What is the Growing Role of States in U.S. Foreign Policy and Global Trade? — Federalism Really Important.

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The role of states in U.S. foreign policy has often been overlooked generally and especially in international trade relations. A new article in Foreign Affairs discusses the role of states within today’s political reality. I’ve always believed this is an over-looked topic. States have often been active in promoting international trade given the federal government’s inaction. This new article offers a number of interesting observations. While not agreeing with all of them I do think it’s useful to provide some excepts.

  • According to the most common understanding of the federal system—the U.S. government is the country’s preeminent source of policy direction and bears sole responsibility for foreign affairs. Together with lawmakers in Congress, the president and senior executive branch officials are viewed as the key agenda-setters on U.S. leadership and how it is exercised in a tumultuous world.
  • By outward appearance, the expansion of federal powers in the twentieth century has given Washington the advantage in the federal-state balance.
  • And thanks to their sizable economies, the largest states can make decisions that have an impact beyond their own borders. All this has meant that the federal system is far more adaptable, and states far more powerful, than has generally been recognized.
  • But states do more than test new policy; they also fill in existing policy gaps when the federal government stalls.
  • Despite their growing role in domestic policy, states may appear to have little sway in foreign affairs, where nation-to-nation diplomacy and hard power reign supreme.
  • As states assert their interests even more actively in the coming years, they will have a variety of tools to choose from. For one thing, they can count on broad public support.
  • The growing power of states is already reshaping U.S. foreign policy. As states experiment with policies that the rest of the country isn’t ready to support, they can exert an immediate impact abroad: California’s zero emission vehicle policy, for example, was a blueprint for a similar scheme in China.
  • The potential for state-led action is large. Already, states have pledged adherence to international climate change treaty provisions and are forming agreements with foreign governments to achieve sustainability goals.
  • States seem likely to take the lead include supply chain resilience and industrial policy coordination; regional trading arrangements; long-term research and development partnerships; international standard setting, as, for example, in environmental regulations; and new forms of international diplomacy.
  • Foreign governments can strengthen their long-term relationships with the United States, regardless of who is in power in Washington, by building ties with individual states and their dependent cities.
  • Leaders in major states should also plan for the possibility of severe or prolonged federal dysfunction.
  • At its best, the constant interplay between the states and the federal government can provide a powerful strategic advantage to the United States. States can contribute to continued U.S. leadership on the most vital international policy challenges of our time, as well as ensure the resilience of the U.S. system, helping to preserve and defend democratic institutions and practices.
  • What no one should ignore is that U.S. states have the power as well as the motivation to both challenge Washington and shape the global policy agenda. State policymakers and leaders of countries large and small must consider the United States a vast entity with presumed national interests but also as an archipelago of powerful, competing jurisdictions, with certain shared ties, as well as an array of divergent interests and values.

      “Federalism and Foreign Policy.” FOREIGN AFFAIRS (Sept. – Oct. 2022).


About Stuart Malawer

Distinguished Service Professor of Law & International Trade at George Mason University (Schar School of Public Policy).
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