An earlier article detailed the PRC’s attempt to intervene in a Maryland legislative proposal introduced in October 2007 to ban lead in children’s toys through the World Trade Organization Technical Barriers to Trade (WTO TBT) commenting mechanism. But this was far from the only case of its kind. This article will explore how Beijing became involved in a Vermont draft bill related to environmental regulation in 2008, again using the TBT process, and the series of events that followed.
On January 8, 2008, Vermont State Senator Virginia (Ginny) Lyons introduced S256 to implement a system for electronic waste recycling in the state. “Back when I put the bill in, it was a brand new idea,” Lyons said in an interview with The Diplomat in March 2021. “I had no intention of looking at it for another couple of months. But I left it there, online, for people to see, so they would be prepared to testify and understand what it was.”
A few months later in April 2008, Lyons received a six-page letter in Chinese and English via email. At first, she thought it was from one of the local universities because she didn’t have any other possible contacts with China, until she scrolled down and found that the sender was the People’s Republic of China’s Secretary of Commerce.
“I said, wow, this is serious. Then I looked at it, and it said that if we continued with the electronic waste bill and moved it forward we would be in violation of the technical area of the WTO,” Lyons told The Diplomat. “Because I was also chair of our international trade and state sovereignty committee, I understood what that meant. I also felt extremely threatened when I got that email, because it was a direct intrusion into my ability to operate democratically as a senator, I didn’t like the way it made me feel.”
At a press conference back in 2008, Lyons said, “The email included a WTO document indicating that the U.S. federal government had notified a WTO Committee that S256 could be in violation of international trade law. Also attached was a cover letter from Wang Ni Ni, Director General of the China WTO Notification and Enquiry Center, and official comments by the People’s Republic in response to the U.S. notification.”
In the letter, Beijing made complaints similar to those stated in the earlier missive to former Maryland House Delegate James W. Hubbard, citing specific assertions but without providing much factual or legal explanation. Also, like letters sent to Hubbard, the letter claimed Lyons’ bill would create “unnecessary obstacles” to international trade.
According to the Forum on Democracy and Trade’s preliminary analysis of the PRC letter, “Under Article 3.2 of the TBT Agreement, WTO member nations, including the United States, are required to notify other members whenever a state or provincial government such as Vermont proposes to enact a ‘technical regulation’ that is not based on international standards and that will have a “significant effect on trade of other [WTO] Members.”
Then-Forum on Democracy and Trade Director Peter Riggs described the letter in a 2008 interview with a Vermont newspaper as “a major shot across the bow from Beijing to Burlington.” Riggs continued: “This is about China, but it’s also about to what degree do these international agreements intrude on normal state lawmaking powers?” Riggs added. “We gave up some sovereignty when we joined the WTO. No one disputes that. But what exactly did we give up?”
State Legislators Push Back
Lyons did not respond to the PRC letter, partly because a USTR staff member told her that the letter was “a mistake” and that “she should disregard it.” However, Lyons took action by other means.
On July 11, 2008, Lyons introduced a resolution before the Labor & Economic Development Committee at the National Conference of State Legislatures (NCSL), titled “China’s Challenge to State Law-Making Authority,” alerting other state legislators to this new pushback. The resolution deplored PRC “interference in the normal exercise of state lawmaking authority by raising the specter of possible trade challenges to state measures that are designed to limit the exposure of children to possible carcinogens and toxic chemicals.”
Also disquieting is the evidence that USTR provided China the information necessary for the PRC to prepare its written challenges–which in one case even included the home address of a state legislator…
USTR has responded to state legislators whose bills have been targeted by the Chinese only by saying such the challenges were ‘a mistake’ and can be ignored. This explanation might have been acceptable had China’s notification challenges happened only once. But these challenges have taken place over the last six months, and have involved several states, and different issue areas.
This pattern suggests to NCSL that the PRC has recently decided on a policy of confronting state lawmakers when their bills are still at the drafting stage, or in the process of consideration by legislatures prior to passage. Consequently, NCSL seeks a clarification from the United States Trade Representative as to why notification and challenges are now occurring.
Later that month, Lyons’ policy resolution was well received and adopted nearly unanimously at the NCSL annual meeting. Lyons told The Diplomat that members of the USTR office were present at the meeting and appeared to be very concerned that the resolution would be passed.
On August 12, 2008, Lyons held a press conference to issue a statement regarding PRC’s objection to her proposed bill. “This attempted interference by the People’s Republic of China in the democratic process in Vermont is alarming and threatens basic principles of our system of government,” Lyons said.
She further stressed that, “This is part of a disturbing trend toward undermining state’s rights. It’s simply not OK for other governments to feel that they have a right to intervene in our state legislative process in this way.”
Subsequently in fall 2008, in response to growing concerns, various calls were arranged between state legislators serving on the trade policy oversight commissions of Maine, New Hampshire, and Vermont, and then-Senior Director for TBT at USTR Jeff Weiss to discuss the notification process under the TBT agreement and its impact on state legislative authority. According to the legislators, “USTR has stated it will NOT notify [the WTO about] state laws, but rather if a notification is to be made to U.S. trading partners regarding the trade impacts of a new state law or regulation, that notification will be done at the administrative rule-writing phase.”
John L. Patrick, former Maine state senator, was one of the legislators involved in these conversations. At that time, he was House co-chair of Maine Legislature’s Citizen Trade Policy Commission. In an interview with The Diplomat in September 2021, Patrick shared how Hubbard and Lyons’ experiences raised red flags with and impacted the perspective of the Commission on state sovereignty: “It was enlightening to us. It was extremely eye opening to us that it happened then.”
Patrick recalled, “We were all in wonderment about, wow, here’s an example of what happened to another legislature, therefore we had to start looking at our bills to make sure [they] wouldn’t affect any foreign nation in an adverse effect, according to international trade agreements.”
“…[I]t changed the dynamics I think, not just in Maine, but other states as well when that happened.”
During those meetings, Weiss iterated that notification to the TBT comment mechanism of state proposed regulations had been inadvertent, and assured that his office would make modifications to procedures for notifying WTO about pending state legislation regulating trade in goods.
S256 did not pass in the 2008 Legislative Session, but in 2010, a similar bill concerning e-waste recycling that Lyons co-sponsored did pass and became law in Vermont.
The TBT Agreement: Foreign Governments and Local Legislation
It’s important to note that while PRC’s actions in the Maryland and Vermont cases disturbed legislators, under the WTO TBT Agreement, the United States federal government essentially agreed to allow Beijing – and any other government of a WTO member state – the opportunity to comment on pending state legislation that could impact WTO obligations.
“In general the open notifications process of pre-announcing of regulations being considered (to allow for public comment) is exactly the system that US trade negotiators have pushed for globally,” Dr. Chad P. Bown, a Senior Fellow at the Peterson Institute for International Economics (PIIE), told The Diplomat. “The concern is that sometimes local regulators (at the local, state, or federal level) are simply not aware of how they may be designing new regulations in ways that are inadvertently discriminatory and onerous, even if that is not their intention. So by demanding transparency and announcements before the regulations go into effect, it allows a lot of potential issues to be sorted out ahead of time.”
In one sense, then, the Maryland and Vermont cases are an example of federal-state frictions in the United States. As the interactions between Weiss and state legislators show, lawmakers at the state level did not appreciate the U.S. federal government giving foreign governments a chance to comment on pending state legislation. They pushed USTR for a change in policy.
After the meetings with Weiss, “I heard back from the Trade Representative’s office that they were working with China, to have China understand the role that USTR plays and the roles that states play, and our international trade work,” Lyons told The Diplomat. “They silenced the issues that China had brought forward and informed them that they could not intrude on our state process. After that, we didn’t hear from China and it has been very silent.”
In other words, Beijing’s use of the TBT mechanism is technically legal, even though state legislators felt threatened by it. However, it’s notable that, according to legislators interviewed for this story, the PRC was the only government to contact them in such a manner.
Drawing a Line: Legislators’ Thoughts
Today, Lyons is still serving in the Vermont State Senate as a legislator. When recalling the events from more than 13 years ago, Lyons noted that she actually did receive emails from Beijing about a BPA bill similar to the one introduced by Hubbard, and perhaps some other bills she authored that relate to toxic chemicals of concern as well. “But unfortunately I deleted them because I couldn’t read them and only saved the one regarding e-waste recycling when I finally realized what it was.”
“I heard from other state legislators around that same time, after I had been contacted by China, that they had also been contacted by China and they were so intimidated that they decided not to act on the bills that they had been contacted about, I think most of them were environmental regulations,” Lyons added.
Looking back at the incident, Lyons summarized her feelings: “We clearly could negotiate with China should we desire to do that, but having a Chinese government come in and tell us which bills we should and should not be working on is contrary to our federalist democracy.”
Lyons believed that the actions that she, along with other state legislators from Maryland, Vermont, and Maine, took back then have been effective in countering Beijing’s influence over U.S. state legislatures, at least over legislative measures that relate to public health and the environment. However, she remains concerned. “I would be concerned if China started to reach out through whatever medium to influence our work. I would be extremely upset knowing that any other government, any foreign government was attempting to intrude into our legislative process,” Lyons said. “The whole effect of another foreign entity coming into state governments has a significant chilling effect on legislators overall, and a chilling effect on democracy, because it doesn’t allow for us to participate under our own constitution and on our own interest at the state level.”
When asked if she had been contacted in a similar way by other foreign governments, Lyons said: “No, I haven’t. Not at all. Only China.” She further clarified:
There’s a difference between outreach and an attempt to advocate and influence against. What China did was clearly advocacy, against what we were working on, and they threatened us; they were saying that it’s going to destroy their whole electronics economy. If China reached out and said, “we want to show you the work that we were doing…” as members of our economic and commerce folks have gone to China to look at what’s going on and what kind of linkages can our state make with China, that’s completely different.
So it’s not a matter of, ‘it’s bad for them to reach out, it’s bad for us to have contact,’ it’s a matter that, what is the appropriate way to interact at the state level.
Former Senator John Patrick also noted that he doesn’t recall any other incident of a foreign country attempting to get involved in state legislative affairs during the 14 years that he served in the Maine House and Senate. “I think that China was the only one that went after state legislatures,” Patrick told The Diplomat. “To my recollection, of all the times that we were involved, and all the letters we had from the USTR and the like, I think that’s the only country that took that role.”
Regarding Chinese government’s attempts to influence legislative measures at the state level, Patrick thinks the PRC is “going to utilize their resources to make sure states don’t over step their bounds in regards to making legislation that could adversely affect them.”
“But that’s not necessarily good for individual states because individual states’ responsibility is to take care of their citizenry….”
When asked for his opinion on what distinguishes appropriate and inappropriate foreign government outreach to a state legislature in the U.S., Patrick said: “If they [foreign governments] get into the legislative process, trying to get us to pass laws that are beneficial to a foreign country, then that might be crossing the line.”
The experiences of Hubbard and Lyons is a unique example of China intervening in state legislative affairs. In these cases, officials in Beijing were utilizing a legal mechanism under the WTO to make their views known on trade issues.
Things become more murky when the PRC exerts its influence not through legal mechanisms but through attempts to bully or threaten legislators into changing proposed measures – even non-binding resolutions that serve as a form of political speech. And it is unsurprising that Beijing is more likely to take these hardline tactics when issues related to its “core interests” are touched upon. The next and subsequent articles will explore the more problematic ways the Chinese government sought to interfere with the democratic legislative processes of U.S. states, starting with its lobbying against a resolution in support of Tibet in 2009.
Editor’s note: This article is part of an ongoing series published by The Diplomat on “How China Influences Measures and Interferes in Democratic Processes of U.S. State Legislatures.”