“At a time when the United States and our key allies are engaged in multilateral diplomatic efforts to encourage the Iranian regime to be forthcoming about its nuclear ambitions, the passage of this bill is problematic,” said USA*Engage Director Richard Sawaya. “While we understand that the legislation is a reflection of policymakers’ desire to ‘do something’ with respect to Iran, it undermines the federal government’s ability to conduct foreign policy by granting all 50 states and countless municipalities the right to levy what amount to economic sanctions against Iran.”
NFTC President and USA*Engage Co-Chair Bill Reinsch said, “From a macro perspective, this bill complicates U.S. policy toward Iran, as it calls into question our commitment to the ongoing diplomatic talks. As tempting as it may be for Congress to approve bills aimed at crippling Iran’s energy sector, the reality is two-fold: one, unilateral sanctions are by definition ineffective, and two, this kind of legislation sets a bad precedent. Today the legislation is aimed at Iran, but what happens when a given state decides it should no longer have business ties with another country? It’s a slippery slope.”
In August 2006, the NFTC and eight boards of Illinois public employee pension funds brought suit (NFTC v. Giannoulias) against Illinois over the state’s Act to End Atrocities and Terrorism in Sudan, challenging the constitutionality of the Illinois Act. In February 2007, Judge Matthew Kennelly of the Federal District Court for the Northern District of Illinois ruled that the state’s law was “unconstitutional because the Act [violated] federal constitutional provisions that preclude the states from taking actions that interfere with the federal government’s authority over foreign affairs and commerce with foreign countries.”
The NFTC lawsuit followed the precedent set in the U.S. Supreme Court’s 2000 decision in Crosby v. NFTC, in which the Court struck down sanctions enacted by Massachusetts on Burma. In that decision the Court ruled that if the federal government has enacted sanctions on a country, state and local governments are preempted from imposing sanctions of their own.
USA*Engage (www.usaengage.org) is a coalition of small and large businesses, agriculture groups and trade associations working to seek alternatives to the proliferation of unilateral U.S. foreign policy sanctions and to promote the benefits of U.S. engagement abroad. Established in 1997 and organized under the National Foreign Trade Council (www.nftc.org), USA*Engage leads a campaign to inform policy-makers, opinion-leaders, and the public about the counterproductive nature of unilateral sanctions, the importance of exports and overseas investment for American competitiveness and jobs, and the role of American companies in promoting human rights and democracy world wide.
About the NFTC
The National Foreign Trade Council (www.nftc.org) is a leading business organization advocating an open, rules-based global trading system. Founded in 1914 by a broad-based group of American companies, the NFTC now serves hundreds of member companies through its offices in Washington and New York.