U.S. state and local governments have become active participants in the global economy as they promote trade, investment, tourism, and technical and cultural exchanges. All 50 states sponsor international programs, and 41 states maintain over 110 offices in 24 countries. More than 1000 cities are also engaged in long-term international activities. Altogether, states and localities are spending hundreds of millions of dollars annually on international projects. The proliferation of subnational government ties beyond America's borders is complicating intergovernmental relations and posing questions of constitutionality, jurisdiction, and propriety. Nonetheless, such grass-roots efforts are vital if the United States is to maintain its economic competitiveness in a complex global arena. Regularized institutional linkages should be established between the federal, state, and local governments, and there should be extensive inter-governmental cooperation in formulating U.S. economic and foreign policy strategies for the 1990s and beyond.
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References
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1. The General Agreement on Tariffs and Trade valued global merchandise trade at $2.84 trillion in 1988, up 14 percent from 1987.
2.
James W. Scott , “Transborder Cooperation, Regional Initiative, and Sovereignty Conflicts in Western Europe: The Case of the Upper Rhine Valley,”Publius: The Journal of Federalism, 19:139-156 (Winter 1989).
3.
3. National Association of State Development Agencies, “Memorandum on State Foreign Offices” (29 Mar. 1989).
4.
4. Governors' Weekly Bulletin, 14 Apr. 1989, p. 1.
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5. See Earl H. Fry, Lee H. Radebaugh, and Panayotis Soldatos, eds., The New International Cities Era: The Global Activities of North American Municipal Governments (Provo, UT: Brigham Young University, David M. Kennedy Center for International Studies, 1989).
6.
6. State and local government officials, mainly through elected representatives in Congress, have always lobbied sporadically on foreign-trade issues. However, they have now become much more attentive and are directly involved in lobbying activities. See John M. Kline, State Government Influence in U.S. International Economic Policy (Lexington, MA: Lexington Books, 1983).
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7. The International Trade Administration states that 5.6 million Americans were involved in export-related activity in 1987 and that hundreds of thousands of new jobs were added as a result of the strong export activity in 1988. See U.S. Department of Commerce, International Trade Administration, Contribution of Exports to U.S. Employment, 1980-1987, Apr. 1989.
8.
Thad L. Beyle , “The Governor as Innovator in the Federal System,”Publius: The Journal of Federalism, 18:131-152 (Summer 1988).
9.
Eric S. Rosengren , “State Restrictions of Hostile Takeovers,”Publius: The Journal of Federalism, 18:67-79 (Summer 1988).
10.
10. This anti-takeover strategy was used by Federated Department Stores against Canadian-based Campeau, Farmers Group Insurance against British-based BAT Industries, and Koppers against British-based Beazer PLC.
11.
11. The Kentucky-Toyota episode is discussed in Wall Street Journal, 9 June 1987.
12.
Oakland Tribune, 13 Dec. 1987.
13.
13. For example, the mayors of Los Angeles and San Francisco have traveled extensively overseas as a part of economic missions. See Earl H. Fry, “The New International Cities Era: The Global Linkages of North American Cities with Special Emphasis on Los Angeles and San Francisco,” in The New International Cities Era, ed. Fry, Radebaugh, and Soldatos.
14.
14. Statistics provided by local officials at the World Urban Development Forum, San Antonio, TX, 13-17 Sept. 1988.
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15. States did have some input during the negotiation of the Canada-U.S. Free Trade Agreement but not nearly to the extent enjoyed by their provincial counterparts in Canada. The states may also voice their opinions in the Intergovernmental Policy Advisory Committee.
16.
R. Scott Fosler , ed., The New Economic Role of American States: Strategies in a Competitive World Economy (New York: Oxford University Press, 1988).
17.
17. California World Trade Commission , News-letter (Spring 1989).
18.
18. Statistics compiled by the U.S. Travel and Tourism Administration. In 1987, tourism generated $11.5 billion in state tax revenues.
19.
19. The Mid-South Trade Council, which includes Alabama, Arkansas, Kentucky, Louisiana, Mississippi, and Tennessee, has begun to explore joint trading ventures.
20.
20. See John Kincaid, “State Offices in Europe,”Comparative State Politics Newsletter, 6:22 (Aug. 1985).
21.
21. Cooperative investment attraction is high on the agenda of the Mid-South Common Market grouping, which includes 105 counties in Mississippi, Arkansas, Tennessee, Kentucky, Missouri, and Alabama.
22.
22. In the early 1980s, South Dakota officials claimed that they had enticed more than sixty companies to move from Minnesota to their state. See Wall Street Journal, 14 Feb. 1983.
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23. For example, San Francisco prohibits these businesses from bidding on municipal contracts that are over $5000. See Michael H. Shuman, Building Municipal Foreign Policies (Irvine, CA: Center for Innovative Diplomacy, 1987), p. 4.
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24. Report of the NGA's conference held at Traverse City, MI, 25 July 1987.
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25. The first FDI proposal to be blocked temporarily by the Bush administration was Tokuyama Soda Company's planned takeover of New Jersey-based General Ceramics. The first proposal requiring performance requirements on the part of a foreign investor was Heuls AG's takeover of Monsanto Electronic Materials Company. Heuls was required to stipulate in writing that Monsanto's research and development and manufacturing facilities would remain indefinitely in the United States.
26.
26. See Daphne A. Kenyon and John Kincaid, eds., Interjurisdictional Tax and Policy Competition: Good or Bad for the Federal System? (Washington, DC: Urban Institute Press, 1990).
27.
27. Report of the NGA's 1987 conference in Michigan.
