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.
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.
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).
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.
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.
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.
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.