Why some states speak out on transatlantic trade issues and others don't

There is variation in how U.S. states approach interest representation on the Transatlantic Trade and Investment Partnership (TTIP) and the major fault line appears between states focusing on transatlantic trade promotion and states focusing on transatlantic trade policy. By grouping my study into trade promotion and trade policy interest representation on the TTIP, I meant to expose different means, actors and motivations for state engagement. But there is another distinction to be made.

My study revealed two separate clusters of states actively engaged on the TTIP: One is a small group of state officials putting the TTIP in the context of potential economic benefits for their state. Another is a small group of state officials critical of the TTIP regarding state sovereignty issues. There is little overlap between these groups, which begs not only the question why some states become active in transatlantic trade interest representation but also why they become active in a specific field.

I argue that the variance among states occurs due to the combination of three factors (see figure below): State economic structures, ideological preferences within a state and state officials’ individual, personal backgrounds. The qualitative empirical research in my study show that trade promotion issues are pushed by the state executives in states with advanced economic development strategies focused on agricultural exports, with a conservative pedigree and a governor emphasizing job creation and economic growth. Meanwhile, trade policy issues are championed by state legislatures in states with dedicated trade policy commissions instituted during previous trade negotiations, with a progressive base and state legislators personally interested in international trade topics.

State economic structures shape TTIP interest representation

States relying heavily on international exports of agricultural goods tend to publicly speak out in support of the TTIP, as more open EU markets would facilitate their trade promotion efforts. The prime example of interest representation in this field is a joint letter to the federal government on the TTIP in 2013, in which 14 governors, mostly from agricultural states, touted the economic benefits of the proposed deal. Agriculturally dominated state economies are especially reliant on exports if they achieve overproduction that cannot be consumed – or easily stored – domestically, so producers and politicians in such states typically push for open markets with low tariffs. One respondent said regarding agricultural trade: “[I]f we’re not growing our export markets, I mean, we’re dying as a state then.” Trade deals can therefore be a “lifeline”1Behsudi, Adam. (2017, August 7). Trump’s Trade Pullout Roils Rural America. Politico. Retrieved August 7, 2017, from http://www.politico.com/magazine/story/2017/08/07/trump-tpp-deal-withdrawaltrade-effects-215459. for agricultural states, not only by lowering tariffs but also by addressing nontariff barriers: Agricultural exports are subject to many international trade rules such as the World Trade Organization’s Agreement on the Application of Sanitary and Phytosanitary Measures, raising exporting states’ interest in opening markets and having a common regulatory framework. The EU has additional strict rules following the precautionary principle to consumer risk management and stemming from European reservations against, for instance, genetically modified organisms (GMOs) and hormone-treated beef. In-state exporters could profit from gaining access to the EU if a joint approach to risk evaluations was found. One of the biggest farm organizations in the U.S., in fact, called for the TTIP to change EU policies on biotechnology and geographical indications.2American Farm Bureau Federation. (2017, May). U.S.-EU Transatlantic Trade and Investment Partnership Agreement. Retrieved August 9, 2017, from https://www.fb.org/files/Trade-TTIP-May_2017.pdf.

Economy, ideology, personality: These three interconnected factors explain variation in states’ interest representation.

The private sector pushing for their trade promotional interests is another important facet of states’ economic structures. The state executive is closely in touch with state businesses and business associations, which bring in expertise and might stress trade promotion topics in international negotiations. These connections are indicated by governors traveling abroad with business representatives (see the post on states’ European trade offices) or establishing public-private partnership to foster economic development. For instance, Florida was the first state to create a public-private partnership solely dedicated to economic development, including international export promotion and foreign direct investment (FDI) attraction. This organization, situated within the state executive, has trade representative offices in 13 countries all over the world, five of which are in the EU.

Like Florida, most of the 14 states from the 2013 letter have substantial economic development agencies, for example Indiana, Iowa, Nebraska, Pennsylvania and Utah. Six of the signatory states have offices in the EU (Arkansas, Florida, Indiana, Iowa, Pennsylvania and Utah). States that historically view international trade as a necessity to achieve economic growth tend to build up well-staffed economic development agencies and create trade promotion strategies, for example focusing on specific industries or specific regions of the world. When such economic development institutions exist, in turn, knowledge and resources on trade promotional topics are available to connect ongoing trade negotiations to a state’s international export efforts. The case of Nebraska highlights how economic priorities shape states’ international trade endeavors. As one respondent put it, “Nebraska probably has had a three-decade tradition of wanting to be engaged in the world market place and promoting trade because [the state is] such a large agricultural producer.” Based on this, the state developed an economic development strategy strongly focused on agricultural exports and has governmental agencies and officials in place emphasizing international connections.

Yet, the economy is not an explanatory factor by itself. If that were the case, all traditional exporting states, especially those with large agricultural sectors, would make their voices heard to support transatlantic trade promotion via the TTIP. But they do not: California has the biggest economy in the U.S., including the largest agricultural sector3U.S. Department of Agriculture. (2017, February 7). Cash receipts by commodity, state ranking, 2015, Nominal (current dollars). Retrieved June 28, 2017, from https://data.ers.usda.gov/reports.aspx?ID=17844., and has sizable trade and investment ties to the EU (see the posts on trade and FDI statistics), but its state officials have barely spoken out on the TTIP. Of the ten biggest agricultural states in the U.S., four signed the gubernatorial letter mentioned above. Of the remaining six, even in those states with strong economic development agencies such as Illinois, North Carolina or Texas, trade promotion interest representation on the TTIP could not be detected. Connecticut, Delaware and Massachusetts rank highest in exports to the EU, yet do not stand out in interest representation on transatlantic trade promotion.
In sum, agricultural states with advanced economic development strategies seem to be keen on opening the EU market and thus urge the federal government to support the TTIP. They expect their economic development strategies, which include trade promotion efforts, to benefit from the trade deal. Still, just because a state is a large agricultural exporter does not mean that it will speak out on the TTIP for trade promotion purposes. I argue that ideology and state officials’ personality also need to be taken into account.

Explanatory factors for variation in states' TTIP interest representation

How states' ideological preferences play a role in determining TTIP interest representation

To generalize from my findings, those states supporting the TTIP based on state trade promotion interests tend to be conservative, whereas those states criticizing parts of the proposed deal on state sovereignty grounds tend to be progressive. The traditional division between conservative free traders and progressive free trade critics seems to hold in the case of the TTIP, which is noteworthy because the partisan preferences have shifted considerably in recent years. While surveys show that Democrats support the TTIP more so than Republicans, both parties today have large factions that oppose free trade agreements, albeit for different reasons. Therefore, I refrain from introducing party politics as an explanatory factor and instead examine the ideological leanings of a state.

The most prominent examples of progressive-leaning states criticizing the TTIP are Maine, Vermont and Washington. Maine is a fitting case to show why looking at party politics alone obscures the analysis: The state has had a Republican governor for the entirety of the TTIP negotiations and a Republican-controlled state Senate for most of the time. But the states’ voters and legislators lean left. For instance, the partisan voting index in Maine is D+5 (see map below; Vermont and Washington have indices of D+16 and D+5, respectively).

Furthermore, a well-developed progressive civil society exists in Maine that has been pushing economic and social issues in the state. This progressive attitude shapes the state’s interest representation more so than the Republican-led executive does, as Maine has been outspoken on procurement issues, the investor-state dispute settlement (ISDS) mechanism and environmental and health regulations, which are not typically pushed by conservatives.

There is an institutional angle to these three states’ progressive leanings as well: Maine, Vermont and Washington are the only states with active trade policy commissions  (see the post on trade policy commissions), disregarding Utah’s International Trade Commission due its lack of activity on the TTIP. Because of these institutions in place, state legislators have acquired expertise on international trade policy and on the intergovernmental mechanisms in the U.S. offering them opportunities to represent their trade policy interests. Moreover, the commissions offer an opportunity for interstate cooperation, as the Northeastern commissions demonstrate: Since the inception of the trade policy commissions in Maine and Vermont, there have been exchanges to formulate joint positions. This was also the case for the TTIP talks, when state legislators from the Northeast organized meetings with European legislators.

Around 17 percent of respondents named the trade policy commissions as one way to become engaged in transatlantic trade relations. State legislatures founded trade policy commissions long before the TTIP in the wake of previous trade agreements that some legislators, constituents and civil society organizations perceived to threaten state sovereignty and to entail negative economic effects. On past and current trade negotiations, many state legislators were shaped by listening to constituents linking global free trade to some of the economic hardships they had to endure on the local level. This was on display, for instance, in the public hearing of the Maine Citizen Trade Policy Commission I attended.

In contrast, the examples from exporting agricultural states show conservative state executives taking a markedly different historic perspective: Especially through their economic development agencies, they are often in touch with businesses from their state, which rely on exports for economic stability and growth. Because of this, conservative state officials tend to view the TTIP as a potential engine for job creation. The gubernatorial letter, for instance, supporting the trade deal for trade promotion reasons was signed by twelve Republican and only two Democratic governors. Without mentioning the trade policies that progressives tend to put front and center, the conservative state leaders focused on job creation and export growth, which are of high importance to their constituents. Clearly, state governors and legislators know their voting base and the preferences of their citizens and businesses and try to work on their behalf.
However, the ideological preferences in the states cannot be taken as the single explanatory factor for their interest representation. If that were the case, many more conservative states should promote the TTIP on trade promotional grounds and many more progressive states should represent their trade policy interests. This is not the case, as staunchly conservative states such as Alabama, Texas or Wyoming were not found to engage in transatlantic trade promotional interest representation on the trade deal. Similarly, progressive states such as Colorado, Minnesota or New York have not openly addressed regulatory questions in the TTIP, even though they could expect voters to be supportive of such talking points. In fact, environmentalist California passed a resolution on the TTIP not mentioning regulatory issues at all. And even in those progressive states that do have trade policy commissions and thus focus on international trade deals, there are different levels of activity.
Overall, the empirical evidence provided in this study shows that progressive states with active trade policy commissions tend to represent their interests on the TTIP by arguing on state sovereignty grounds. Concerned about possible deregulation, progressive state legislators address the federal government to ensure continued state regulatory authority in the proposed trade deal. Conservatives, in contrast, tend to favor the TTIP based on trade promotion considerations. But ideology in a state is only a part of the explanation for the variety of state interest representation on the TTIP. Another explanatory factor is officials’ personal motivation and background, which together with economic and ideological considerations illuminates states’ reasons to engage in the TTIP.

State officials’ personal backgrounds are important to consider

Looking solely at state-level economic or ideological structures ignores individual-level motivations and therefore does not suffice in explaining states’ transatlantic trade interest representation. So far, I have argued that economic structures and ideological preferences lead state officials to speak out on the TTIP either because they want to ensure positive economic benefits for their state or because they want to ensure continued regulatory authority over state issues. In theory, these two priorities are not mutually exclusive: All states are keen on maintaining state sovereignty and creating jobs. Yet, there are few overlaps between states focused on trade promotion and states focused on trade policy, and the emphasis placed on either one of these issues shows crucial divides. One divide already discussed is between agricultural-minded economic development topics and state sovereignty topics. Another fault line is the ideological division between conservatives and progressives. On top of that, these breaks might be acerbated by the rift between state executive officials, who take a view to the state economy as a whole and are keen on marketing the state, and state legislators, who are responsible for law-making in the state and tend to take a narrower view based on their districts. Underlying all of these macro-level views of economic, ideological and institutional structures, however, is state officials’ own personal background and interests.

Got questions or feedback?

If you have comments or questions, please feel free to get in touch via e-mail at research@transatlanticties.com (PGP-Key).

More than a quarter of interviewees acknowledged that state officials’ individual enthusiasm drives their engagement on trade promotion or trade policy issues. I argue that this number does not do justice to the importance of officials’ intrinsic motivation to speak out on international trade topics: It is not their political mandate, the volume of states’ transatlantic exports or voters’ preferences alone that pushes state officials to write letters and engage with Congress but rather their personal priorities in their jobs. This finding is in line with previous research on the importance of personal leadership in states’ foreign affairs.4Conlan, Timothy J. & Michelle A. Sager. (2001). The growing international activities of the American states. Policy Studies Review, 18(3), 13. Here: p. 24; McMillan, Samuel Lucas. (2008). Subnational Foreign Policy Actors: How and Why Governors Participate in U.S. Foreign Policy. Foreign Policy Analysis, 4(3), 227-253. Here: pp. 242-244.
The gubernatorial letter, for example, was initiated by Iowa Governor Branstad, who has made economic development a focal point of his administration, and it was signed by a variety of state governors with long-standing engagement in Europe, evidenced by having trade offices in the EU or traveling there on trade missions. On trade agreements, Governor Branstad states that “[t]rade helps drive economic growth through high-paying jobs for American workers and increased opportunities for American businesses and agricultural producers”5Branstad, Terry E. (2013, December 23). Gov. Branstad co-writes letter to Washington leaders; urges President Obama and Congress to clear path for trade and investment. Retrieved April 27, 2016, from https://governor.iowa.gov/2013/12/gov-branstad-cowrites-letter-to-washington-leaders-urges-president-obama-and-congress-to. and Iowa’s lieutenant governor is quoted as saying that “Governor Branstad and I understand the importance of these trade agreements to Iowa businesses.”6Branstad, Terry E. (2013, December 23). Gov. Branstad co-writes letter to Washington leaders; urges President Obama and Congress to clear path for trade and investment. Retrieved April 27, 2016, from https://governor.iowa.gov/2013/12/gov-branstad-cowrites-letter-to-washington-leaders-urges-president-obama-and-congress-to. This personal conviction has to be seen as a primary motivation for the governor to urge the federal government to break down trade barriers.

In the same state whose governor so strongly emphasizes agricultural exports and open overseas markets, there is also room for committed state legislators to engage on trade policy issues: Iowa State Representative Charles Isenhart has repeatedly stressed TTIP issues related to investor rights and environmental regulations.7Garbe, William. (2015, November 12). U.S.-EU trade talks trouble Isenhart. Telegraph Herald, p. A3; Isenhart, Charles. (2015, May 14). Do trade deals hide threats to state laws? The Des Moines Register. Retrieved September 22, 2016, from http://www.desmoinesregister.com/story/opinion/abetteriowa/2015/05/14/tradedeals-hide-threats-state-laws/27346629/. Considering the state executive’s dominant focus on economic development and in the absence of a trade policy commission in Iowa, this speaks to Isenhart’s personal motivation to engage in international trade topics. As another example, the National Council of Environmental Legislator’s (NCEL) meeting with members of the European Parliament was organized by legislators from states with an active progressive civil society and with personal ties to U.S. and European nongovernmental organizations. Many interviews revealed state officials’ passion for international trade topics that was rooted in personal experiences as or with citizen activists. One respondent spoke of the conviction that serves as motivation for engaging on international trade matters:

Regulations shouldn’t be designed to protect trade if their primary purpose is protecting public health and the environment. It should be the other way around (…): Trade should support those rules and regulations that we’ve adopted (…) in our democratic process.

Such individual, personal motivations are a key driver for involvement in international trade policy issues.

When considering state officials’ personal backgrounds, it becomes clear that quantitative measures can only be a snapshot of a state and are, by themselves, not convincing explanatory factors: Maine’s interests are represented towards the U.S. Trade Representative and even European legislators not because 23 percent of its exports in 2015 went to the EU (rank 13 in the U.S.) or because it boasted 388 global affiliates with assets bigger than $20 million (rank 36 in the U.S.). Maine’s interests are represented because, in line with the progressive leanings in the state, one state legislator has decided to work in the field of trade policy and identify potential effects of the TTIP for Maine. Similarly, the Nebraska executive does not represent its TTIP interests because it happens to have large agricultural exporting businesses but because the administration has placed a deliberate, strategic emphasis on marketing Nebraska agricultural products globally and engaging foreign actors on all policies relating to these products.

In sum, individuals’ personal backgrounds and motivations are key drivers for why some states represent their interests on the TTIP and others do not. These personal motivations are likely shaped by ideological and economic considerations and are likely influenced by outside private actors, such as business associations or environmental activists, which speaks to the interconnected nature of the explanatory factors. But the argument developed in this study is that an individual’s determination to connect the TTIP to their state, either on trade promotion or trade policy, is important in forming that state’s interest representation. The latter topic, surrounding the TTIP’s potential effects on state regulatory authority and U.S. federalism, has evoked strong reactions among some state officials and state associations and they were also found to be the major sources of state-federal friction.