National Association of State Legislators Resolution Affirming and Strengthening President Obama's Recent Order On Safeguarding Federalism In Trade Policy
NCSL thanks President Obama for his commitment to respecting state
sovereignty and improving federal-state relations as evidenced by his
instructions to Heads of Executive Departments and Agencies to avoid preempting
states in their rule-making. This White House order is an important step towards
fostering the type of vibrant federalism NCSL seeks.
The U.S. Constitution grants the federal legislative branch authority to set
our nationís trade policy, and the Tenth Amendment of the U.S. Constitution
empowers states to protect the public interest, including but not limited to
public health, safety, and morals. With respect to our international trade
commitments, additional steps to safeguard federalism are needed.
Many current international trade agreements constrain the use of particular
product and food safety standards; dictate procurement policies and the scope of
permitted service sector regulations, and these rules have the effect of
pre-empting vital policy space that our federal system of government provides to
states to protect the public interest.
Although international trade and investment tribunals cannot directly preempt
state laws and policies as a matter of U.S. law, the federal government does
have an obligation under these trade agreements, enforced by the threat of trade
sanctions, to compel state and local compliance. Thus, trade agreement
challenges and threats of challenges of state and local laws with awards of
money, damages, and retaliatory tariffs and related sanctions at stake have a
pre-emptive effect. As a result, state legislative regulatory authority and
policy space is compromised and the rights of states in our constitutional
system are reduced.
Therefore, the Presidentís executive order should apply whenever such
international agreements or treaties can result in challenges to state laws and
policies before international tribunalsóparticularly in light of the fact that
these rules can be enforced by retaliatory trade sanctions or awards of money
NCSL requests that the White House communicate to the Office of the United
States Trade Representative (USTR) in the Executive Office of the President that
the Presidentís instructions with respect to preemption in rule-making apply to
trade agreement negotiations and implementation.
NCSL requests that the President by executive order clarify that trade and
investment agreements and bi-lateral investment treaties negotiated by the USTR
should avoid conflicts with state governing authority, under the same terms as
the executive order on preemption.
NCSL requests that the President establish, by executive order, a more
effective federal-state consultation system that includes greater involvement
and notification of state legislatures. Meaningful and early involvement by
state and local officials in the trade agreement policymaking and negotiating
process can help avoid the effective preemption of state and local policy by
Original document on ncsl.org.