Free Trade Agreements And The New Federalism

This article describes several stages of the new legal system of federalism and federal trade law. First, is discusses the old paradigm of trade law, expounded by the Supreme Court in its Supreme 1979 Japan Line decision. There, the Court held that the Federal Government must be unified when it regulates commercial relations with foreign governments. In the 1980s, the Court's approach moved toward a quot;market participationquot; approach, which exalted states' rights by allowing them to engage in private businesses with the entity of its choice. In discussing the consequences of this trend toward states' rights in the context of free trade, the author analyzes how states' rights affected both the Uruguay Round negotiations and the implementation of NAFTA. He notes that state interference in these bills created a complex remedial process for aggrieved foreign businesses, and discusses how the Court's creation and promotion of a quot;weakquot; preemption resulted in delays and deferrals within the free trade world. To resolve these issues, the author proposes a new system of quot;dual sovereigntyquot;. In this system, the federal and state governments work together to craft a free trade agreement. The President, acting as a broker between competing states, helps resolve issues and ensure that no one state will be able to frustrate international agreements by non compliance.