This is something U.S. Trade Rep. Katherine Tai said at a Carnegie Endowment for International Peace event last week:
There often is a tension between how international trade rules interact with our own domestic policies and regulations. International trade rules tend to discipline what countries can do and there's a natural friction point with domestic policymaking. For Democrats, we talk about this often as the need to preserve and retain policy space when we are negotiating trade rules to ensure that trade rules are not unduly taking away the jurisdiction for domestic policymakers, especially in a democracy. For Republicans, you often hear concerns around sovereignty and how sovereignty interacts with international trade rules. And you unpack those sovereignty concerns, they end up being very, very similar.
In my view, the core trade principle of nationality-based non-discrimination doesn't constrain policy space or sovereignty very much, and if we stick to that, there is not much friction with domestic policy-making. The friction mainly arises from trade rules that go beyond nationality-based non-discrimination. Here are a few examples:
-- intellectual property protection
-- fair and equitable treatment / indirect expropriation in investment protection rules, enforceable through ISDS
-- SPS rules that require a scientific basis for domestic regulations
-- certain digital trade rules
-- labor rights protections
-- environmental protection
These kinds of rules in trade agreements come from a number of places, but the U.S. is certainly a leading source. In terms of U.S. politics, Republicans push for some of these rules, Democrats push for others. And of course the compromise is that just about everything is included (we shift back and forth about which are being pushed hardest at any given moment).
So perhaps the message someone needs to take to the folks who are upset about the intrusion of trade rules on domestic policy space and sovereignty is: This is the policy you asked for. Now, some of those complaining are people who voted against trade agreements, so they are not responsible. But there are others I can think of who seem to want trade rules that infringe on other countries' policy space or sovereignty but not on American policy space or sovereignty. One example may be farm state legislators who want trade rules that can stop foreign governments from adopting specific food safety regulations, but then get upset when those rules interfere with their ability to legislate.
