How do you preserve the ability to legislate locally when so many big economic decisions are now taken at a global level? PT asked Vermont Representative Kathleen Keenan.
PT: National trade policy has tremendous ramifications for individual states, yet the federal government's role in regulating foreign trade is designed to limit state autonomy. With the continuing growth of the global market, is there any balance to be struck between free trade and local democracy?
Keenan: I think there should be a way to do it. I think that the states need to have some kind of say in the process when the United States is negotiating these treaties. If we don't, it usurps all of our environmental rules and labor standards. I think that states shouldn't be put in the position of having to defend themselves against companies who can set up a subsidiary in another country for the purpose of coming in and suing us for violating a treaty.
Ultimately, the current system impacts all of our environmental and labor standards, and I don't think it makes for a level playing field. I don't have any problem with international trade—that's a big part of our economy and we need it. I just think that we should have a level playing field.
PT: States are really in a much better position to gauge the impact of trade policy than the USTR, but they have little sway over the ultimate positions taken by the administration...
Keenan: We don't have any sway; it's all about what the White House wants to do. All we have is the Congress, and I think that about half the time Congress isn't alert to what's going on with a lot of these trade policies.
PT: What is the state's role then? Would the ideal scenario be a more receptive Congress? Better relations with the USTR?
Keenan: Well, better relations with the USTR would be a good start, but I think that some of these things should be ratified by the states too. There should be hearings, and maybe states should be able to vote on these things. Maybe if you get a majority of states together voting on these things then you have to live with the end result, but right now there's not much to do. If they reauthorize the fast track, I just think it leaves us at a disadvantage in the states.
PT: What about some of the logistical challenges inherent in the current system? Do you think that maybe our federal model isn't structurally capable of dealing with today's global marketplace?
Keenan: Possibly. We've gone into a global economy so fast; I don't think anybody has been really ready for it. A lot of the implications haven't been thought through. I do think that it's a good thing, but I don't think that we've been prepared for it institutionally.
PT: So, how do states surmount those institutional, structural challenges? How do you get the USTR to listen equally to 50 states' concerns?
Keenan: Well, from what I understand of the USTR, the position is really a direct arm of the administration. So, until they're responsible to others, I don't think anything is going to change.
PT: Are there specific concerns in Vermont about these issues?
Keenan: We just started, and we're trying to educate ourselves. I think where we're putting a lot of our energy and focus right now is on the fast track provision, which is up for renewal this summer.
PT: Let's look at how trade policy could ultimately impact the legislative process in the states. How would it change the rules for state legislatures if non-compliance with trade agreements could be seen as the basis for withholding federal monies to the states?
Keenan: Boy, that's getting your arm up behind your back, isn't it? Wow. I think that would be devastating for the states. I can't believe that anyone in Congress would go along with that. Still, I think that we just need to get ourselves mobilized in the states. States need to realize what's involved in these treaties that we're in and what we need to do to protect ourselves. Then we all need to get together and educate the Congress.
PT: It's also interesting because ultimately the Constitution doesn't regulate business—it regulates foreign trade and interstate commerce. But trade agreements do say things about business regulation and labor standards. I guess the real question is how the states can best engage in that debate about sovereignty and economics. Is there even a place for them to get together and exercise their political authority?
Keenan: I hadn't really considered it that way, but I think that's correct. I think they may be biting off a little more than they're allowed to chew.
PT: We hear a lot about one branch of the federal government occasionally trying to chip power away from the others, but we don't hear as much about the vertical power-sharing dynamic. No matter how you look at it, the states comprise an enormous reservoir of political authority. Do you see any opportunity—whether via trade policy or something else—for the states to re-exert their political clout in the federal model?
Keenan: I think we've tried that in other areas. But there are so many sensitive facets to trade agreements. More and more states are becoming environmentally conscious and there are some states that are still concerned with labor issues. We're certainly concerned with agricultural issues. The western states are having problems with Mexican trucks coming into the country that aren't inspected or properly insured. So, I think there are just more and more of these things cropping up. I think the states are going to start digging their heels in; maybe later than sooner, but it is going to happen.
PT: Representative Keenan, thank you for your time.
Kathleen Keenan sits on Vermont's House Appropriations Committee.