Governors and the Global Market: A Michigan Example

Cole Lussier, Vol. 37 Associate Editor

In American foreign affairs law, it is long established that the “external powers of the United States are to be exercised without regard to state laws or policies.”[i] Yet this does not mean that governors are required to ignore the effects of an increasingly connected global community and the opportunities it presents. Indeed, to varying degrees of success, savvy governors have attempted to tap into the international marketplace to establishing trade relationships and attract foreign investment to their states. The role of states in international law is of course not new, and states have been involved in global legal matters in different ways. Of course, much of the discourse on the role of states and governors in international law has focused on formal roles. Whether it be giving effect to the judgments of international tribunals or dealing with the demands of a foreign state, forming bilateral or multilateral agreements with foreign states or their subunits, or enacting their own legislation that runs up against the laws of another country, states have simply been unable to avoid the global legal arena.[ii] One of the most dynamic ways governors can engage the global community is by facilitating international trade and investment. Measuring the success of governors’ trade and investment missions abroad is not easy. Often, such trips have drawn criticism for spending state dollars to gain only empty promises. Furthermore, it is difficult to attribute particular imports or investments to any specific trip that a governor may have made.[iii] Nonetheless, some governors have not shied away from formal agreements, either with foreign governments and their subunits, or, perhaps most interestingly, foreign corporations. One governor, who has actively worked to pitch his state both as a business friendly climate worthy of investment and as the source of goods that deserve the world’s attention, is Michigan governor Rick Snyder. As of September 2015, Snyder had taken multiple trips to China, Japan, Germany, Italy, and Israel.[iv] On Michigan’s current relationship with the global economy, he stated, “the world is increasingly interconnected and it is important for leaders in other countries to hear about what Michigan has to offer.”[v] Of course, that requires knowing what you do well. As he continued, “We’re the leader in automotive research and design, we have a strong manufacturing base and we have a talented workforce. Those qualities are attractive to businesses considering expanding to the United States and we want them to create those jobs here.”[vi] Without actual programs and services that bridge Michigan to the global marketplace, such rhetoric may be mistaken for cheerleading. Yet, those paying attention have seen Michigan take steps to genuinely establish relationships abroad. As the Michigan Economic Development Corporation’s International Trade Office boasts, the state has opened international trade offices in Toronto, Mexico City, Shanghai, Berlin, London, and Sao Paolo, all over the last four years.[vii] These connections have helped the International Trade Office facilitate $242.7 million in exports for 2015 alone.[viii] In addition to pitching a state’s exports abroad, trade missions allow governors an opportunity to explain why there state is the ideal location for foreign corporations looking to expand into the United States.  During a recent trip to Tokyo, Snyder promoted Michigan to Japanese governors and business leaders, stating, “[i]n the last five years, hundreds of companies, both domestic and international, have invested in our state’s success. We have reinvented Michigan through common sense reforms and we’re moving forward with a new economic climate that is making growth and investment decisions.”[ix] Indeed, the sincerity of Snyder’s sales pitch abroad has been bolstered by reforms at home. This has included a 6% flat corporate income tax and the elimination of an industrial personal property tax that the Michigan Economic Development Corporation claims has saved businesses $500 million annually (to say nothing of the controversial domestic politics of these reforms).[x] Snyder’s talk of Michigan’s domestic tax policy during a visit with distinguished politicians and business leaders in Tokyo is a testament to the deeply interconnected condition of our world. These interactions show how an American state’s internal policy and opportunities in the international marketplace can reinforce one another, as well as the fluid way we should try to define international legal actors. In the international trade and investment context, Michigan’s international reach highlights the way that states can interact in the global market in new and exciting ways. It proves how opportunities abroad can translate into growth and investment at home, but it also indicates that our connections to the rest of the world are not going anywhere. Therefore, through engagement and nurturing real relationships abroad, state leaders can act in formal and informal ways to ensure that their communities are not left behind by a world that requires constant communication and innovation.

[i] United States v. Belmont, 301 U.S. 324, 331 (1937). [ii] See Julian G. Ku, Gubernatorial Foreign Policy, 115 Yale L. J. 2380 (2006). [iii] Jamey Keaten, US governors’ trade missions have uneven records of success, The Associated Press (June 22, 2015), http://insurancenewsnet.com/oarticle/2015/06/22/us-governors-trade-missions-have-uneven-record-of-success.html. [iv] Emily Lawler, Gov. Rick Snyder: foreign trade missions bring $196 million in investments to Michigan, MLive (July 25, 2015), http://www.mlive.com/lansing-news/index.ssf/2014/07/snyder_trade_missions_bring_19.html. [v] Emily Lawler, Michigan Gov. Rick Snyder headed to Japan, Germany on trade mission, MLive (Sep. 10, 2015), http://www.mlive.com/lansing-news/index.ssf/2015/09/michigan_gov_rick_snyder_heade.html. [vi] Id. [vii] International Trade Services, Michigan Business, (Dec. 12, 2015, 2:14 PM), http://www.michiganbusiness.org/grow/international-trade-services/#tradeoffices. [viii] Id. [ix] Press Release, Michigan.gov, Gov. Rick Snyder makes case for investing in Michigan, strengthens ties with Japan (Sep. 14, 2015), http://www.michigan.gov/snyder/0,4668,7-277-57577_57657-364607–,00.html. [x] Incentives & Taxes, Michigan Business, (Dec. 12, 2015, 2:16 PM), http://www.michiganbusiness.org/grow/incentives-taxes/.