Harold G. Maier

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Traditionally, governmental activity to encourage and facilitate export trade and to encourage direct investment in the United States by foreign entrepreneurs has been the responsibility of the national government, especially the Departments of State and Commerce. During the last five years, however, a significant and growing role is being played by the governments of the several states in developing their own programs and policies to stimulate international trade and investment. This activity includes not only the more traditional advertising of opportunities but the active on-the-spot solicitation of business opportunities abroad. This solicitation is carried on by direct contact between state governments and both private and governmental officials of foreign countries with the active cooperation of the United States Department of Commerce and of American embassies and other consultants overseas. The introduction of state government into this field has resulted in a much more dynamic and effective operation than was ever achieved by the federal government acting alone. The recognition of coordinate interests and of the possibilities of effective cooperation between the state and the national governments illustrates how cooperative federalism can provide effective government participation in an acitivity which neither the states nor the national government could carry out as effectively acting independently. On the other hand, the introduction of state governments into an area heretofore almost exclusively reserved to the national government is not without its potential problems. A diversity of views and approaches, a strong competition between the states to attract foreign investment, and the direct contact between high state officers and foreign governmental officials and diplomats, creates the possibility, as this activity expands, of requiring control or regulation by the federal government in order to prevent interference with United States foreign policy which increasingly is tied to questions of economic policy rather than to questions turning on conflicting political ideologies.

It is the purpose of this essay to examine the constitutional relationships between the states and the national government which may become important as state activity increases in this field. The following material is divided into three general segments: a short survey of the activities of the state governments in the international area and a description of the cooperative activities currently being carried on between the states and the nation; a summary of the constitutional law which permits direct national control over any state activity in the international commercial field; and a more intensive discussion of the extent to which the constitutional structure limits state activities which conflict with national policy, even when that policy has not been reduced to positive law.