What dedicated state commissions can do in transatlantic trade policy​

An institutionalized way for states to analyze and influence trade agreements is to set up dedicated commissions to deal with this issue. Only a very small number of states has done so: Maine, Massachusetts (not active), New Hampshire (terminated), Utah, Vermont and Washington. What do these commissions do and what can they accomplish on the Transatlantic Trade and Investment Partnership (TTIP)?

Only four states – Maine, Utah, Vermont and Washington – have legislative bodies explicitly designed to work on international trade topics that are also active. The Massachusetts trade commission was introduced by law but never sprang into action. A respondent familiar with the situation attributed this to the gubernatorial failure to nominate any staff for the commission. In New Hampshire, a trade policy commission was in existence until 2011.

Different membership structures among trade policy commissions

A look at the membership of the commissions reveals two groupings: In Utah and Washington, the commissions dealing with trade policy are made up solely of state representatives, state senators and state executive officials. In Maine and Vermont, there are additional members representing state business, environmental or labor groups. The commissions work in similar fashions but have different names:

  • Maine: Citizen Trade Policy Commission
  • Utah: International Relations and Trade Commission
  • Vermont: Commission on International Trade and State Sovereignty
  • Washington: Joint Legislative Oversight Committee on Trade Policy

As the names suggest, these are bodies designed to primarily deal with trade policy, not trade promotion. In reality, this might not always be the case, but the respective bodies were created by statute with the tasks to monitor and track international trade policy with a particular view to examine the potential effects on the respective states. The commissions’ mandates translate to public hearings, state resolutions and letters on international trade policy. At times, the commissions work together amongst each other or with the Intergovernmental Policy Advisory Committee (read more on the IGPAC in this post).

Complex trade issues with effects on states addressed in report

The commission in Maine has been highly engaged in transatlantic trade policy interest representation and specifically on the TTIP. It has fostered research on the TTIP, held a public hearing on the proposed agreement, testified at stakeholder events by the U.S. Trade Representative (USTR) and sent multiple letters to the USTR.

The commission focuses on the effects that trade agreements might have on the regulatory powers of the state and only tangentially considers economic effects on the state. In Maine, the three most prominent issues brought up regarding the TTIP are the investor-state dispute settlement (ISDS) mechanism, public procurement and regulatory cooperation.

On the ISDS system, the Maine Citizen Trade Policy Commission has repeatedly represented state interests directly at the federal government. It urged the USTR in a 2014 letter to have an open public consultation on the ISDS mechanism because of its flaws in the TTIP: The commission holds that ISDS panels are not democratically selected, do not take into account the public interest when judging on investors’ rights and are costly for U.S. taxpayers. These concerns were repeated in a letter to the Ways and Means Committee of the U.S. House of Representatives, which is the committee responsible for international trade negotiations.

Every two years, the commission in Maine has a report prepared by outside researchers that analyzes a particular international trade policy issue from the state’s perspective. In 2014, the study was conducted on the TTIP, titled “Maine Agriculture and Food Systems in the Transatlantic Trade and Investment Partnership” and written by Karen Hansen-Kuhn of the Institute for Agriculture and Trade Policy and John Piotti of the Maine Farmland Trust. This study, too, warned of the dangers of the ISDS mechanism and emphasized the topics of public procurement, geographical indications and regulatory cooperation in food safety and labeling for genetically modified organisms (GMO).

The 2014 report thus addresses complex and highly technical policy issues related to the TTIP’s regulatory effects specific to Maine that are not directly related to trade promotional topics. The Maine Citizen Trade Policy Commission’s push for such a detailed assessment and its later engagement with federal-level actors shows the involvement of the commission in transatlantic trade policy. State legislators got informed about the TTIP and in turn represented special interests at the USTR as the federal institution responsible for trade negotiations.

Direct contacts between state and EU politicians

Apart from letters and reports, there have been isolated instances in which members of the European Parliament (MEPs) or national-level European legislators visit a U.S. state with the express purpose of discussing the TTIP with state legislators. One such meeting took place in May 2014, when German parliamentarian Klaus Ernst, from the Left Party, addressed the Vermont Commission on Trade and State Sovereignty on “The European Perspective on the Trans-Atlantic Partnership”. This transatlantic connection between a EU member state and a U.S. federal state was facilitated by informal, personal connections. The Institute for Agriculture and Trade Policy had been in touch with the political foundation affiliated with the Left Party in Germany, the Rosa Luxemburg Foundation, and since it already had good connections with various Northeastern states, primarily Maine, a meeting was set up for the Vermont commission, the Institute for Agriculture and Trade Policy and Maine State Representative Treat, a member of the Maine Citizen Trade Policy Commission, to get together.

In Maine, Utah and Vermont, the commissions have to be consulted before the governor binds the state to any international trade agreement. These provisions are largely symbolic because state governments have no say in approving or rejecting free trade agreements such as the TTIP in their entirety. They are, however, important for certain elements of international trade agreements, mostly pertaining to public procurement (read more on procurement in this post).

The procurement opt-in was a topic of state legislatures’ concerns in the early 2000s before the TTIP talks, when the U.S. was negotiating and signing multiple bilateral free trade agreements after the North American Free Trade Agreement (read more on the NAFTA in this post). All across the country, states tried to pass requirements for the governor to consult with the legislature: Bills to this effect were introduced in California, Colorado, Iowa, Nevada, New York and Pennsylvania but were either not passed or vetoed by the governor. Along with Maine, Utah and Vermont, the states of Hawaii, Maryland, New Jersey and Rhode Island passed bills requiring legislative consent before binding the states to international trade agreements. For the TTIP, these laws have not been a means of interest representation yet, as the deal has not been finalized.

The 2014 gathering with the German politician had a rather broad focus on the TTIP as a whole and provided a forum for exchange. A year and half later, however, the National Caucus of Environmental Legislators (NCEL) and the Maine and Vermont legislatures’ trade policy commissions held another meeting dedicated to discussing the TTIP in depth. This time, members of the European Parliament engaged with state legislators from five states. Personal contacts again had led to the invitation of the European legislators: Members of the Maine Citizen Trade Policy Commission had made acquaintances at the political foundation affiliated with the European Green party, the Heinrich Böll Foundation in Germany, and subsequently, two Green politicians were invited to Vermont: Bart Staes and Reinhard Bütikofer, two members of the European Parliament group The Greens-European Free Alliance. The MEPs did not come to the U.S. specifically for this state-level meeting in Burlington, Vermont but were in Washington, D.C., for a separate event.

Members of the NCEL, the Vermont Commission on Trade and State Sovereignty and the Maine Citizen Trade Policy took part in the discussion, with five states (Iowa, Maine, Massachusetts, New Hampshire and Vermont) being represented by state legislators. The day-long meeting focused on renewable energy, climate issues, procurement, regulatory cooperation and GMO labeling.

State legislators thus sought to address a variety of specific TTIP issues of concern to state policies with the MEPs. The MEPs seemed comparatively better informed about the details of the TTIP, which goes back to the complaints leveled within the IGPAC about a lack of access to negotiation documents. The topics discussed between state legislators and MEPs underline the general thrust of state officials’ focus in transatlantic trade policy: They did not invite the MEPs to debate what policies could be implemented to promote exports, what tariffs need to be scrapped or what joint initiatives could be taken to boost job growth. Instead, their emphasis was solely on the TTIP’s potential effects on state regulatory power. For instance, regulatory cooperation was criticized as potentially undermining state laws and causing regulatory chill, meaning that states might become cautious to implement new regulations due to potential pushback from corporate, federal or European actors. The dominance of corporations over state legislators in the TTIP negotiation was also named as an issue gnawing at state powers.

In fact, the headline on the discussions provided by the Greens on their blog, which is generally critical of the TTIP, was “US State legislators ‘shocked’ by EU trade deal implications: Rules envisioned under TTIP could give EU officials power to interfere in US State affairs.”1McKeagney, Simon. (2015, November 12). US State legislators “shocked” by EU trade deal implications. The Greens/European Free Alliance in the European Parliament. Retrieved January 6, 2016, from http://ttip2016.eu/blogdetail/blog/TTIP%20US%20State%20legislators.html. The European Greens’ article offered detailed examples of state legislation, from electronics waste to fracking to GMO labeling and procurement, that could potentially be challenged under TTIP provisions. Clearly, the European Green politicians and the environmentally progressive state legislators who gathered in Vermont shared similar views and expectations on the TTIP, emphasizing regulatory issues over trade promotion topics.

States speaking out on trade issues in Europe

Regulatory issues were also discussed during a trip to Europe by a group of representatives from the U.S. labor group AFL-CIO, Public Citizen and Representative Treat, a member of the Maine Citizen Trade Policy Commission.2Treat, Sharon. (2015, July 23). A rallying cry for a better trade system. Institute for Agriculture and Trade Policy. Retrieved November 14, 2016, from http://www.iatp.org/blog/201507/a-rallying-cry-for-a-better-trade-system. At this point in the summer of 2015, Treat was not a state legislator anymore, having previously served in the Maine state legislature for 22 years. Yet, her membership in the trade policy commission and her efforts in Europe is still another instance in which state interests on the TTIP were directly related to European governmental actors. The speaking tour, with stops in Austria, Belgium, France, Germany, Hungary and Spain, included meetings with civil society organizations, business representatives and also governmental officials from the EU state and national levels.

For example, Treat presented at a discussion in Brussels: “I spoke about the goal of TTIP to ‘harmonize’ standards, potentially wiping out consumer and environmental protections adopted by U.S. states that go beyond weak US federal laws on chemicals, pesticides and food safety.”3Treat, Sharon. (2015, July 23). A rallying cry for a better trade system. Institute for Agriculture and Trade Policy. Retrieved November 14, 2016, from http://www.iatp.org/blog/201507/a-rallying-cry-for-a-better-trade-system.

The group also met with members of the German parliament where Treat offered findings from the report conducted for the Maine legislature. Thus, the speaking tour was an opportunity for state interests to be articulated so that common preferences between European and U.S. actors could be found. None of these parliamentarians, from the U.S. state and the European regional and national level, play an active role in the TTIP negotiation, but this constraint also formed part of the underlying understanding between most of the discussants: They agree on the detriments of keeping trade negotiations secretive and failing to involve noncentral governments.

No permanent, institutionalized state-EU contact

Despite the detailed policy discussions, strategic considerations and general agreement on the TTIP, a permanent dialogue between states and European legislators was not established. The discussions in Vermont remained isolated incidents of global paradiplomatic activities by state governments. The implications of this bypassing are minute because neither the state legislators nor the Green MEPs are capable of immediately changing their respective negotiation leader’s positions. Furthermore, other states apart from the five mentioned do not seem to engage in this sort of bypassing multilayered interest representation on transatlantic trade policy at all. Nevertheless, they are an example of a form of bypassing: State legislators engaged with EU-level politicians directly, without coordination with or interference from the federal government, and discussed their interests in transatlantic trade policy with them, especially on those issues where state concerns run counter to the federal governments’ positions.

The only other contact with members of the European Parliament that was mentioned by the interviewed experts was within the context of the American Legislative Exchange Council (ALEC). Its members have had events with MEPs, yet without a specific transatlantic trade policy focus. Here, too, connections were spun because of already existing personal contacts between ALEC officials and politicians in Europe, for example due to relationships established in previous jobs or via private sector acquaintances. What has become abundantly clear, so far, is the importance of personal engagement of state legislators, outside of their own legislative bodies and outside of the big general-purpose state associations. The NCEL and ALEC are examples for groupings of state legislators with a respective common cause and political ideology, which seem to be able to foster great engagement because its members are passionate about a specific set of topics.

What states can (and cannot) accomplish with trade policy commissions

Even with the detailed report, multitude of letters and personal connections to EU legislators, it has to be questioned whether such state interest representation via legislative commissions is effective. States can make their voices heard but what can they actually achieve? For the TTIP, the verdict on this question is still out because the deal has not been finalized. Yet, some general points on the various means of state interest representation can be made:
  • The importance of letters was recognized and valued by most respondents but a distinction has to be made on what addressing the federal level via written statements can achieve. Based on my empirical research, the informational and agenda setting aspect of letters seems to be stronger than the actual policy impacts.
  • Informal meetings with EU politicians are the prime example of bypassing interest representation and can very well serve to exchange views and establish transatlantic ties. Such meetings, however, were so rare on topics of international trade such as the TTIP that their impact has to be judged rather minimal.
  • Most importantly, states’ positions have to align with other actors’ positions in order to lead to actual changes in policy. For example, interviewees readily acknowledged that just because the USTR receives state legislators’ letters about the problems of the ISDS system does not mean that the administration is going to scrap this mechanism from the TTIP. If state officials want to represent their transatlantic trade policy interests, it is therefore helpful to seek allies with the same interests, both among states but also with federal departments and agencies.