This ruling was narrow and did not address questions as to whether the Massachusetts procurement policy was in conflict with federal foreign affairs power or presented an inappropriate burden on foreign commerce. We were disturbed to learn, however, that the United States urged the Court to rule against Massachusetts on these broader grounds. We thus want to state in the strongest possible terms that the rights of elected state and local officials to decide how to spend and invest the public's money when acting as market participants must be preserved. California has enacted numerous purchasing preference laws including, but not limited to, a ban on the purchase of goods made with forced labor, a purchasing preference for recycled paper, and selective purchasing laws that favor disabled veterans. We wish to keep such laws intact as they were established through democratic processes and reflect the values of the citizens we represent.
Foreign investor claims.
The American standards of compensation for tort, contract and taking claims have evolved over centuries and serve important public purposes. We do not wish to see these standards disrupted by international investor rights created by trade negotiators who may not have fully comprehended the potential implications of open-ended language. We also have concerns about the potential for challenges to California taxation of multinational corporations. Under this approach, a corporation is taxed in a manner that reflects the share of its business in California. Even though the United States Supreme Court has approved this method of taxation, and even though California has recently modified its approach in response to concerns raised by the European Union and the Clinton Administration, other nations continue to assert that it is a trade barrier and thus may bring a WTO challenge.