Trade agreements encourage foreign governments to adopt the sorts of open and transparent rulemaking procedures, and non-discriminatory laws and regulations that are the hallmark of due process in the United States and are in place at all levels of government in the U.S. At the same time, in every agreement we negotiate the United States remains very sensitive to, and protective of, our federal system of shared power. It is important to understand what trade agreements do and don’t do.

Trade agreements are about fairness, not about regulation. They generally say that the rules or standards imposed by governments should not discriminate between U.S. and foreign providers of goods and services. Trade agreements do not restrict a state’s right to regulate and do not automatically preempt, invalidate or overturn state laws. Nothing in any trade agreement prevents the United States or any state from enacting, modifying, or fully enforcing domestic laws. And international panels set up to look at disputes over trade agreements have no authority to change U.S. law or to require any state or local government to change its laws or decisions. Only the federal or state governments can change a federal or state law.