The controversial law, which is intended to promote democracy and human rights reform in Burma, requires the state to discriminate against companies seeking state procurement contracts if those companies do business in Burma. Any bids submitted by blacklisted firms have a 10 percent premium added and are then automatically rejected if they aren’t the lowest.
Despite its good intentions, the law is problematic on at least two counts: first, it’s unconstitutional, and second, it’s a poor way to promote freedom in Burma. Although the Federal District Court in Boston dealt only with the constitutional question, the strategic policy reasons for condemning the law are equally compelling.
In his decision, Chief Judge Joseph Tauro said that the Massachusetts law impinges on exclusive federal foreign policy powers and is thus unconstitutional. Indeed, that is true of state and local sanctions in general. In the balance struck between state and federal power by the Constitution, foreign affairs are clearly a federal prerogative. The Supreme Court has been adamant on the point: “The federal government representing as it does the collective interest of the states, is entrusted with full and exclusive responsibility for the conduct of affairs with foreign sovereignties.”
There are no exemptions or loopholes that would allow a state or city to legislate a secondary economic boycott — which such local laws are — with the specific objective of punishing or toppling a foreign government. “The Massachusetts Burma Law was designed with the purpose of changing Burma’s domestic policy,” Judge Tauro correctly noted. “State interests, no matter how noble, do not trump the federal government’s exclusive foreign affairs power.”
Judge Tauro’s reasoning tracks closely the analysis by legal scholars David Schmahmann and James Finch in a Cato Institute paper published this summer. Although the court rejected the Massachusetts law solely because of its infringement on foreign policy powers, Schmahmann and Finch identified further reasons to question the constitutional validity of sub‐federal sanctions.