Judiciary Power and Practice - Federalism and foreign policy



It is widely believed that the Constitution's framers sought to place control of the new country's foreign relations in the hands of the federal government rather than the states. To ensure that the country spoke with one voice in international matters, the Constitution granted the federal courts power to hear all cases between a state or its citizens and a foreign state or its citizens, and all cases involving ambassadors, public ministers, or consuls. To the framers of the Constitution, foreign policy was first and foremost the arena for waging war and making treaties. However, they also understood that the federal government must have power over some economic issues like setting tariffs and duties and issuing currency, all of which affect international trade and investment. Article 1, Section 10 of the Constitution lists the activities that states are prohibited from doing, most of which are related to foreign policy. However, the Tenth Amendment reserves powers not delegated to the federal government, or prohibited by the Constitution to the states, to the states or to the people.

The ambiguity of this notion of "dual federalism" has been a source of confusion from the start. The role of states in foreign policy was one of the first controversies addressed by the Court in the years following the writing of the Constitution. In Penhallow v. Doane (1795) and Ware v. Hylton (1796), the Supreme Court denied to the states any role in foreign policy matters, ruling that treaty-making power was not affected by the doctrine of dual federalism. It helped to minimize disputes in this area because, for most of the country's history, it was easy to distinguish between domestic and foreign matters. In the later years of the twentieth century, however, the lines blurred. This was particularly true in international economic matters. States and cities routinely sent trade missions abroad to help local firms export and to encourage foreign companies to invest locally. Local government forays into foreign policy accelerated in the 1980s. Many localities enacted boycott legislation to pressure South Africa to end apartheid. Others passed resolutions criticizing nuclear weapons, supporting a freeze in the arms race, and banning nuclear testing. Some formed linkages with Nicaragua and, along with grassroots organizations, provided more humanitarian aid to the Nicaraguan people than all the military aid Congress authorized for the contras, the anticommunist forces supported by the Reagan administration. Still others welcomed Guatemalan and Salvadoran refugees, established "sister city" relationships with communities in other countries (including the Soviet Union), and passed ordinances phasing out ozone-depleting chemicals.

Opponents of local government involvement in foreign policy proposed three arguments. The first was that U.S. foreign policy is most effective when the country speaks with one voice. The second was that foreign affairs, like all public policies, should be shaped democratically by all who would be affected. It would be unfair for some states and cities to make decisions that affect the entire country. The third proposition was that only the federal government has the expertise to make foreign policy. The president, through the National Security Council, Central Intelligence Agency, Departments of State and Defense, and other executive branch organizations, has far more resources and information (much of it secret or sensitive) than governors and mayors. These arguments were countered by the fact that U.S. foreign policy is rarely of one voice. Members of Congress, different departments within the executive branch, multinational corporations, and special interest groups have all expressed views at odds with the president or State Department. In addition, local government foreign policies may be viewed as an extension of the democratic process, since local governments concerned about an international issue can develop policies specific to their citizens' needs, as well as accountability, since there is no national security apparatus for local officials to hide behind. Finally, while the federal government may have access to more information in traditional foreign policy areas (like war and security), local governments are perhaps more knowledgeable in economic policy and have more tools at their disposal (such as tax and other incentives to attract foreign direct investment).

There have been few cases challenging local government foreign policies, and the Constitution helps to explain why. Under the Articles of Confederation, the states engaged in trade wars, pursued their own military campaigns, and carried out independent diplomacy. The Constitution's framers sought to correct this. First, it is broadly understood that the framers sought to place foreign policy firmly at the national level. Second, the Constitution clearly prohibits states from some foreign activities, including making treaties or engaging in war. Third, Article 6 of the Constitution provides that laws and treaties of the United States are "the supreme law of the land" and prevail (or preempt) state law. Fourth, states may not levy taxes or duties on imports or exports, or enact regulations that unduly inhibit interstate or foreign commerce. Consequently, until the late twentieth century there were relatively few foreign policies enacted by local government, and only a handful that posed a serious threat to the ability of the United States to speak with one voice in international relations.

An alternative reading of the Constitution suggests that the framers could have taken all foreign policy activities away from state and local governments but chose not to do so. Instead, they enumerated a small number of limitations on state power. In those instances when local government has become involved in foreign policy, the executive and legislative branches usually have done little to discourage such activity. During the Reagan administration, conservatives in the Justice Department were reluctant to file suit against municipal foreign policies because of their support for the principle of states' rights. Thus, local government foreign policies bring two constitutional principles, states' rights and a national-level foreign policy, into conflict.

Many of the local government activities of the 1980s and 1990s do not fall neatly into constitutional categories (like war, treaties, and duties). For example, the Comprehensive Anti-Apartheid Act of 1986 made it clear that state and local divestment and antiapartheid legislation could remain in effect. In such cases, the judiciary resorted to other interpretations. In Zschernig v. Miller (1968), the Supreme Court ruled against Oregon. That state's government had enacted a law requiring reciprocal treatment of property inherited by a resident alien in Oregon and in the alien's home country. The Court announced that it would now strike down any municipal foreign policies having more than "some incidental or indirect effect" on U.S. foreign relations. The fact that such an effect could vary in importance over time creates an opening for the judiciary to increase its influence in foreign policy matters.

One increasingly popular type of nontraditional foreign policy of local governments is economic sanctions. In 1996, Massachusetts passed a law that made it more difficult for companies with investments in Burma (Myanmar) to receive state procurement contracts. This "selective purchasing" law applied to U.S. and foreign companies and was challenged at two levels. The European Union and several Asian countries asked the World Trade Organization (WTO) to determine whether the "Burma law" violated international trade rules. They felt that the law was yet another example of U.S. "extraterritoriality," that is, applying laws originating within the United States on parties operating beyond the country's borders. However, the claimants agreed to let the U.S. courts decide on the case before pressing for a WTO ruling. A group of companies formed the National Foreign Trade Council (NFTC) and challenged the law within the federal court system in 1998 in National Foreign Trade Council v. Baker. The NFTC's argument rested on three points. The first was that the Constitution gives only the federal government the right to make foreign policy. The second was that the Massachusetts law violated the Constitution's commerce clause, which gives Congress exclusive powers over interstate commerce. The third was that a federal law prohibiting new investment by U.S. companies in Burma, but passed a few months after the Massachusetts law, preempted the state law.

Massachusetts supported its position with several arguments. First, the Constitution explicitly lists the activities in which states may not engage, but economic sanctions is not one of them. Second, because the Massachusetts law did not establish direct contact between the state and Burma, it was not a foreign policy question. Third, important state interests embodied in the First (freedom of speech) and Tenth Amendments to the Constitution permitted the law. Finally, since the foreign affairs doctrine is vague, the courts should leave to the legislative branch the issue of whether to invalidate the Massachusetts Burma law.

The fuzzy area of the constitutionality of state actions in the international realm was underlined by the ways in which federal courts ruled as this case made its way through the judicial system. A federal judge ruled that the Massachusetts law "unconstitutionally impinges on the federal government's exclusive authority to regulate foreign affairs," since the objective of the legislation was to change Myanmar's domestic politics (specifically, to force the military junta to recognize the results of a 1990 election). The appeals court's 1999 ruling was much more sweeping, as it found the Burma law unconstitutional on all three grounds presented by the NFTC. The Supreme Court agreed to hear the case ( Crosby v. National Foreign Trade Council, 2000) and ruled against Massachusetts—but for yet a different reason. The Clinton administration avoided taking sides in this dispute, but revealed its support for the NFTC during the Supreme Court hearing. In a unanimous ruling, the Supreme Court concluded that the federal statute banning investment in Burma (enacted shortly after the Massachusetts law) preempted the Massachusetts law on procurement. In other words, the law passed by Congress prevented states from having their own sanctions laws aimed at Burma. The Court has taken a similar approach in other cases, whereby it has nullified a state or local foreign policy because it contradicted a specific federal statute, treaty, executive agreement, or constitutional clause.

Unfortunately, the narrow ruling in the Massachusetts case left the door open for other state and local government actions in the foreign policy area. For example, it was not clear whether a state sanctions law is constitutional when no national law exists aimed at the same country. Nor did the ruling prohibit other measures, such as divestment by state pension funds of stock held in firms doing business in undesirable places. Most importantly, this case presented the courts with the opportunity to clearly demarcate the limits of states' actions in the foreign realm, but the Supreme Court was unwilling to make such a bold statement.

The conflicting constitutional principles that thus arose were difficult to resolve. One solution to controversies of this type was for the courts to treat local government involvement in foreign policy in the same way that they usually treat disputes over war powers. By holding that these are political questions, the courts could leave it to the legislative and executive branches to create laws permitting or barring various activities. For example, if Congress did not want states like Massachusetts enacting selective purchasing laws, it could pass a law prohibiting them from doing so. In this line of thinking, the courts should uphold all local government foreign policies, unless such activities are specifically barred by national legislation or the Constitution.



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