reach the level of restriction found in this new genre of restrictive legislation like the Burma statute, and it is this further restriction that makes it so controversial.⁽⁴⁸⁾

C.  Massachusetts Divestiture Statutes

The 1980s brought about changes in the way states and even counties viewed their ability to affect global politics.⁽⁴⁹⁾ University students and members of academic communities began to push for government actions against South Africa and its apartheid policy.⁽⁵⁰⁾ This fervor soon reached the municipalities and states.⁽⁵¹⁾ Massachusetts was one of the first to enact divestiture statutes, along with Connecticut, Maryland, Michigan, and Nebraska.⁽⁵²⁾

The Massachusetts divestiture statute required that public pension funds not be invested in bonds or financial institutions that have outstanding loans to South Africa and that no such assets should remain invested in stocks or securities of any company doing business in South Africa.⁽⁵³⁾ This statute was based on a belief that divesting would send a message to South Africa.⁽⁵⁴⁾ This withdrawal of public pension funds from South Africa would, in essence, be a means of cutting-off some of their money supply.⁽⁵⁵⁾ However, the statute did not purport to restrict contracts between government agencies and companies that did business in or with South Africa.⁽⁵⁶⁾ The Burma statute, on the other hand, does restrict contracts between government agencies and companies that do business in or with Burma.⁽⁵⁷⁾ It is this expansion of the formula contained in the divestiture statutes that makes these more restrictive statutes so controversial and open to challenges.⁽⁵⁸⁾

D.  Challenges to the South African Statutes

There has been a great deal of theorizing about the constraints on state and local actions in the international realm, but there is very little case law in this field.⁽⁵⁹⁾ It has been argued that the case law is undeveloped because no one wants to be identified as the supporter of brutal regimes.⁽⁶⁰⁾ Another argument for why there is very little applicable case law is because "state governments are, absent consent, immune to suit by foreign governments."⁽⁶¹⁾

Unfortunately, the South African statute was never challenged either. Shortly after Massachusetts passed this legislation, President Reagan signed Executive Order 12,532.⁽⁶²⁾ This order, signed on September 9, 1985 under the power granted him by the International Emergency Economic Powers Act (IEEPA),⁽⁶³⁾ prohibited all new loans and the sale of computer goods to certain agencies of the South African government.⁽⁶⁴⁾ Shortly thereafter, Congress passed the Anti-Apartheid Act of 1986 and the debate was closed.⁽⁶⁵⁾

Currently, there is a push for Congress to impose economic sanctions on Burma due to the same human rights violations that inspired Massachusetts to impose its own restrictions.⁽⁶⁶⁾ The question to be addressed is whether these state restrictions are enforceable with no implementing legislation in place, no ability for individuals to challenge violations on an independent basis, and the possibility of conflict with federal legislation.⁽⁶⁷⁾

E.  The Burma Statute

The Burma statute restricts government agencies from contracting with businesses that do business with or in Burma.⁽⁶⁸⁾ The statute is all-encompassing in defining what "doing business with or in Burma" entails--from having your major place of business in Burma to having a licensing agreement or franchise agreement with an entity in Burma.⁽⁶⁹⁾ This statute has not yet been tested by the court, and it is not clear if an individual even has standing to bring suit. These questions should be answered by the statute. However, the statute only states that it is up to the Secretary of Administration and Finance to "promulgate regulations to assure the timely and effective implementation [of this statute]."⁽⁷⁰⁾

  Analysis

A.  The Preemption Challenge

Federal law may preempt state law in three ways.⁽⁷¹⁾ First, Congress can completely, yet not explicitly, occupy an entire field of regulation, leaving no room for the states to supplement federal law.⁽⁷²⁾ Second, Congress can explicitly occupy a regulatory field.⁽⁷³⁾ Lastly, federal law can preempt state law when simultaneous compliance with both state and federal law is impossible, or stands in the way of the execution of "the full purposes and objectives of Congress."⁽⁷⁴⁾ Where Congress is said to have preempted a state law, the Congressional intent must be "clear and manifest."⁽⁷⁵⁾ Without clear language to the contrary, it is presumed that Congress does not intend to override existing state laws.⁽⁷⁶⁾

In Pennsylvania v. Nelson,⁽⁷⁷⁾ the United States Supreme Court enunciated these three tests for preemption, bound them together, and held that the particular statute being challenged had to pass all of these tests to avoid being preempted by federal actions in the same field.⁽⁷⁸⁾ The Court used this new three-pronged test to determine whether Congress had preempted the field of sedition, and held the Pennsylvania state law void.⁽⁷⁹⁾

In Nelson, the Court dealt with the Pennsylvania Sedition Act,⁽⁸⁰⁾ which punished "utterances or conduct `(intended to) incite or encourage any person to commit any overt act with a view to bringing the Government of this State or of the United States into hatred or contempt'"<sup>(81)</sup> According to the Nelson Court, the first prong of the three-prong test, whether "`[t]he scheme of federal regulations [is] so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it,'" had been met in the form of the Smith Act.⁽⁸²⁾ The Court determined that Congress had re-entered the field of anti-subversive legislation, when it enacted the Smith Act,⁽⁸³⁾ and that that Smith Act, taken together with other lesser Acts,⁽⁸⁴⁾ led to the "inescapable [conclusion] that Congress ha[d] intended to occupy the field of sedition."⁽⁸⁵⁾

The Nelson Court further determined that the second prong, whether "the federal statutes `touch a field in which the federal interest is so dominant that the federal system [must] be assumed to preclude enforcement of state laws on the same subject,'"⁽⁸⁶⁾ also had been overcome. The Court stated that "Congress ha[d] devised an all-embracing program for resistance" of subversive activities by appropriating large sums of money, and charging two federal agencies⁽⁸⁷⁾ with the duty of identifying subversive acts.⁽⁸⁸⁾ The Court stated that "Congress having thus treated seditious conduct as a matter of vital national concern, it is in no sense a local enforcement problem."⁽⁸⁹⁾

Finally, the Nelson Court determined that the third prong of the test, whether "enforcement of the state sedition act[] presents a serious danger of conflict with the administration of the federal program,"⁽⁹⁰⁾ had also been met.⁽⁹¹⁾ According to the Nelson Court, the fact that the President of the United States had given several speeches stressing the importance of this issue was evidence that enforcement by state entities would pose a danger to the administration of the federal program.⁽⁹²⁾ The Court agreed with the lower court that it was "important that punitive sanctions for sedition against the United States be such as have been promulgated by the central governmental authority and administered under the supervision and review of that authority's judiciary."⁽⁹³⁾ Of particular interest to the Court, in its holding that administration of state Acts would conflict with the operation of the federal plan, was an address given by the Director of the Federal Bureau of Investigation to the Federal-State Conference on Law Enforcement Problems of National Defense.⁽⁹⁴⁾

In the Address, the Director stated, "It is unfortunate that in a few States efforts have been made by individuals not fully acquainted with the far-flung ramifications of this problem to interject superstructures of agencies between local law enforcement and the FBI."⁽⁹⁵⁾ The Court determined that this Address embodied the idea that exercise of concurrent jurisdiction in the field of sedition would result in federal enforcement encountering difficulties and conflicts.⁽⁹⁶⁾ The Nelson Court stated that:

Since we find that Congress has occupied the field to the exclusion of parallel state legislation, that the dominant interest of the Federal Government precludes state intervention, and that administration of state Acts would conflict with the operation of the federal plan, we are convinced that the decision of the Supreme Court of Pennsylvania is unassailable.⁽⁹⁷⁾

In so holding, the Court affirmed the Supreme Court of Pennsylvania's decision that the Pennsylvania statute was preempted by the Smith Act.⁽⁹⁸⁾ This is important because many parallels can be drawn between the events surrounding the Smith Act as it relates to the Pennsylvania Sedition Act, and the events surrounding section 570 of the Omnibus Appropriations Act, as it relates to the Burma statute.⁽⁹⁹⁾

In the case of the Burma statute, there is existing federal legislation regarding United States' relations with Burma (The Act).⁽¹⁰⁰⁾ However, where Congress has not stated specifically whether a federal statute has occupied a field, the issue is to what extent does the state statute control the field, in regards to trade sanctions and Burma.⁽¹⁰¹⁾ The Act imposes certain sanctions on Burma including: prohibiting United States assistance to the Government of Burma; requiring all United States executive directors of international financial institutions to vote against any loan or other utilization of funds of the banks to or for Burma; and denying all visas to Burmese government officials, except as required by treaty obligations or to staff the Burmese mission to the United States.⁽¹⁰²⁾

The Act not only imposes certain sanctions immediately upon enactment, it also provides for "conditional sanctions" upon a finding by the President.⁽¹⁰³⁾ The Act provides that:

The President is hereby authorized to prohibit, and shall prohibit United States persons from new investment in Burma, if the President determines and certifies to Congress that, after the date of enactment of this Act, the Government of Burma has physically harmed, rearrested for political acts, or exiled Daw Aung San Suu Kyi or has committed large-scale repression of or violence against the Democratic opposition.⁽¹⁰⁴⁾

In addition to these sanctions, and provisional sanctions, there are a number of federal actions that help to satisfy the first prong of the Nelson Court's test for preemption.⁽¹⁰⁵⁾

Since 1988, the federal government has taken a number of steps to sanction Burma. These steps include suspending United States economic aid programs and urging other potential donors to limit any development assistance to Burma;⁽¹⁰⁶⁾ decertifing Burma as a narcotics cooperating country;⁽¹⁰⁷⁾ maintaining a policy of not providing loans or insurance for U.S. companies selling to or investing in Burma;⁽¹⁰⁸⁾ and supporting initiatives strongly encouraging efforts of the United Nations (U.N.) General Assembly and the International Labor Organization condemning human and worker rights violations in Burma.⁽¹⁰⁹⁾ These sanctions taken together with the federal actions are very important in regards to the first prong of the Nelson Court's three-prong test, because they "evince a congressional plan which makes it reasonable to determine that no room has been left for [Massachusetts] to supplement it."⁽¹¹⁰⁾

Having met the first prong of the Nelson Court's test for preemption of a state statute by a federal statute, the second prong of the test, "dominance" of the federal system, is the next hurdle.⁽¹¹¹⁾ The Nelson Court reasoned that the dominance of the federal interest was demonstrated by the appropriation of large amounts of money, the designation of a program to fight totalitarian aggression, and the fight to strengthen freedom throughout the world.⁽¹¹²⁾

In the case of Burma, the federal government has two major interests at stake: (1) maintaining control of sanctions in actions taking place with regards to Burma, and (2) providing a united front.⁽¹¹³⁾ The Act makes it clear that the federal government has an interest in regulation of trade with Burma,⁽¹¹⁴⁾ and appropriates "not less than $2,500,000 [to] be made available to support activities in Burma, along the Burma-Thailand border, and for activities of Burmese student groups and other organizations located outside Burma, for the purposes of fostering democracy in Burma."⁽¹¹⁵⁾

On November 19, 1996, President Clinton, in his speech before the joint session of the Australian Parliament, spoke of the importance that the Asian-Pacific rim had for the United States, and he spoke of attempts to continue talks with the military regime in Burma.⁽¹¹⁶⁾ As such, the President has clearly stated an interest by the federal government to remain engaged in conversation.⁽¹¹⁷⁾ In a press conference following the speech, President Clinton stated:

We [the U.S. and Australia] also share a commitment to advance democratic values. We have worked on it side by side throughout the wars of the Twentieth Century, throughout the Cold War, and now in this new era. We join together in supporting human rights in Burma, promoting the rule of law in Cambodia, and helping to keep the peace in troubled corners or the world.⁽¹¹⁸⁾

This followed President Clinton's signing of the Act on September 26, 1996,⁽¹¹⁹⁾ and is important because it shows that the United States has a strong interest in sanctions on Burma.⁽¹²⁰⁾ Looking at the acts of Congress in the aggregate, a conclusion can be drawn that Congress has intended to occupy this field. Having taken the issue of sanctions on Burma to be a matter of national concern, Congress makes it clear that it is no longer a local concern.

As the Supreme Court in Nelson stated, "When Congress has taken the particular subject matter in hand, coincidence is as ineffective as opposition, and a state law is not to be declared a help because it attempts to go farther than congress has seen fit to go."⁽¹²¹⁾ It thus appears that the Burma statute "touches a field in which the federal interest is so dominant that the federal system (must) be assumed to preclude enforcement of state law on the same subject."⁽¹²²⁾

Until Congress no longer expresses an interest, state governments are preempted from enacting their own legislation regarding restriction on trade with Burma.⁽¹²³⁾ While the Massachusetts state legislature may be trying to take a tough stand against violations of human rights, they are prevented from doing so even if it restricts no further than Congress deems necessary.⁽¹²⁴⁾ The Act makes clear that sanctions and restrictive legislation on Burma is of such "vital national concern" that it cannot be left to the states to enforce.⁽¹²⁵⁾

Having met the first two prongs of the Nelson Court's three prong test, the third prong, which deals with the possibility of conflict by the state statute with the administration of the federal program, is the final hurdle in this analysis.⁽¹²⁶⁾ The Act requires the President to report every six months to the Chairmen of the Committee on Foreign Relation, the Committee on International Relations and the House and Senate appropriations Committees.⁽¹²⁷⁾

In requiring the President to report to these committees, the federal government has placed the investigation of human rights violations, and the possibility of sanctions, in the hands of the President, not of the individual states. The Act provides that:

[T]he President shall report . . . on the following:

(1) progress toward democratization in Burma;

(2) progress on improving the quality of life of the Burmese people, including progress on market reforms, living standards, labor standards, use of forced labor in the tourism industry, and environmental quality; and

(3) progress made in developing [a multilateral] strategy.⁽¹²⁸⁾

Having placed the power of regulating trade with Burma in the hands of the President, Congress has, as a result, taken the power out of the hands of the state governments. If Massachusetts is permitted to exercise concurrent jurisdiction in this area, federal enforcement will encounter "incompatible or conflicting adjudications."⁽¹²⁹⁾

Having determined that "Congress has occupied the field to the exclusion of parallel state legislation, that the dominant interest of the Federal Government precludes state intervention, and that administration of state Acts would conflict with the operation of the federal plan,"⁽¹³⁰⁾ it can be argued with a great deal of certainty that the Burma statute is preempted. The debate however, does not end there, because the United State Supreme Court has determined that statutes dealing with government procurement are also reviewable under the Commerce Clause.⁽¹³¹⁾

B.  Commerce Clause Challenge

Article 1, § 8, cl. 3 of the United States Constitution provides that "[t]he Congress shall have Power . . . To regulate Commerce with foreign Nations, and among the several States."⁽¹³²⁾ This affirmative grant of power is not exclusive, in that states may act in this field. The problem arises when Congress is silent as to a particular area. It is well established through judicial interpretation that this negative grant of authority may sometimes prohibit state regulatory activity, even absent preemptive federal legislation.⁽¹³³⁾ The "dormant commerce clause" as it is often called, prohibits many state regulations designed to promote local enterprise at the expense of that from other states or from foreign countries.⁽¹³⁴⁾ The general rationale underlying the dormant commerce clause is that it "prevents the economic balkanization of the United States into fifty separate and impenetrable markets."⁽¹³⁵⁾

In 1851, the United States Supreme Court decided Cooley v. Board of Wardens of the Port of Philadelphia.⁽¹³⁶⁾ This famous decision gave Congress the power to strike down state legislation affecting interstate commerce.⁽¹³⁷⁾ The Court in Cooley held that "[i]f the Constitution excluded the States from making law regulating commerce, certainly Congress [could] not regrant, or in any manner reconvey to the States that power."⁽¹³⁸⁾ The Court was speaking of that grant of power to the federal government by the United States Constitution enunciated in Article 1.⁽¹³⁹⁾ The Cooley Court struggled with whether there was an express prohibition of states' action in interstate commerce, and if not, then where the presumption of exclusivity came from.⁽¹⁴⁰⁾ In deciding the case, the Cooley Court held that:

The grant of commercial power to Congress does not contain any terms which expressly exclude the States from exercising an authority over its subject-matter. If they are excluded it must be because the nature of the power, thus granted to Congress, requires that a similar authority should not exist in the States.

 . . . .

 . . . Whatever subjects of this power are in their nature national, or admit only of one uniform system, or plan of regulation, may justly be said to be of such a nature as to require exclusive legislation by Congress.⁽¹⁴¹⁾

This line of thinking, that there were some powers that by their nature were exclusively federal, was not new and, in fact, was one of the threads of the foundation of the Constitution.⁽¹⁴²⁾ Thomas Jefferson, who was not recognized for his opposition against strong federal government, even believed that interstate commerce, especially when dealing with foreign nations, should be solely within the federal government's jurisdiction.⁽¹⁴³⁾

Had the United States Supreme Court ended its inquiry into the division between state and federal powers there, it would have held any state statute invalid if it involved regulation of commerce with foreign nations.⁽¹⁴⁴⁾ The Supreme Court however, went on to develop a more workable interpretation of this negative grant of commerce power to the federal government and the rights of states to enter that field. The Court was concerned with the problem of balancing states' rights with federal powers.⁽¹⁴⁵⁾ As a result of these contradicting interests, the Court, over time, developed a balancing test.⁽¹⁴⁶⁾ The test attempts to balance state and federal interests by recognizing local concerns with the national need for a cohesive commerce policy.⁽¹⁴⁷⁾ This balancing test was articulated in Pike v. Bruce Church, Inc.⁽¹⁴⁸⁾

In Pike, the Court dealt with an Arizona order under the Arizona Fruit and Vegetable Standardization Act, which prohibited the Pike company from shipping its cantaloupes outside of the state unless they were packed in containers approved by a state official.⁽¹⁴⁹⁾ In invalidating the statute, the Pike Court stated that:

Where the statute regulates evenhandedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits. If a

legitimate local purpose is found, then the question becomes one of degree.⁽¹⁵⁰⁾

The Court held that the enunciated state interest of having the fruit identified as originating in Arizona was not "constitutionally justif[iable]."⁽¹⁵¹⁾

Applying this balancing test to the Burma statute, it is clear that the statute is not designed to "effectuate a legitimate local public interest."⁽¹⁵²⁾ The stated goal of the Burma statute is to encourage nation-wide action, and to effect the flow of currency into the military regime now in control of Burma.⁽¹⁵³⁾ This extra-territorial goal would seem to, in effect, invalidate the Burma statute because it effectuates no legitimate local public interest (aside from an expression of disapproval for the actions of foreign governments), and it does far more then incidentally effect commerce.⁽¹⁵⁴⁾ However, the Pike balancing test has been further developed into what has become known as the "market participant" doctrine,⁽¹⁵⁵⁾ and it is important to apply this analysis before concluding that the Burma statute is invalid.

The market participant doctrine protects states when they are acting as a party to a commercial transaction rather than as a market regulator.⁽¹⁵⁶⁾ The Court has held that a state or state subdivision that acts as a market participant, rather than a market regulator, "is not subject to the restraints of the Commerce Clause."⁽¹⁵⁷⁾ In Hughes v. Alexandria Scrap Corp.,⁽¹⁵⁸⁾ the United States Supreme Court distinguished the situation presented by a Maryland statute from the statutes that had been scrutinized before it, and recognized that this statute was unique, in that it involved the state's expenditure of its own money.⁽¹⁵⁹⁾ The Court had then opened up a debate over when a state was acting as a market participant and when it was acting as a sovereign.⁽¹⁶⁰⁾

In Hughes, the Court held that "[n]othing in the purposes animating the Commerce Clause prohibits a State, in the absence of congressional action, from participating in the market and exercising the right to favor its own citizens over others."⁽¹⁶¹⁾ In so doing, the Court upheld a Maryland statute designed to rid the state of old automobiles.⁽¹⁶²⁾ The Court found it significant that Maryland "entered into the market itself to bid up [the old cars' scrap] price," and because Maryland was not using burdensome regulations or outright prohibition, the state's actions as a market participant passed judicial muster.⁽¹⁶³⁾ This holding was clarified by the Supreme Court in Reeves, Inc. v. Stake.⁽¹⁶⁴⁾

The Court in Reeves upheld a South Dakota Cement Commission policy of supplying all South Dakota customers first in times of shortage.⁽¹⁶⁵⁾ The Reeves Court held that the Commerce Clause was "directed, as a historical matter, only at regulatory and taxing actions taken by states in their sovereign capacity."⁽¹⁶⁶⁾ The Court discussed the issue of fairness.⁽¹⁶⁷⁾ Of importance to the Court reasoning was the fact that when a state is investing its own money, it was actually investing the money of the state's people.⁽¹⁶⁸⁾ It would be unfair, the Court held, to prohibit the state from acting as an individual investor would in the same circumstances.⁽¹⁶⁹⁾ The Reeves Court stated that:

[S]tate proprietary activities may be, and often are, burdened with the same restrictions imposed on private market participants. Evenhandedness suggests that, when acting as proprietors, States should similarly share existing freedoms from federal constraints, including the inherent limits of the Commerce Clause. . . . Finally, as this case illustrates, the competing considerations in cases involving state proprietary action often will be subtle, complex, politically charged, and difficult to assess under traditional Commerce Clause analysis.⁽¹⁷⁰⁾

This is an important distinction and is helpful in examining the Burma statute under the dormant commerce clause, and more specifically under the "market participant" doctrine. The issue to be addressed then, according to the Reeves Court, is whether the state, by enacting and enforcing the Burma statute, is a market regulator or a market participant. Investing the funds of the state, which are being held in trust for the people of the state, and to serve them, would appear (under the standards mentioned above) to be acts of a market participant, not a regulator.

Had the statute been a flat prohibition on any Massachusetts entity purchasing from companies that did business in or with Burma, the statute would be a clear violation of the dormant commerce clause. The Burma statute, however, only restricts government agencies from contracting with companies that do business in or with Burma.⁽¹⁷¹⁾ Because the statute only regulates government agencies, it is deemed to be acting as a market participant.⁽¹⁷²⁾ The analysis does not stop here, however, because there is another level, created by the United States Supreme Court's treatment of Buy-American statutes.⁽¹⁷³⁾

Buy-American statutes began to appear in the 1930s as a result of the "unprecedented unemployment" that the United States was facing.⁽¹⁷⁴⁾ The federal government decided to stimulate the economy by beginning a program of large scale public works.⁽¹⁷⁵⁾ The federal government was concerned that cheaper European labor would result in European firms outbidding United States firms, so the federal government passed the Buy-American law.⁽¹⁷⁶⁾ State Buy-American laws grew out of the same concerns, and they vary significantly from the federal Buy-American statute, but they all have a similar focus, and that is on the goods themselves.⁽¹⁷⁷⁾

The courts have treated Buy-American policies differently than pure divestiture statutes because of this difference in focus.⁽¹⁷⁸⁾ In differentiating between Buy-American statutes and divestiture statutes, the Court took into consideration the degree of scrutiny the foreign entity would be subject to by the regulating state.⁽¹⁷⁹⁾ With the divestiture statutes, which comment on the legitimacy of the foreign regime, the possibility of "offense [of the foreign entity is] a virtual certainty."⁽¹⁸⁰⁾

The structure of the Burma statute is similar to the Buy-American statutes, in that it sets up a ten percent preference quota.⁽¹⁸¹⁾ The federal Buy-American Act requires "federal agencies to treat a domestic bid as unreasonable or inconsistent with the public interest when it exceeds a foreign bid by more than six percent (customs duties included) or ten percent (customs duties and specified costs excluded)."⁽¹⁸²⁾

The Burma statute, however, like the divestiture statutes, comments on the legitimacy of the foreign regime; there is no apparent requirement that the government agencies purchase from Massachusetts companies, or even U.S. companies, so it seems even more likely that the foreign entity would be offended.⁽¹⁸³⁾ It is this possibility of offense that leads many to believe that the statutes, which comment on foreign regimes are inappropriate measures for commerce with foreign sovereignties, and that, in fact, such statutes would be subject to a different analysis under the Supremacy Clause.⁽¹⁸⁴⁾

C.  Supremacy Clause

The Supremacy Clause theory is founded on the idea that the formulation and administration of foreign affairs is vested exclusively in the federal government.⁽¹⁸⁵⁾ Although there is no provision of the Constitution that explicitly gives the federal government the power to conduct foreign affairs,⁽¹⁸⁶⁾ the Constitution does give the federal government power to regulate foreign commerce.⁽¹⁸⁷⁾ The Supreme Court has recognized the concept of the power of the federal government to conduct foreign affairs beyond the powers enunciated in the Constitution.⁽¹⁸⁸⁾ This concept developed from the theory that the states never had the power to conduct foreign affairs, so there was no requirement that it be expressly given to the federal government through a grant in the Constitution.⁽¹⁸⁹⁾

Consequently, any state law that involves the state in the actual conduct of foreign affairs is unconstitutional.⁽¹⁹⁰⁾ However, conduct that has only "some incidental or indirect effect in foreign countries" does not intrude on the foreign relations power.⁽¹⁹¹⁾ The basic idea behind this is that no single state should be allowed to act independently, in a way that may cause all the states to suffer.⁽¹⁹²⁾

This theory was best enunciated in Chy Lung v. Freeman et al.⁽¹⁹³⁾ The constitutional challenge in Lung dealt with a California statute that provided for the Commissioner of Immigration to take a bond from all persons entering the United States (not citizens of the United States) whom he believed to be unable to support themselves.⁽¹⁹⁴⁾ The Lung Court held that if a foreign sovereignty were to complain about this statute and seek redress it would be the federal government, not the state, that would be held responsible, because under "our Constitution, [California] can hold no exterior relations with other nations."⁽¹⁹⁵⁾ The Court pondered whether the Constitution allowed each state to negotiate with foreign sovereigns, and found that it most decidedly does not.⁽¹⁹⁶⁾

The passage of laws which concern the admission of citizens and subjects of foreign nations to our shores belongs to Congress, and not to the states. It has the power to regulate commerce with foreign nations: the responsibility for the character of those regulations, and for the manner of their execution, belongs solely to the national government. If it be otherwise, a single State can, at her pleasure, embroil us in disastrous quarrels with other nations.⁽¹⁹⁷⁾

The Court commented, however, that they were not deciding the right of a State in the "absence of legislation by Congress, to protect herself by necessary and proper laws."⁽¹⁹⁸⁾ That right, if it existed, could only arise from the "vital necessity" to use it, and it could not be carried beyond the scope of that necessity.⁽¹⁹⁹⁾ This issue would later be decided by the courts in Zschernig v. Miller.⁽²⁰⁰⁾

In Zschernig, the Supreme Court of the United States invalidated an Oregon statute that attempted to withhold proceeds of estates from heirs living in nations that discriminated against Americans in their probate law.⁽²⁰¹⁾ The Zschernig Court found that the law "held great potential for disruption or embarrassment."⁽²⁰²⁾ The Court concluded that the statute had a "direct impact upon foreign relations and had potential to adversely affect the power of the central government to deal with such problems."⁽²⁰³⁾ Therefore, the Court declared the statute to be invalid;⁽²⁰⁴⁾ if the local statute had only an "[in]direct impact upon foreign relation," it would presumably not violate the supremacy clause.⁽²⁰⁵⁾

The Burma statute exhibits many of the dangers exhibited by the statute reviewed by the Zschernig Court, and the Lung Court.⁽²⁰⁶⁾ The Burma statute, although providing no opportunity for judges to comment on foreign policy, allows for administrative officials (in particular the Secretary of Administration and Finance) to pass judgment on the nature of foreign regimes.⁽²⁰⁷⁾ On its face, the statute specifically addresses the country of Burma.⁽²⁰⁸⁾ It is directed towards changing the political climate in Burma, and stamping out the military regime.⁽²⁰⁹⁾ It appears therefore that the Burma statute might be contrary to the concept of statutes being facially neutral.⁽²¹⁰⁾

The Burma statute goes further still, in that it seems to comment on corporations that continue to do business in Burma.⁽²¹¹⁾ The statute requires that the Secretary of Administration and Finance maintain a restricted purchase list, and in so doing shall consult various agencies to determine which companies should be added to the list.⁽²¹²⁾ The statute also requires that this list be updated every three months, and that annually the Secretary of Administration and Finance shall report to the clerks of the senate and the house of representatives.⁽²¹³⁾

It appears, therefore, that the statute is providing for an ongoing appraisal of the situation in Burma, and the businesses that do business in or with Burma, causing an ongoing possibility with conflict of enforcement of the federal legislation (The Act).⁽²¹⁴⁾ The Zschernig Court also spoke of the potential for "embarrassment and disruption" of the federal system,⁽²¹⁵⁾ and the Lung Court spoke of the dilemma created if a foreign sovereignty were to complain about this statute and seek redress.⁽²¹⁶⁾

Both Courts held that if the state were to disturb a foreign entity it would be the federal government, not the state, that would be held responsible.⁽²¹⁷⁾ Clearly, it can be argued that this has already occurred, as the United States may now find itself hauled in front of a dispute settlement board for violation of its (the United States) obligations under the World Trade Organization Government Procurement Agreement.⁽²¹⁸⁾

D.  International Law: World Trade Organization Government Procurement Agreement

Treaties are made the "law of the land" by Article VI of the Constitution.⁽²¹⁹⁾ Therefore, treaties have the status of United States domestic laws.⁽²²⁰⁾ Under the United States Constitution, treaties can only take four forms;⁽²²¹⁾ the most common forms being Article II treaties,⁽²²²⁾ and Article VI treaties.⁽²²³⁾

The General Agreement on Tariffs and Trade (GATT) is an Article VI treaty,⁽²²⁴⁾ and the Untied States is a party by election to this multilateral international agreement.⁽²²⁵⁾ As previously mentioned, the legal significance of the GATT is that "[a] state law must yield when it is inconsistent with or impairs the policy or provisions of a treaty."⁽²²⁶⁾ Membership in the GATT entitles countries to "most favoured [sic] nation" status,⁽²²⁷⁾ which lowers tariffs and trade barriers significantly; in effect opening up the boarders to free trade with nations so designated.⁽²²⁸⁾

In 1994 the members of GATT convened for the Uruguay Round.⁽²²⁹⁾ This meeting resulted in a renegotiation of the GATT creating the World Trade Organization (WTO). The WTO is an umbrella organization that encompasses the GATT structure and extends it to new areas.⁽²³⁰⁾

What is important about this agreement, for the purposes of reviewing the Burma statute is one of its sub-agreements; the Government Procurement Agreement (WTO-GPA);⁽²³¹⁾ this new agreement known as the "Code"⁽²³²⁾ requires central government agencies in member countries to observe "non-discriminatory, fair, and transparent procedures" when they purchase certain goods.⁽²³³⁾ The 1996 Code covers the procurement of both goods and services,⁽²³⁴⁾ and applies "to purchases by subcentral governments⁽²³⁵⁾ and government-owned enterprises, as well as by central governments."⁽²³⁶⁾

The "Code" is made binding on the states by the Uruguay Round Agreements Act [hereinafter Uruguay Act],⁽²³⁷⁾ and when a dispute arises under the "Code" the Uruguay Act provides that the Office of the United States Trade Representative shall institute a federal-state consultation process.⁽²³⁸⁾ The Uruguay Act includes provisions for legal challenges, and the procedures for their resolution.⁽²³⁹⁾ One subsection of particular interest to evaluation of the Burma statute is section 102(b)(2)(A), which states that:

In general.--No State law, or the application of such a State law, may be declared invalid as to any person or circumstance on the ground that the provision or application is inconsistent with any of the Uruguay Round Agreements, except in an action brought by the United State for the purpose of declaring such law or application invalid.⁽²⁴⁰⁾

It is this exception to the rule that Massachusetts may soon find itself in as a result of the Burma statute.⁽²⁴¹⁾

On January 8, 1997 Japanese government officials met with the representative of the Massachusetts Office of International Trade and Investment and filed a protest against the Burma statute, stating that the law violates the WTO-GPA.⁽²⁴²⁾ The Japanese government made the same protest to the United States State Department and to the United States Trade Representatives Office in Washington D.C.⁽²⁴³⁾

The Japanese government is not the only international power protesting this bill.⁽²⁴⁴⁾ In an almost unprecedented move, the European Union also complained to the United States State Department and the United States Trade Representatives (USTR) Office in Washington DC on the same grounds.⁽²⁴⁵⁾ If the USTR determines that the statute puts the United States in violation of its international obligations under the WTO-GPA, they could force Massachusetts to change the law.⁽²⁴⁶⁾

In June of 1997, the European Union also filed an official complaint with the WTO.⁽²⁴⁷⁾ The Uruguay Round provides procedures under which state laws can be challenged.⁽²⁴⁸⁾ If the USTR determines that Massachusetts law violates the WTO-GPA, an action can be brought by the United States against the State of Massachusetts.⁽²⁴⁹⁾ If such an action is brought by the USTR, the Burma statute would be subject to intense scrutiny.⁽²⁵⁰⁾

The statute has already been the subject of an enormous amount of media and corporate scrutiny, and has put Massachusetts on the front line of a possible trade war, with the European Union and Japan on one side and Massachusetts on the other.⁽²⁵¹⁾ Massachusetts would likely stand alone because the USTR is required to ensure the subcentral governments observe "non-discriminatory, fair and transparent procedures."⁽²⁵²⁾

The Burma statute would likely be found in violation of this provision, as it employs a discriminatory method for government procurement.⁽²⁵³⁾ The WTO-GPA specifically states that "[e]ntities shall not, in the qualification and selection of suppliers, products or services, or in the evaluation of tenders and award of contracts, impose, or seek or consider offsets."⁽²⁵⁴⁾

The Burma statute which, strongly resembles the Buy-American statutes⁽²⁵⁵⁾ and the divestiture statutes of the 1980s,⁽²⁵⁶⁾ imposes restriction on trade that are impermissible under the WTO-GPA,⁽²⁵⁷⁾ and, as a result, puts the United States in violation of its international obligations under the same treaty.⁽²⁵⁸⁾ Thus, if the USTR were to bring an action on behalf of the United States, the Burma statute would likely fail.⁽²⁵⁹⁾

  Conclusion

The Burma statute born of good intentions, is unconstitutional and a violation of United States treaty obligations.⁽²⁶⁰⁾ The Burma statute is preempted because it trespasses into a field of law traditionally reserved for the federal government.⁽²⁶¹⁾ That field is deemed to be the sole domain of the government because the interests involved are national.⁽²⁶²⁾ Congress occupies this field to the exclusion of parallel state legislation, because state intervention and the administration of states' Acts would conflict with the operation of the federal plan.⁽²⁶³⁾ Further, the Burma statute imposes restrictions on trade that are impermissible under the WTO-GPA, and, as a result, put the United State in violation of its treaty obligations.⁽²⁶⁴⁾

Finally, the Burma statute, like the South Africa divestiture statutes, comments on the legitimacy of a foreign regime, which makes it likely that the foreign entity would be offended.⁽²⁶⁵⁾ It is this possibility of offense that makes the statute an inappropriate measure for commerce with foreign sovereignties.⁽²⁶⁶⁾ If the Burma statute were to offend a foreign entity, it would be the United States who would answer when the foreign entity sought redress.⁽²⁶⁷⁾ Therefore, it should be the federal government who speaks for the United States, not Massachusetts.⁽²⁶⁸⁾ For these reasons, the Burma statute should be struck down.

Jennifer Loeb-Cederwall^*

1. See MacBride Principles Bill, H. 5582, 178th Leg. (Ma. 1994) (codified as amended at Mass. Gen. Laws ch. 7, §§ 22C-F (1996)) (prohibiting the purchase by state agencies, authorities or the legislature, of goods and services from persons that maintain a business presence in Northern Ireland, and fail to take specified steps to eliminate discrimination in employment, compensation and tenure, and to promote religious tolerance in the workplace); H. 4909, 178th Leg. (Ma. 1995) (mandating corporate standards of conduct upon all individuals, partnerships, firms, associations, corporations, and other entities receiving any economic development funds from the Commonwealth of Massachusetts relative to any business interests involving the People's Republic of China) (on file with the New England Law Review); H. 2833, 179th Leg. (Ma. 1996) (restricting Commonwealth contracts with companies doing business with or in Burma) (on file with the New England Law Review); H. 6320, 179th Leg. (Ma. 1996) (restricting Commonwealth contracts with companies doing business with or in Indonesia) (on file with the New England Law Review).

2. Press Release: Weld, Celluci Sign Burma Bill, Commonwealth of Massachusetts, Executive Department, June 25, 1996 [hereinafter Weld Press Release] (on file with the New England Law Review) (proclaiming Massachusetts as the "First State in the Nation to Impose Economic Sanctions").

3. See Mass. Gen. Laws ch. 7, §§ 22G-M (1996).

4. Weld Press Release, supra note 2. Burma is embroiled in an internal struggle that pits its military-led government against a pro-democracy movement led by Aung San Suu Kyi. See National Trade Data Bank-U.S. Embassy Rangoon (Yangon), Doing Business with Burma (Myanmar) (Apr. 1994) [hereinafter Doing Business with Burma] (on file with the New England Law Review). Aung San Suu Kyi won the Nobel Peace Prize in 1991. See Joe Urschel, College Cry: "Free Burma"; Activists Make Inroads with U.S. Companies, USA Today, Apr. 29, 1996, at A1. Aung San Suu Kyi won a 1990 election to lead Burma, but the military stopped parliament from convening and she was put under house arrest. See Associated Press, U.S. Slaps Sanction on Burma, Chi. Trib., Oct. 4, 1996, at 14. There is a prevailing belief that U.S. aid to Burma's ruling junta will create a veil of legitimacy to an illegitimate regime. See Denis D. Gray, U.S. May Aid Burma Drug Fight Foes Insist First on Human Rights Gains, Sacramento Bee, May 26, 1995, at A40.

5. See infra notes 71-259 and accompanying text.

6. See Omnibus Consolidated Appropriations Act of 1997, Pub. L. No. 104-208, § 570, 110 Stat. 3009, 3009-166, -167 (1996); see also Exec. Order No. 13047, 62 Fed. Reg. 28,301 (1997), reprinted in 50 U.S.C.A § 1701 nt. (West Supp. 1998); infra Part III.A.

7. See infra Part III.B.

8. See infra Part III.C; see also U.S. Const. art. I, § 10.

9. See Uruguay Round Agreements Act, Pub. L. No. 103-465, § 101, 108 Stat. 4809 (codified at 19 U.S.C.A. § 3511 (West Supp. 1998)); see also infra Part III.D.

10. See infra Part III.A.

11. See infra Part III.D.

12. See infra notes 22-40, 68-70 and accompanying text.

13. See infra notes 41-67 and accompanying text.

14. See infra notes 71-131 and accompanying text.

15. See infra notes 132-84 and accompanying text.

16. See infra notes 185-218 and accompanying text.

17. See infra notes 219-59 and accompanying text.

18. See infra Part IV.

19. See id.; see also infra Part III.B.

20. See infra Part IV; see also infra Part III.C.

21. See infra Part IV; see also infra Part III.D.

22. In September of 1988, the State Law and Order Restoration (SLORC), a military regime took control of Burma, renamed it Myanmar and declared it a market-oriented country. See Doing Business with Burma, supra note 4.

23. See id.

24. See id.; see also National Trade Data Bank-The Export Connection, Burma--Foreign Investments (Apr. 26, 1995) [hereinafter Burma--Foreign Investments] (on file with the New England Law Review).

25. See Doing Business with Burma, supra note 4; Burma--Foreign Investments, supra note 24.

26. See Burma--Foreign Investments, supra note 24. Among those treaties are: Agriculture (1962); Aviation (1949); Defense (1980); Economic and Technical Cooperation (1957); Education (1961); Extradition (1941); Finance (1966); Information Media Guaranties (1956); Narcotic Drugs (1974); Publications (1948); and Trade (1987). See id.

27. See Doing Business with Burma, supra note 4.

28. See id. The major exports are the agriculture and forestry products of: teak and hardwood logs, beans, and rice. See id.

29. See Activists Say Burma Pressure Will Continue, Despite Military's Release of Aung San Suu Kyi, Social Issues Rep., 1RRC, July/Aug. 1995, at 20 [hereinafter Release of Aung San Suu Kyi].

30. See id. Since World War II and the Nazi atrocities, "[t]he treatment by a state of its own national has now become a matter of international concern." Barry E. Carter & Phillip R. Trimble, International Law 894 (2d ed. 1995).

The international human rights movement is based on the concept that every nation has an obligation to respect the human rights of its citizens, and that other nations and the international community have a right, and responsibility, to protest if this obligation is not lived up to. International human rights law consists of the body of international rules, procedures, and institutions developed to implement this concept and to promote respect for human rights in all countries on a worldwide basis.Id.

Some examples of international human rights declarations are the 1948 Universal Declaration of Human Rights and Genocide Convention; the 1952 Convention on the Political Rights of Women; the 1957 Standard Minimum Rules for the Treatment of Prisoners; the 1965 Convention on the Elimination of All Forms of Racial Discrimination; and the International Covenant on Civil and Political Rights and International Covenant on Economic, Social, Cultural Rights in 1966. See id. at 895-96. There are also a great number of regional human rights agreements: the European Convention on Human Rights; the 1960 Inter-American Commission on Human Rights; and the 1978 American Convention on Human Rights. See id. at 896.

31. See U.S. Policy Toward Burma: Hearings on S. 1511 Before the Senate Comm. on Banking, Housing, and Urban Affairs, 104th Cong. (May 22, 1996) (statement of Kent Wiedemann, Deputy Assistant Secretary of State, Bureau of East Asian and Pacific Affairs) [hereinafter Weidemann statement].

32. See Urschel, supra note 4, at A1.

33. See Release of Aung San Suu Kyi, supra note 29, at 20.

34. Id.

35. See id.

36. See id.

37. Ted Bardacke, Pressure Grows for Sanctions, Financial Times, Oct. 26, 1996, at B6.

38. See id.

39. See Our Obligation to a Democrat, Boston Globe, Nov. 16, 1995, at 18. The editorial stated, in part:

It is not often that moral criteria determine U.S. foreign policy. One instructive exception was the patient policy of economic sanctions against the apartheid regime in South Africa. . . . 

If there is today an illegitimate tyranny that deserves the same quarantining as the apartheid regime of South Africa, it is the military junta that has usurped power in Burma.Id.

40. See id.

41. The Burma statute is based on the Massachusetts anti-apartheid statute. See Mass. Gen. Laws ch. 32, § 23(1)(d)(ii) (1996).

42. See Telephone Interview with Harold Fisher, General Counsel, State Operational Services Division, Department of Administration and Finance (Nov. 12, 1996).

43. Mass. Gen. Laws ch. 32, § 23(1)(d)(ii) (1996).

44. See Constitutionality of South African Divestment Statutes Enacted by State and Local Governments, 10 Op. Off. Leg. Counsel 49 (1986) [hereinafter South Africa Opinion] (on file with the New England Law Review).

45. See id. at 49 n.1 (citing 1985 N.J. Laws 308 (directing that the state treasurer not invest pension funds under state control in any institution which has outstanding loans to the Republic of South Africa, or in the stocks, securities or other obligations of any company engaged in business in the republic and directing that such existing investments be divested within three years)); R.I. Gen. Laws ch. 35-10 (1985) (requiring divestment of state funds and pension funds invested in any financial institution lending money to or any corporation doing business in South Africa).

46. See Mass. Gen. Laws ch. 32, § 23(1)(d)(ii) (1996).

47. See id.

48. See infra notes 49-71 and accompanying text. One exception to this may be a Pittsburgh ordinance, Pittsburgh, Pa., Ordinance 14 (Feb. 25, 1985) (amending Pa. Code § 657.03), which banned city purchases not only from business entities with South African operations, but also from business entities providing goods or services to American concerns connected with South Africa.

49. See Grace A. Jubinsky, Note, State and Municipal Governments React Against South African Apartheid: An Assessment of the Constitutionality of the Divestment Campaign, 54 U. Cin. L. Rev. 543, 543-44 (1985).

50. See id. at 544.

51. See id. at 544-45.

52. See id. at 545; see also Conn. Gen. Stat. §§ 3-13f (Supp. 1984); 1984 Md. Laws ch. 7, § 3632; Mass. Gen. Laws ch. 32, § 23(1)(d)(ii) (1984); Mich. Comp. Laws § 34.2402 (1984); Neb. Rev. Stat. ch. 72, §§ 1270-76 (1984).

53. See Mass. Gen. Laws ch. 32, § 23(1)(d)(ii) (1984). Other states soon followed suit with variations of this divestiture statute. See, e.g., R.I. Gen. Laws ch. 35-10 (1985).

54. See Jubinsky, supra note 49, at 545-46.

55. See id.

56. See id.

57. See Mass. Gen. Laws ch. 7, §§ 22G-M (1996).

58. See infra notes 59-70 and accompanying text.

59. See Peter J. Spiro, Note, State and Local Anti-South Africa Action as an Intrusion Upon the Federal Power in Foreign Affairs, 72 Va. L. Rev. 813, 814 & nn.11-12 (1986). "Although the existence of some basic constraints on state and local action has long been assumed, the field shares the hallmark of much constitutional theorizing--an abundance of academic writing built on a flimsy foundation of sparse case law." Id. at 814 (footnote omitted).

60. See id. at 814 n.12. In his law review article, Mr. Spiro takes the stance that there is even less case law because of fear of guilt by association. See id. He states that

the case law is even sparser here than in other areas of constitutional law. This is probably due in part to the fact that a litigant might fear identification with the foreign power against whom the statute or action is directed. For example, were a corporation to challenge an anti-Cuba provision, that corporation could be identified in the public mind as pro-Cuban, with the attending implications for its business.Id.; see also 131 Cong. Rec. S9387 (daily ed. July 11, 1985) (statement of Sen. Proxmire). The conspicuous absence of challenges may be because no corporation wants to be identified as a supporter of one of these regimes.

61. Spiro, supra note 59, at 813 n.12 (citing Monaco v. Mississippi, 292 U.S. 313, 330 (1994)).

62. Exec. Order No. 12,532, 3 C.F.R. § 387 (1985), revoked by Exec. Order No. 12,769, 56 Fed. Reg. 31,855 (1991), reprinted in 22 U.S.C § 5061 (1994).

63. 50 U.S.C. §§ 1701(a) (1994) (granting the President sweeping powers where he finds "any unusual and extraordinary threat . . . to the national security, foreign policy, or economy of the United States").

64. See Exec. Order No. 12,532, 3 C.F.R. § 387 (1985), revoked by Exec. Order No. 12,769, 56 Fed. Reg. 31,855 (1991), reprinted in 22 U.S.C § 5061 (1994).

65. See 22 U.S.C. §§ 5001-16 (Supp. V 1987).

66. See Weld Press Release, supra note 2; see also Release of Aung San Suu Kyi, supra note 29; Urschel, supra note 4, at A1.

There is an alternative theory for why this bill was passed into law despite Governor Weld's propensity to veto such legislation. Governor Weld has seen four other bills pass his desk in the last two years and he has either vetoed or threatened to veto them; what makes this bill different is that it came in an election year. See Frank Phillips, Weld Expected to Out-Liberal Kerry, Sign Anti-Burma Bill, Boston Globe, June 13, 1996, at 30. The article stated that:

The governor's decision sharply contrasts with previous cases when he opposed using sanctions and interfering in free trade to promote human rights. In a 1991 trade mission to China, Weld brushed aside concerns about that nation's human rights record, saying he wanted to treat the issue in private.

Now, in the heat of his campaign to unseat U.S. [Senator] John F. Kerry, Weld is not only singing the Burma bill but also orchestrating a press conference Tuesday to mark the event . . . .Id.; see also Wayne Woodlief, Burma Bill May Gain Votes for Weld, Boston Herald, June 13, 1996, at 35. The article states that Governor Weld had an opportunity to embarrass Senator John Kerry by signing the bill into law. See id. "The gift is a bill, passed overwhelmingly by voice vote in both houses of the Legislature . . . . By becoming the first governor in the nation to sign a so-called `selective purchasing law' against the Burma dictators, Weld could score a ten-strike on several counts." Id.

67. See infra Part III.

68. See Mass. Gen. Laws ch. 7, §§ 22G-M (1996).

69. Id. § 22G. This section defines "doing business with or in Burma" as follows:

(a) having a principal place of business, place of incorporation or its corporate headquarters in Burma (Myanmar) or having any operations, leases, franchises, majority-owned subsidiaries, distribution agreements, or any other similar agreements in Burma (Myanmar), or being the majority-owned subsidiary, licensee or franchise of such a person; (b) providing financial services to the government of Burma (Myanmar), including providing direct loans, underwriting government securities, providing any consulting advice or assistance, providing brokerage services, acting as a trustee or escrow agent, or otherwise acting as an agent pursuant to a contractual agreement; (c) promoting the importation or sale of gems, timber, oil, gas or other related products, commerce in which is largely controlled by the government of Burma (Myanmar), from Burma (Myanmar); (d) providing any goods or services to the government of Burma (Myanmar).Id.

70. Mass. Gen. Laws ch. 7, § 22F (1996); see also infra notes 71-131 and accompanying text. As of this writing, the Massachusetts Secretary of Administration and Finance had not "promulgated" such regulations. In a phone interview with Harold Fisher, General Counsel, Operational Services Department, Fisher seemed to believe that no special legislative action was required. See Telephone Interview with Harold Fisher, Operational Services Division, Department of Administration and Finance (Nov. 27, 1996 & Jan. 9, 1997). He stated that it was his belief that a simple line in the policy and procedures handbook was enough to fulfill the spirit of the law for the "promulgation of regulations" requirement of the statute. See id. Mr. Fisher also stated that it would be up to the individual state agencies to comply with the statute. See id. In fact, according to Mr. Fisher, state agencies are already supposed to be in compliance with the statute now, even though the list has not been finalized. See id.

71. See Commonwealth v. Nelson, 350 U.S. 497, 502-06 (1956) (dealing with the conviction of Steve Nelson, a member of the Communist Party, for violation of the Pennsylvania Sedition Act). The Nelson Court held that there was nothing indicating a "seditious act or even utterance directed against the Government of Pennsylvania." Id. at 499. The Nelson Court went on to say that "the Smith Act[,] . . . which prohibits the knowing advocacy of the overthrow of the Government of the United States by force and violence, supersedes the enforceability of the Pennsylvania Sedition Act which proscribes the same conduct." Id.

72. See id. at 502.

73. See id. at 504; see also Kentucky West Virginia Gas Co. v. Pennsylvania Public Utility Comm'n, 837 F.2d 600, 606 (3d Cir. 1988).

74. Trojan Tech., Inc. v. Pennsylvania, 916 F.2d 903, 906 (3d Cir. 1990); see also Nelson, 350 U.S. at 505.

75. Jones v. Rath Packing Co., 430 U.S. 519, 525 (1977) (holding that procurement is a field normally left to the state government, and therefore Congressional intent must be clear, if it is to preempt the state law).

76. See Tafflin v. Levitt, 493 U.S. 455, 458-59 (1990).

77. 350 U.S. 497 (1956).

78. See id. at 502-05. In developing its three-prong test, the Nelson Court looked at language used in earlier cases, challenging statutes on the grounds of preemption, and found them to be ineffective:

[T]his Court, in considering the validity of state laws in the light of . . . federal laws touching the same subject, has made use of the following expressions: conflicting; contrary to; occupying the field; repugnance; difference; irreconcilability; inconsistency; violation; curtailment; and interference. But none of these expressions provides an infallible constitutional test or an exclusive constitutional yardstick. In the final analysis, there can be no one crystal clear distinctly marked formula.Id. at 502 (quoting Hines v. Davidowitz, 312 U.S. 52, 67 (1941)).

79. See id. at 502-10.

80. See id. at 498 & n.1 (citing Pennsylvania Sedition Act, Pa. Stat. Ann. tit. 18, § 4207 (West 1950) (repealed)).

81. Id. at 498 n.2 (quoting Pa. Stat. Ann. tit. 18, § 4207(c) (West 1950)).

82. Id. at 502, 504 (quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947), rev'd sub nom. Rice v. Board of Trade of City of Chicago, 331 U.S. 247 (1947)) (citing Smith Act of 1940, 18 U.S.C. § 2385 (1994))).

83. See Nelson, 350 U.S. at 502. The Smith Act defined sedition as "advocacy of the overthrow of any government--federal, state or local--by force and violence and organization of and knowing membership in a group which so advocates." Id. (footnote omitted).

84. See id. at 502-04 (citing Internal Security Act of 1950, 50 U.S.C. § 781 et seq.; Communist Control Act of 1954, 50 U.S.C. §§ 841, 843).

85. Id. at 504. The Court went on to say that "[t]aken as a whole, [the Acts] evince a congressional plan which makes it reasonable to determine that no room has been left for the States to supplement it. Therefore, a state sedition statute is superseded regardless of whether it purports to supplement the federal law." Id.

86. Id. (quoting Rice, 331 U.S. at 230).

87. Id. at 504-05 (referencing the Central Intelligence Agency (CIA) and the Federal Bureau of Investigation (FBI)).

88. See Nelson, 350 U.S. at 505.

89. Id.

90. Id.

91. See id. at 509.

92. See id. at 506, 509.

93. Id. at 508 (citing Commonwealth v. Nelson, 104 A.2d 133, 141 (Pa. 1954)).

94. See Nelson, 350 U.S. at 506-07.

95. Id. at 507 (quoting the FBI Director).

96. See id. at 509.

97. Id.

98. See id. at 510.

99. Compare Smith Act, 18 U.S.C. § 2385 (1994), and Pennsylvania Sedition Act, Pa. Stat. Ann. tit. 18, § 4207 (repealed), with Omnibus Consolidated Appropriations Act of 1997, Pub. L. No. 104-208, § 570, 110 Stat. 3009, 3009-166, -167 (1996), and Mass. Gen. Laws ch. 7, §§ 22G-M (1996).

100. See Omnibus Consolidated Appropriations Act of 1997, Pub. L No. 104-208, § 570, 110 Stat. 3009, 3009-166, -167 (1996).

101. See Nelson, 350 U.S. at 501-04 (concluding that the persuasiveness of the federal regulations pointed to a congressional intent to occupy the field of sedition).

102. See Omnibus Consolidated Appropriations Act of 1997, Pub. L. No. 104-208, § 570, 110 Stat. 3009, 3009-166, -167 (1996).

103. Id. § 570(b).

104. Id.

105. See Wiedemann statement, supra note 31.

106. See id. According to Kent Wiedemann, Deputy Assistant Secretary of State, Bureau of Asian and Pacific Affairs, the federal government supports a range of tough measures designed to bring about the termination of human rights abuses, aid in development of democracy, and to help end heroin trafficking. See id.

107. See id. The types of assistance programs and banks that have been cut off are: the Generalized System of Preferences, OPIC Insurance, Eximbank, the International Monetary Fund, and World Bank. See id.

108. See id. (discussing Eximbank and OPIC loans and insurance).

109. See id.

110. Pennsylvania v. Nelson, 350 U.S. 497, 504 (1956).

111. See id.

112. See id. at 505.

113. See Wiedemann statement, supra note 31 and accompanying text; see also President William Jefferson Clinton, Address to the Joint Session of the Australian Parliament (November 19, 1996), available at 1996 WL 12720237. The President stated that the United States was attempting to communicate with the government in Burma to resolve the situation. See id. This would appear to be a symbol of constructive engagement, and a clear sign that the United States is not ready to impose sanctions as a nation against the military regime in Burma.

114. See Omnibus Consolidated Appropriations Act of 1997, Pub. L. No. 104-208, § 570, 110 Stat. 3009, 3009-166, -167 (1996).

115. Id. In May 1995, Lee Brown, director of the White House Office on Drug Control Policy and the Clinton Administration's then top anti-drug official, stated that "[c]learly if you are going to deal with the heroin problem you have to engage Burma." Id. The U.S. Drug Enforcement Administration and the section of the U.S. State Department dealing with narcotics, as well as the White House, favor more cooperation with Rangoon (the capital of Burma). See id. This is important because, if the federal government has a policy of "engagement," state laws that conflict with that policy run the risk of being invalidated through preemption. See id.

116. See id.

117. See id.

118. See Remarks by President Clinton at Press Conference in Australia (November 19, 1996), available at 1996 WL 12720237.

119. See Associated Press, U.S. Slaps Sanctions on Burma Military Accused of New Repression, Chicago Tribune, Oct. 4, 1996, at 14. This legislation followed a weekend of arrests by the military junta, of pro-democracy advocates who were trying to attend a speech by Aung San Suu Kyi. See id. The regime claimed that the 500 arrested "were colluding with the U.S. Embassy to instigate unrest." Id. Burma was to be admitted as an Association of South East Asian Nations (ASEAN) member, but after this most recent round of forceful arrests this membership does not look as secure. At least two members of ASEAN, the Philippines and Thailand, seem unlikely to support Burma's membership at this point. See id.

120. See id.

121. Pennsylvania v. Nelson, 350 U.S. 497, 504 (1956) (quoting Charleston & Western Carolina R. Co. v. Varnville Furniture Co., 237 U.S. 597, 604 (1915) (Holmes, J.)).

122. See id. at 505.

123. See id.

124. See id. (holding that such a "state . . . statute is superseded regardless of whether it purports to supplement the federal law").

125. Id.

126. See id.

127. See Omnibus Consolidated Appropriations Act of 1997, Pub. L. No. 104-208, § 570, 110 Stat. 3009, 3009-166, -167 (1996).

128. Id. The "multilateral strategy" referred to in (3) is developed in section 570(c). It states that:

The President shall seek to develop, in coordination with members of ASEAN [Association of East Asian Nations] and other countries having major trading and investment interests in Burma, a comprehensive, multilateral strategy to bring democracy to and, improve human rights practices and the quality of life in Burma, including the development of a dialogue between the State Law and Order Restoration Council (SLORC) and democratic opposition groups in Burma.Id.

129. See Nelson, 350 U.S. at 509 (quoting Garner v. Teamsters Local 776, 346 U.S. 485, 490-91 (1953)).

130. Id.

131. See U.S. Const. art. I, § 8, cl. 3.

132. U.S. Const. art. I, § 8, cl. 3.

133. See Swin Resource Systems, Inc. v. Lycoming County, 883 F.2d 245, 248 (3d Cir. 1989) (citing Cooley v. Board Of Wardens, 53 U.S. (12 How.) 299, 319 (1851)).

134. See Hughes v. Oklahoma, 441 U.S. 322, 326 (1979).

135. Trojan Techs., Inc. v. Pennsylvania, 916 F.2d 903, 909 (3d Cir. 1990) (citing Hughes, 441 U.S. at 326)..

136. 53 U.S. (12 How.) 299 (1851).

137. The Cooley decision has been used by virtually every court since its decision when addressing the issue of the Dormant Commerce Clause. Cooley dealt with a Pennsylvania statute of 1803 which required vessels coming into or leaving the Port of Philadelphia to accept local pilots for pilotage through the Delaware River.

138. Cooley, 53 U.S. at 308.

139. U.S. Const. art. I, § 8, cl. 3 ("Congress shall have Power . . . To regulate Commerce with foreign Nations, and among the several States . . . .").

140. Cooley, 53 U.S. at 318-19.

141. Id. at 319.

142. See 2 Memoir, Correspondence and Miscellanies from the Papers of Thomas Jefferson 230 (1829) [hereinafter Jefferson]; cf. The Federalist No. 42 (James Madison):

The second class of powers, lodged in the general government, consist of those which regulate the intercourse with foreign nations. . . . This class of powers forms an obvious and essential branch of the federal administration. If we are to be one nation in any respect, it clearly ought to be in respect to other nations.Id.

143. See Jefferson, supra note 142, at 230. In 1787, Jefferson stated, "My own general idea was, that the States should severally preserve their sovereignty in whatever concerns themselves alone, and that whatever may concern another State, or any foreign nation, should be made a part of the federal sovereignty." Id.

144. Cooley, 53 U.S. at 319-20.

145. See id.

146. See Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970).

147. See id.

148. 397 U.S. 137 (1970).

149. See id. at 139-40.

150. Id. at 142 (emphasis added) (citation omitted).

151. Id. at 145.

152. Id.; see also Mass. Gen. Laws ch. 7, §§ 22G-M (1996).

153. See Weld Press Release, supra note 2.

154. See Doing Business with Burma, supra note 4; see also Wickard v. Filburn, 317 U.S. 111, 127-28 (1942) (holding that acts, on their own, would not draw commerce clause inquiry but, taken in the aggregate, would violate the commerce clause).

155. See infra notes 156-63 and accompanying text.

156. See Hughes v. Alexandria Scrap Corp., 426 U.S. 794, 809-10 (1976) (holding that, as a "market participant," Maryland was acting as a constituent of its peoples' interests and, therefore, if it was investing its own money (the money of its constituents), it was free from the normal Commerce Clause regulations); see also Reeves, Inc. v. Stake, 447 U.S. 429, 437 (1990). Taxation is an example of a market regulatory act. See id.

157. White v. Massachusetts Council of Constr. Employers, Inc., 460 U.S. 204, 208 (1983)).

158. 426 U.S. 794 (1976).

159. See id. The Hughes Court differentiated the Maryland statute from those analyzed in other Court opinions. See id. at 805-06 (citing Pike v. Bruce Church, 397 U.S. 137 (1970) (holding an impermissible burden on interstate commerce posed by an "Arizona requirement that fresh fruit grown in the State be packed there before shipment interstate"); H.P. Hood & Sons v. Du Mond, 336 U.S. 525 (1949) (holding that denial of a license to a milk distributor who wanted to open a new plant, resulted in a block of any potential increase in the interstate movement of raw milk); Toomer v. Witsell, 334 U.S. 385 (1948) (holding that a South Carolina requirement that shrimp boats fishing off its coast dock in South Carolina and pack and pay taxes was an impermissible burden on interstate commerce); Foster-Fountain Packing Co. v. Haydel, 278 U.S. 1 (1928) (holding that a Louisiana statute which forbade export of Louisiana shrimp until they had been shelled was an impermissible burden on interstate commerce); Shafer v. Farmers Grain Co., 268 U.S. 189 (1925) (holding that a North Dakota statute regulating profit margins of corporations that purchased grain in State for shipment and sale outside the State was an impermissible burden on interstate commerce); Lemke v. Farmers Grain Co., 258 U.S. 50 (1922) (North Dakota statute struck down for same reason as in Shafer); Pennsylvania v. West Virginia, 262 U.S. 553 (1923) (holding that a West Virginia state statute requiring domestic producers to supply all domestic gas needs first, before selling it out of state, was an impermissible burden on interstate commerce)).

160. See Hughes, 426 U.S. at 810 (holding that a Maryland statutory scheme for ridding the state of old automobiles did not constitute an impermissible burden on interstate commerce). In Reeves, the Court stated that "generally speaking [the market participant rule] allows immunity from commerce-clause attack where the state acts in its proprietary capacity. The motivating principle is that a state acting analogously to a private corporation should enjoy the same freedoms that corporations do." Reeves, 447 U.S. at 439.

161. Hughes, 426 U.S. at 810.

162. See id.

163. Id.

164. 447 U.S. 429 (1980) (upholding a South Dakota practice of limiting, in times of shortage, the sale of cement produced by state owned plants, to state residents).

165. See Reeves, 447 U.S. at 429, 436-37. The Reeves Court quoted extensively from Hughes v. Alexandria Scrap and relied heavily on that decision as the basis for their own decision. "The basic distinction drawn in Alexandria Scrap between States as market participants and States as market regulators makes good sense and sound law. As that case explains, the Commerce Clause responds principally to state taxes and regulatory measures impeding free private trade in the national marketplace." Id. (citing Hughes, 426 U.S. at 807-08)).

166. Reeves, 447 U.S. at 437 (quoting Laurence H. Tribe, American Constitutional Law 336 (1978)). Typical acts of a sovereign are taxes, duties, and regulations excluding imports. See id.

167. See id. at 439.

168. See id.

169. See id.

170. Id. at 439.

171. See Mass Gen. Laws ch. 7, §§ 22G-M (1996).

172. See Hughes, 426 U.S. at 810.

173. See James C. Olson, Note, Federal Limitations on State `Buy American' Laws, 21 Colum. J. Transnat'l L. 177, 178 (1982).

174. See id. These "buy national" statutes appeared in many countries as a result of national economic down turns. See generally Gerald De Graaf & Matthew King, Towards a More Global Government Procurement Market: The Expansion of the GATT Government Procurement Agreement in the Context of the Uruguay Round, 29 Int'l Law 435 (1995).

175. See Olson, supra note 173, at 178.

176. See id.

177. See id. at 179.

No state presently enforces a blanket prohibition on the purchase of foreign products with public funds, however, several states do prohibit governmental purchases of specific products when such products are of foreign origin. Of those states taking a flexible approach, three require by statute that the cost of the domestic product not exceed the cost of the foreign product by more than a specific differential. Three states shift the burden of deciding when the domestic product is too expensive to the appropriate administrative agency by mandating the purchase of the American product unless the price is `unreasonable.'Id.

178. See, e.g., K.S.B. Tech. Sales Corp. v. North Jersey Dist. Water Supply Comm'n., 75 N.J. 272, 289, 381 A.2d 774 (N.J. 1977) (upholding a buy-American statute against commerce clause challenge). In Reeves, Inc. v. Stake, 447 U.S. 429 (1980), the Court reserved opinion on whether the market participant exception applies to the state buy-American laws. See Reeves, 447 U.S. at 438 n.9. These measures can be differentiated from the Burma statute in that they discriminate generally, and not specifically against one country. See Spiro, supra note 59, at 840 n.165 (citing Tayyari v. New Mexico State Univ., 495 F. Supp. 1365, 1379-80 (D.N.M. 1980) ("Where all other countries collectively bear the brunt of a state law, its impact is diffused.").

179. See generally James Lawrence Kenworthy, The Constitutionality of State Buy-America Laws, 50 UMKC L. Rev. 1 (1981).

180. Spiro, supra note 59, at 837. "[I]f State action could defeat or alter our foreign policy, serious consequences might ensue. The nation as a whole would be held to answer if a state created difficulties with a foreign power . . . ." United States v. Pink, 315 U.S. 203, 232 (1942). This fear of offense has already come to fruition in the form of official complaints registered with the Massachusetts Office of International Trade and Investment (MOITI), and the United States Trade Representatives Office (USTR) in Washington D.C. See Associated Press, EU Files Complaint with WTO; Citing Law of Massachusetts, Wall St. J., June 23 1997, at B7 [hereinafter EU Complaint].

181. See Mass. Gen. Laws ch. 7, §§ 22G-M (1996).

182. See Olson, supra note 173, at 178-79.

183. See Weld Press Release, supra note 2.

184. See Olson, supra note 173, at 178-79.

185. See United States v. Curtiss-Wright Export Corp., 299 U.S. 304, 315-18 (1936).

186. See South Africa Opinion, supra note 44, at 49.

187. See U.S. Const. art. I, § 8.

188. See Curtiss-Wright, 299 U.S. at 318; see also South Africa Opinion, supra note 44.

189. See Curtiss-Wright, 299 U.S. at 315-16.

And since the states severally never possessed international powers, such powers could not have been carved from the mass of state powers but obviously were transmitted to the United States from some other source. During the colonial period, those powers were possessed exclusively by and were entirely under the control of the Crown. By the Declaration of Independence, `The Representatives of the United States of America' declared the United (not the several) Colonies to be free and independent states, and as such to have `full Power to levy War, conclude Peace, contract Alliances, establish Commerce and to do all other Acts and Things which Independent States may of right do.'Id. at 316.

190. See United States v. Pink, 315 U.S. 203, 233 (1942); see also Laurence H. Tribe, American Constitutional Law § 4-6, at 230 (2d ed. 1988) ("[S]tate action, whether or not consistent with current federal foreign policy, that distorts the allocation of responsibility to the national government for the conduct of American diplomacy, is void.").

191. Zschernig v. Miller, 389 U.S. 429, 434 (1968) (quoting Clark v. Allen, 331 U.S. 503, 517 (1943)).

192. See Spiro, supra note 59, at 832; see also The Federalist No. 80, at 235 (Alexander Hamilton) (John Stuart Mill ed., 1952). Alexander Hamilton, like Thomas Jefferson, believed that certain powers were exclusive to the federal government, and that the states should have no right to interfere with that power. See id. One of the powers that Jefferson felt should be under the exclusive control of the federal government was the power to deal with foreign sovereigns. See id. Hamilton stated that "[t]he peace of the whole ought not to be left at the disposal of a part. The Union will undoubtedly be answerable to foreign powers for the conduct of its members." Id.

193. 92 U.S. 275 (1875).

194. Id. at 277. The statute provided that the Commissioner of Immigration was to:

'[S]atisfy himself whether or not any passenger who shall arrive in the State by vessels from any foreign port or place (who is not a citizen of the United States) is lunatic, idiotic, deaf, dumb, blind, crippled, or infirm, and is not accompanied by relatives who are able and willing to support him, or is likely to become a public charge, . . . or is a convicted criminal, or a lewd or debauched woman;' and no such person shall be permitted to land from the vessel, unless the master or owner or consignee shall give a separate bond in each case, conditioned to save harmless every county, city, and town of the State against any expense incurred for the relief, support, or care of such person for two years thereafter.Id.

The Court in its analysis of this statute expressed its astonishment, stating: "It is a most extraordinary statute . . . . It is hardly possible to conceive a statute more skillfully framed, to place in the hands of a single man the power to prevent entirely vessels engaged in foreign trade . . . from carrying passengers, or to compel them to submit to systematic extortion of the grossest kind." Id. at 277-78.

195. Id. at 279. The Court questioned in the rhetorical sense "[i]f that government [the one seeking redress] should get into a difficulty which would lead to war, or to suspension of intercourse, would California alone suffer, or all the Union?" Id.

196. See Lung, 92 U.S. at 279-80.

197. Id. at 280.

198. Id.

199. Id.

200. 389 U.S. 429 (1968).

201. See id. at 430-31. The statute provided that a nonresident alien could not inherit from an Oregon decedent unless three conditions were met: (1) the alien's government must accord Americans the right to inherit on equal terms; (2) the alien's government must give Americans the right to receive payment in the United States of funds from foreign estates; and (3) foreign heirs inheriting from Oregon estates must be able to do so without confiscation by their government. See id. at 434-35.

202. Id. at 435.

203. Id. at 441.

204. See id.

205. Zschernig, 389 U.S. at 441.

206. See Mass Gen. Laws ch. 7, §§ 22G-M (1996). The statute directly comments on the legitimacy of the Burmese government and regulates in the field of foreign affairs.

207. See id.

208. See Mass. Gen. Laws ch. 7, §§ 22G-M (1996).

209. See Weld Press Release, supra note 2 and accompanying text.

210. See supra notes 193-96 and accompanying text.

211. See Michael Grunwald, State Law Sparks Trade Tiff With Japan, Boston Globe, Jan. 31, 1997, at A1, A5.

212. See Mass. Gen. Laws ch. 7, § 22J (1996).

213. See id.

214. See Omnibus Consolidated Appropriations Act of 1997, Pub. L. No. 104-208, § 570, 110 Stat. 3009, 3009-166, -167 (1996).

215. See Zschernig, 389 U.S. at 433; supra notes 200-14 and accompanying text.

216. See Lung, 92 U.S. at 280; supra notes 193-99 and accompanying text.

217. See id.; Zhernig, 389 U.S. at 433.

218. See Uruguay Round Agreements Act, Pub. L. No. 103-465, § 101, 108 Stat. 4809 (codified at 19 U.S.C.A. § 3511 (West Supp. 1998)).

219. U.S. Const. art VI, § 2.

220. See Carter & Trimble, supra note 30, at 179.

221. See id. at 165.

222. See U.S. Const. art. II, § 2, cl. 2. ("He [the President] shall have Power, by and with the advice and consent of the Senate to make Treaties . . . .").

223. See U.S. Const. art. VI, § 2.

This Constitution and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.Id. In addition to these Article II treaties and Article VI treaties, the President may conclude international agreements on behalf of the United States on the basis of congressional authorization, on the basis of his independent Constitutional authority to conduct foreign relations, or on the basis of power granted in a prior treaty. See infra note 236.

224. See K.S.B. Tech. Sales Corp. v. North Jersey Dist. Water Supply Comm'n of N.J., 381 A.2d 774, 778 (N.J. 1977).

225. See id.

226. Olson, supra note 173, at 178.

227. Ralph H. Folsom et al., International Business Transactions: A problem Oriented Casebook 307 (3d ed. 1995). This means that those countries receiving most favored nation status have the right to trade with each other on the most favorable terms available. In fact, under the World Trade Organization Government Procurement Agreement (WTO-GPA), a member state must

[p]rovide immediately and unconditionally to the products, services and suppliers of other Parties offering products or services of the Parties, treatment no less favourable [sic] than:

(a) that accorded to domestic products, services and suppliers; and

(b) that accorded to products, services and suppliers of any other Party.Uruguay Round Agreements Act, Pub. L. No. 103-465, § 101, 108 Stat. 4809 (codified at 19 U.S.C.A. § 3511 (West Supp. 1998)).

228. See Harmonized Tariff Schedule of the United States (1994), reprinted in Folsom et al., supra note 226, at 300-01. Duties (tariffs) can go from 40% to less than 5% by simply becoming a member in the GATT. See id. However, there are many obligations that go along with this membership that greatly reduce the perceived benefits. See id.

229. See id.

230. See id.

231. The Agreement on expanding the GATT Government Procurement Agreement (GPA) was reached in Geneva in December 1993 in the context of the Uruguay Round and was formally signed at the Marrakech Conference on April 15, 1994. See generally Gerard De Graaf & Matthew King, Towards a More Global Government Procurement Market: The Expansion of the GATT Government text Procurement Agreement in the Context of the Uruguay Round, 29 Int'l Law. 435 (1995). The members of the WTO-GPA are the United States, Japan, Canada, Austria, Norway, Sweden, Finland, Switzerland, South Korea, and Israel. See id.

232. See id.

233. Uruguay Round Agreements Act, Pub. L. No. 103-465, § 101, 108 Stat. 4809 (codified at 19 U.S.C.A. § 3511 (West Supp. 1998)). It is estimated that the government procurement world market is over $1,000 billion annually. It is for this reason that it has been difficult go obtain government contracts. These contracts were given on the basis of nationality, through "buy national" statutes. Id.; see also supra notes 174-84 and accompanying text for a discussion of Buy-American statutes.

234. The old Code applied only to government procurement of goods to be resold. See id.

235. Subcentral governments, for example, are individual state governments (in the United States), and Cantons or Provinces (in other countries).

236. Id. The Code applies only to purchases above specified amounts, called Special Drawing Rights (SDRs). One SDR is approximately $1.40, and purchases covered by the Code for subcentral governments are above 200,00 SDRs ($280,000) for goods and services, and five million SDRs ($7 million) for construction services. See id.

237. The Uruguay Round Agreements Act, Pub. L. No. 103-465, § 102, 108 Stat. 409 (codified at 19 U.S.C.A. § 3512 (West Supp. 1998)). The Uruguay Round Agreements Act [hereinafter the Uruguay Act] states that "[u]pon the enactment of this Act, the President shall, . . . consult with the States for the purpose of achieving conformity of States laws and practices with the Uruguay Round Agreements." Id.

238. See id. The Office of the United States Trade Representative's federal-state consultation process provides for certain procedures under which:

(i) the States will be informed on a continuing basis of matters under the Uruguay Round Agreements that directly relate to, or will potentially have a direct impact on, the States;

(ii) the States will be provided an opportunity to submit, on a continuing basis, to the Trade Representative information and advice with respect to matters referred to in clause (i); and

(iii) the Trade Representative will take into account the information and advice received from the States under clause (ii) when formulating United States positions regarding matters referred to in clause (i).Id.

239. See id. § 102(b)(2)(A)-(C).

240. Id. (emphasis added).

241. See Michael Grunwald, Mass. Law Targeting Burmese Junta Could Spark Trade War With Japan, Boston Globe, Jan. 31, 1997, at A1, A5.

242. See id.

243. See id.

244. See Michael Grunwald, Trade Tiff Widens Over State `Burma Law', Boston Globe, Feb. 1, 1997, at B1, B6.

245. See id.

246. See id. at B6.

247. See EU Complaint, supra note 180, at B7.

248. See Uruguay Round Agreements Act, Pub. L. No. 103-465, § 102, 108 Stat. 4809 (codified at 19 U.S.C.A. § 3512 (West Supp. 1998)).

249. See id. When a WTO member requests a consultation with the United States regarding the possibility of the law of a state being inconsistent with the obligations undertaken by the United States in any of the Uruguay Act agreements , the USTR shall notify the Governor of the state, and the chief legal officer of that state within seven days after receiving the complaint. See id. § 102(b)(1)(C)(i). Within 30 days the USTR shall consult with the representative of the state concerned. See id. § 102(b)(1)(C)(ii). USTR shall keep the state informed and involved in the dispute settlement stages by notifying the state of the establishment of a dispute settlement panel, and providing the state with the opportunity to advise and assist the Trade Representative in the preparation of factual information and argumentation. See id. § 102(b)(1)(C)(iii)(I-II). Finally, if the dispute settlement panel finds the law of the state inconsistent with any of the Uruguay Act agreement, the USTR shall consult with the state in an effort to develop a "mutually agreeable" response to the report, and involve the state in the development of the United States position regarding the response. Id. § 102(b)(1)(C)(iv).

250. See Grunwald, supra note 244, at B1, B6.

251. See id.

252. Uruguay Round Agreements Act, Pub. L. No. 103-465, § 101, 108 Stat. 4809 (codified at 19 U.S.C.A. § 3511 (West Supp. 1998)).

253. See Mass. Gen. Laws ch. 7, §§ 22G-M (1996).

254. Uruguay Round Agreements Act, Pub. L. No. 103-465, § 101, 108 Stat. 4809 (codified at 19 U.S.C.A. § 3511 (West Supp. 1998)). The WTO-GPA defines offsets as: "measures used to encourage local development or improve the balance-of-payments accounts by means of domestic content, licensing of technology, investment requirements, counter-trade or similar requirements." Id.

255. See supra notes 174-84 and accompanying text.

256. See Mass. Gen. Laws ch. 7, §§ 22G-M (1996).

257. See Uruguay Round Agreements Act, Pub. L. No. 103-465, § 101, 108 Stat. 4809 (codified at 19 U.S.C.A. § 3511 (West Supp. 1998)).

258. See id.

259. See Grunwald, supra note 244, at B1, B6.

260. See Part III.A-D.

261. See Part III.A.

262. See Part III.A.

263. See Part III.A.

264. See Part III.D.

265. See Part III.B.

266. See Part III.B.

267. See Part III.B.

268. See Part III.B.

* For Goran.