Kathleen Claussen
Abstract
At the core of U.S. economic governance, there is a novel and under-noticed phenomenon that challenges longstanding frameworks of international law and corporate compliance. This practice, which this Article terms the new “trade policing,” has extraordinary reach. Recent regulatory makeovers and pathbreaking statutes empower our trade agencies to target, for the first time, companies, rather than foreign governments, as used to be their purview. Trade police now pursue companies wherever they may be in the world, not just for violating U.S. law but also for violating foreign law in areas as diverse as labor rights and environmental protections. Such a regime may sound untenable, defying basic principles of jurisdictional authority. But new corporate trade policing is increasingly entrenched in international trade law. This repurposing of our trade enforcement system has the power to transform dramatically the global commercial system, the bargains it manages, the procedures applicable to it, and the rights and obligations of all involved.
Drawing on a diverse set of agency communications, new legislation, and interviews with government officials, this Article surfaces this subtle but critical pivot in our cross-border commercial governance. It maps the institutional ascent of this revealed practice and argues that the practice was the product of disillusionment with the intellectual pedigrees of conventional trade law and developed in response to calls for more effective tools to combat vast corporate wealth and economic marginalization.
The Article then evaluates trade policing in light of the progressive aims that policymakers have set for it, taking into account the many constituencies on whom the burdens fall unevenly. Through numerous examples across different regulatory policies, the Article shows not only that trade policing is happening, but also that it matters. This excavation exposes how our trade police do not operate like other forms of law enforcement or bureaucracy. Rather, trade policing occurs in considerable shadow and lacks hallmarks traditionally associated with administrative law. Still more troubling is that tactics like those in the U.S. arsenal bear close resemblance to the practices of authoritarian governments that seek to provoke acquiescence without process. The Article’s assessment prescribes lessons for the several disciplines that trade policing touches, including for the way scholars and lawmakers conceive of which bodies of law, tools, and actors are best suited to manage international corporate behavior.
Taken together, the Article makes four contributions. First, it identifies and illustrates the rise of the new trade policing. Second, it unpacks the distinct features of this novel corporate targeting and draws conclusions about its functions for the way we think about compliance with a wide range of public policies. Third, the Article offers a guarded defense of this complex work by our foreign commercial bureaucrats and analyzes the implications for trade law, administrative procedure, and governance. Finally, the Article demonstrates that, as a corporate accountability system, trade policing has leapfrogged efforts by fields with similar aims, and the policing tools we have so far are just the tip of the iceberg.