Trade Policy and the States: Issues
- Government Procurement: When states sign up to government procurement provisions contained in agreements such as CAFTA or the Peru- and Panama-U.S. Free Trade Agreements, common economic development and environmental policies, such as buy local laws, policies to prevent offshoring of state jobs, recycled content laws and others could be subject to challenge as barriers to trade.
- Investment: Under NAFTA, CAFTA and other agreements, corporations can use closed trade tribunals to privately enforce an extreme set of investor rights by directly suing the United States over the actions of state or local governments which restrict the profitability of their investments. NAFTA has already generated “regulatory takings” cases against land use decisions, environmental and public health policies, and adverse court rulings that would not have been possible in U.S. courts.
- Services: The WTO services agreement could undermine state efforts to expand health care coverage and rein in health care costs, and places constraints on state and local land use planning. New negotiations in the services area could have additional implications for state regulation of water, energy, higher education, professional licensing and more.
- Fast Track: “Fast Track” is the now expired process that gives the executive branch the authority to negotiate and write trade agreements without consulting legislators on either the state or federal level. Today’s trade agreements set rules that implicate a range of domestic policies at the state and local level. Fast Track ignores the United States’ longstanding tradition of federalism by denying state and local officials to have even the cursory role that is provided to Congress.