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The Hidden Rules that Govern Our Supply Chains

Last month, Curt Bradley, Jack Goldsmith, and Oona Hathaway highlighted a set of provisions found in Section 310 of the proposed Strategic Competition Act of 2021 (SCA) that would improve transparency of U.S. international agreements. Importantly, they noted there, as they do in their recent Harvard Law Review article, that the State Department only makes public a fraction of the agreements that the executive branch concludes and that it likewise falls short in reporting those agreements to Congress as required under the Case-Zablocki Act (Case Act).

Part of the reason for the State Department’s underperformance on executive agreement publication and reporting is that not every agency provides the State Department with copies of the agreements it concludes. That is especially true when it comes to trade-related executive agreements (TEAs) – foreign commercial agreements not approved by Congress after their conclusion. But forwarding completed deals to State is not the only accessibility issue surrounding our more than 1,200 TEAs.

As I explore in a forthcoming essay in the Columbia Law Review Forum, trade deals are frequently left unpublished and unreported by the U.S. agencies that negotiate them. In fact, TEAs are sometimes not available to anyone apart from the agency that concluded them and the foreign government partner. Worse still, in some instances, the U.S. government has misplaced its copy entirely.

Not having the text of commercial agreements concluded by the U.S. government is troubling as a matter of good governance, though it would matter less if these agreements were relatively inconsequential. But even a brief glimpse of those that are available indicates that these agreements create binding commitments of reasonably significant value. They govern the goods and services that get into the country and under what conditions. They set up systems for food safety, product quality, cooperation with significant foreign partners, and much more. The result is that hundreds of agreements critical to our globalized supply chains are simply unavailable.

My team and I had to locate these trade deals by hand – reaching out to foreign governments, subscription services, retired U.S. government workers, and anyone else who might have access to agreements that the U.S. government no longer has or is unwilling to share.

That executive branch agencies are not reporting and providing TEAs to Congress also has constitutional implications. Unlike some other areas of foreign relations, the regulation of foreign commerce is a congressional prerogative per Article I of the U.S. Constitution; and yet, as our work revealed, Congress has only limited information about the foreign commercial agreements into which the U.S. government is entering.

Despite the explosion in the use of hidden trade deals in recent years, Congress has only barely spoken to the problem. A 2002 statute provides that an undisclosed TEA related to a major free trade agreement shall have “no force and effect” under U.S. law. That constraint does little to address the unavailability of hundreds of other TEAs, let alone the executive’s engagement with Congress about them or the delegation of authority issues that they also implicate.

Why the SCA Doesn’t Solve Problems with Trade Agreements

It doesn’t have to be that way. But the proposed changes set out in the SCA will not do what is needed to fix trade’s transparency problems.

One primary limitation of Section 310 of the SCA – and of the 1972 Case Act – is its focus on the State Department as the clearinghouse for executive agreements whereas trade has been institutionally and procedurally separate from other areas of foreign relations for more than fifty years. In 1962, the Office of the U.S. Trade Representative (USTR) was created to take trade out of the State Department’s purview and, while an interagency structure was built around it to provide support, USTR has the lead on the trade agreements program. That division of labor, enhanced by later legislation giving USTR still greater management and control, created different lines of authority and processing for trade agreements than for other agreements.

Thus, withholding appropriations from the State Department as the SCA seeks to do would not prevent trade-engaged agencies (any one of more than a dozen agencies that are so engaged such as the Department of Agriculture, the Department of Commerce, the Food and Drug Administration, USTR, etc.) from doing what they are already doing – concluding, on average, twenty of these off-the-radar agreements each year. The SCA also would require that the executive branch notify committees within five days after the State Department approves negotiation or…

Read More: The Hidden Rules that Govern Our Supply Chains

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