Trade and the Separation of Powers

Abstract

There are two paradigms through which to view trade law and policy within the American constitutional system. One paradigm sees trade law and policy as quintessentially about domestic economic policy. Institutionally, under the domestic economics paradigm, trade law falls within the province of Congress, which has legion Article I authorities over commercial matters. The second paradigm sees trade law as fundamentally about America’s relationship with foreign countries. Institutionally, under the foreign affairs paradigm, trade law is the province of the President, who speaks for the United States in foreign affairs. While both paradigms have operated throughout American history, the domestic economics paradigm dominated in the nineteenth century, and the foreign affairs paradigm from the mid-twentieth century.

Since the end of the Cold War, however, trade law and policy has become increasingly divisive and contentious. Trade law and policy entered a new era of liberalization, characterized by international organizations (like the WTO) and a shift to mini-lateral free trade agreements. By 2016, backlash was in full force, with candidates Donald Trump, Bernie Sanders, and Hillary Clinton all coming out against the Trans-Pacific Partnership (TPP). Since taking office, President Trump has instituted high tariffs on solar panels, threatened to withdraw from NAFTA, and sparked concern about a trade war with China.

This Article makes three contributions. First, we argue that the current discontent over trade is not just a matter of the distribution of economic gains and losses but a matter of the distribution of constitutional powers. We provide a thorough descriptive account of the two paradigms for trade within our constitutional system and show that trade has migrated from a domestic to a foreign affairs matter – and ultimately that it has becoming unhooked even from specific foreign affairs objectives. As trade drifted further away from the balance struck by our separation of powers and became increasingly rooted in the Presidency, agreements liberalizing trade rules became more viable – but at the cost of the political sustainability that comes with greater congressional involvement.

Second, we make a normative case for rebalancing trade within the constitutional structure. We argue that trade shares few similarities with other foreign affairs and national security areas in which the President is seen to have a functional advantage, and perhaps surprisingly given the conventional wisdom, that the parochial interests of Congress present strong benefits to trade policymaking that are widely undervalued.

Finally, we apply this rebalanced framework for trade law and policy to a variety of contemporary debates, including the role of fast track authority in negotiating and approving trade agreements, the President’s power to declare trade wars, the scope of the President’s authority to withdraw from trade agreements, the use of unorthodox international agreements in the commercial context, and the increasing conflict between trade agreements and state and local authority, which we term “trade federalism.”