Research Questions and Analytical Framework

This study aims to shed light on the questions whether, how and why U.S. states become active in transatlantic trade policy making. The literature so far has viewed states mostly as economic actors emphasizing export promotion and FDI attraction, so my research will lead

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to an improved understanding of states as political actors, representing their interests on trade policy issues. Furthermore, I intend to uncover the intergovernmental conflicts that arise in transatlantic trade policy making between the states, the U.S. federal governmental and the EU. The overarching research questions for my study therefore are:

1. Considering their constitutional limitations in this field, what means do states have to represent their transatlantic trade and investment policy interests and why do some states use them, while others do not?

2. Why and in what ways do some state executives, state legislatures or other state governmental bodies engage with U.S. federal actors and European actors to represent their transatlantic trade and investment policy interests, particularly when these conflict with federal and European interests?

This study lays out the various options U.S. states have to represent their interests in transatlantic trade policy and what U.S. federal and European actors they are connected to. The analysis will be done specifically against the backdrop of the TTIP negotiations.

The broad research questions address a variety of concerns: What governmental actors at the state level become active and how? What motivations do the executive and the legislature have and do they overlap? How do states deal with the legal limitations placed on them by the U.S. constitution, which gives the federal government the responsibility to negotiate international trade agreements? What options do state executives, legislatures and other governmental bodies have to reach actors in Washington, D.C., and Europe, especially when their interests are at odds with U.S. federal or EU interests? Most fundamentally, my research aims to figure out why some states become active in representing their trade policy interests on the TTIP, while others focus mostly on trade promotion.

This exploration of the variance in states’ interest representation on the TTIP is reflected in both research questions. The first question asks for the means that states have at their disposal to make their voices heard on trade policy issues. It then focuses on the variance among states by asking why states use these means to speak out on policy-related TTIP issues. What are their reasons and how do they differ from the reasons to speak out on trade promotion issues? This part of the research question thus allows for a comparison of states focusing on trade policy interest representation and those focusing on trade promotion interest representation on the TTIP. The second research question emphasizes the variance in state-federal conflicts. It asks about the connections states have to federal and EU actors, aiming to uncover the divergences that might exist in transatlantic networks on trade policy and trade promotion. The purpose of the question is to establish the different types of conflicts that emerge in trade promotion interest representation and trade policy interest representation. It can also illuminate whether one area is more conflictual than the other.

Identifying what means and avenues states have to make their voices heard is a valuable descriptive element of the research questions. Their main parts, however, are analytical and exploratory, shedding light on states’ motivations and conflicts in transatlantic trade policy interest representation. Considering this is a research field at the nexus of IR and federalism studies that has not received extensive scholarly attention, these rather general and exploratory research questions are necessary. This perspective might not provide definitive answers to all aspects of states’ transatlantic trade interest representation, but it does offer new insights into states’ foreign relations. The research questions allow for a broader discussion of states in international affairs.

By expanding the view from trade promotion to trade policy, new insights and arguments can be gathered. In this study, my main argument goes beyond the traditional focus of states as global economic actors. Looking at why and how states represent their trade

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policy interests on the TTIP, I will argue that securing more exports to or more FDI from the EU is not the only reason for states to become engaged in the discussions surrounding the trade deal. It is oftentimes not even the most important reason. Rather, U.S. states attempt to defend their state sovereignty in light of prospective regulatory preemption by federal and international actors. States and the federal government clash more often over questions of competency in international trade policy than they do over strategic economic development decisions. Thus, I will argue that states’ interests in the TTIP are not entirely driven by economic considerations, such as exports, investments or state-specific industry concerns. States’ interest representation in transatlantic trade policy reflect their efforts to obtain meaningful roles or strengthen their existing roles in the intergovernmental trade policy- making process in U.S. federalism.

Furthermore, I will argue that variance among states’ interest representation is the result of their differing economic structures, different ideological preferences within states and the personal backgrounds of state officials. The combination of these three factors explains why some states become active in transatlantic trade policy interest representation and others do not, instead sticking to trade promotion issues.

The goal of this research is to enhance our understanding not only of U.S. federalism and intergovernmental relations but also of global interactions and linkages between all governments in a federation as well as with private actors. The significance of the inquiry therefore lies in broadening the view on transatlantic relations: This field is often focused on how national and supranational governance structures in the U.S. and Europe relate to each other or to the private sector, for example to multinational corporations or nonprofit organizations. This study also departs from the usual emphasis of economic and investment- related matters over intergovernmental issues of state-federal competencies. Taken together, the study aims to analyze states as multifaceted actors among many others in transatlantic trade relations that work not only on economic but also regulatory issues.

Multilayered Interest Representation

For this research, an analytical framework is required that covers U.S. states’ activities in transatlantic trade relations. These occur against the backdrop of an interdependent globalized market and an ambiguous constitutional setting ripe with pitfalls for intergovernmental conflict. This setting, reviewed in depth in chapter 3, is a prime example of how indistinct the line between foreign and domestic policy issues is and how intricate the intergovernmental balance between central and noncentral governments is. Export and FDI promotion have domestic state benefits in mind but are predicated upon direct connections with overseas businesses. International treaties are negotiated by the federal government, but their regulatory effects on states are discussed within the U.S. intergovernmental and judicial systems. Both examples can be classified as global engagement by states, showing how states act on multiple layers to represent their various international interests.

Thus, I consider states’ transatlantic activities under the umbrella of multilayered interest representation. This term is deliberately close to the prevailing concept of paradiplomacy or multilayered diplomacy (see section 3.1). But it circumvents some of the terminological issues, namely the insinuation that states always act “beside” or “auxiliary to” the central government (“para”) and that they engage in diplomatic representative endeavors (“diplomacy”). This is not the case because there are overlapping responsibilities and also areas in which the states act completely independently of the administration. In short, states’ international linkages and their engagement on international topics are multilayered. The multiple layers of states’ interest representation can be seen in a number of ways:

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• States can address both federal and European actors, and among these, there are governmental and nongovernmental organizations and individuals. Moreover, in Europe, states can be in touch with actors at the regional, national and supranational level.

• States have a host of avenues to make their voices heard, ranging from written statements to personal contacts in the national capital to overseas visits.

• States themselves are multilayered: In this study, I consider state executives, state legislatures, state associations and state-federal bodies, and there are not always clear distinctions possible, for example due to overlapping memberships or joint international projects.

• States work on multiple facets of transatlantic trade and investment relations with different aspirations and goals, for instance on trade promotion to attract FDI or on trade policy to defend state sovereignty, which requires them to devise multiple strategies to articulate their positions.

Interest representation on these topics can be understood as a process in which states feed their positions to the various U.S. and European actors engaged in transatlantic trade and investment relations.

With multilayered interest representation, I can study the different actors, avenues and aspirations involved in states’ transatlantic trade relations. The concept acknowledges noncentral governments’ engagement as economic and political entities in conjunction with

other governments and private organizations, instead of focusing on relations between nation-states or between nation-states and private actors. Furthermore, as multilayered interest representation is based on and still close to the idea of paradiplomacy, I can use the related idea of modes of state-federal relations in international affairs (see table 5 on page 42) to analyze when multilayered interest representation is in harmony with the federal government and when it is conflicting with the federal government (see chapter 7).

Trade Promotion Interests and Trade Policy Interests

This study will ponder states’ multilayered interest representation on two topics related to the TTIP: I will differentiate between trade promotion interest representation and trade policy interest representation and analyze the differing means and motivations states have in these two fields. This differentiation is based on previous scholarly work on states in international relations and was also echoed in the qualitative interviews conducted for this study.

There is a decent amount of scholarship discussing U.S. states as economic actors in globalized markets. Federalist and paradiplomatic scholarship has taken this up: Authors examine if and how states are legally allowed to sign international agreements or promote their economies globally and whether they are organizationally capable to do so. This has been a strong focus in the literature on states’ international affairs, with many studies diving into states’ overseas trade offices and their efforts to build business networks around the globe. I have summarized this under the heading “transatlantic trade promotion” and will offer findings on this in chapter 5. An emphasis will be placed on FDI attraction and export promotion, which is the key impetus for states to become engaged as global economic actors and which also reflects the major direction of earlier literature.

In contrast to trade promotion, states’ trade policy interest representation has featured less prominently in the literature, even though states do become engaged in policy issues that have nothing to do with promoting exports or attracting FDI. I subsume this under the heading “transatlantic trade policy” and discuss states’ interest representation in this area in chapter 6. International political economy scholars have at times highlighted the roles of states in international trade negotiations and I will draw upon this IPE research, specifically

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by using a matrix of noncentral governments’ potential interactions in trade negotiations (see table 4 on page 41). In doing so, this study will refine and update existing literatures with the contemporary and far-reaching TTIP talks and expand them by focusing more on the processes of interest representation than the outcomes of negotiations.

The division between trade promotion and trade policy might seem inaccurate, considering the argument that speaking out on regulatory issues of international trade policy in a state’s favor ultimately promotes their exports and investment standing as well. This is true, but trade promotion could also happen without any link to federal or international trade policy: A governor might go to Europe to meet with potential investment partners. A legislature might pass a resolution reiterating their friendship to another country or region to promote economic development. At the same time, as this study will show, there are also specific trade policy areas in which states emphasize issues related to regulatory authority and federalism that are not linked to economic development. While overlaps might occur, one crucial goal of this study is to explore the variation between these two realms of transatlantic trade relations. My research reveals marked differences between those states emphasizing trade promotion in their interest representation on the TTIP and those states working on trade policy issues. This variance is discernible in the means states use to make their voices heard and the motivations states have to become active in the first place. Intergovernmental conflict can also be viewed in light of the distinction between transatlantic trade promotion and trade policy.