Regardless of whether or not you agree that divestment campaigns against Iran is a good idea, chalk up H.R. 2347 as a solid precedent for state democracy and policy-space to promote fair trade. The bill, which passed in the House Finance Committee this week, would allow states to pass legislation requiring the divestment of state dollars from companies that invest in Iran. A similar bill, H.R. 180, focuses on Sudan and is also moving through the House. From Inside U.S. Trade (sorry, not linkable):
Sherman (sponsor of the bill) says: if H.R. 2347 passed Congress and the administration signed it into law, “it would be very hard, I think, for the courts to say that a state doing something authorized by the elected branches of the federal government, in furtherance of its policy and at its request, is somehow at odds with American policy.”
You may recall the successful anti-apartheid divestment campaign aimed at South Africa in the 1980s. A similar effort was launched in the 1990s by states and cities against the oppressive Burmese military regime, and in recent years states have again been passing laws to oppose genocide in Sudan.
(Not so) shockingly, these important state efforts have come under fire by corporate interests seeking to dismantle any perceived barriers that could limit their one objective - making higher profits. The National Foreign Trade Council (NFTC) took Massachusetts and Illinois to court to get those laws repealed, while internationally the EU and Japan challenged Massachusetts' Burma law under the WTO's procurement agreement. State lawmakers are used to being preempted by the federal government but they were flummoxed when they found out that the WTO also gets to tell states what they can or can't do with their taxpayer dollars. Nice to know Congress is looking to side with states on this one.