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The National Foreign Trade Council (NFTC), a nonprofit trade and industry group based in Washington DC, won a court battle against the state of...
The National Foreign Trade Council (NFTC), a nonprofit trade and industry group based in Washington DC, won a court battle against the state of Massachusetts. In a unanimous decision the U.S. Supreme Court sided with the NFTC and struck down a Massachusetts law that was designed to deny state contracts to any company doing business in Myanmar. The Court ruled that the Massachusetts law intruded on the federal government's authority and was preempted by federal law regarding Myanmar. In fact, the U.S. Constitution states that "foreign policy is exclusively reserved for the federal government." The NFTC says that it shares concern over human rights abuses in Myanmar but believes that a coordinated, multinational effort would be most effective at instilling change.
a) Do you think that companies should be penalized domestically based on where they do business abroad? Explain.
b) Do you foresee potential problems when the WTO gets involved in such political matters?
c) How might domestic firms react if each state were to punish firms based on its own foreign policy ideals?
