The January issue of Governing magazine has an interesting, though brief, article about certain states' unwillingness to go along with federal trade pacts, like the in-negotiation Central American Free Trade Agreement:
A handful of governors and several legislators are concerned that free-trade pacts abrogate a state's right to make purchasing decisions based on environmental, labor or health and safety concerns–anything, in other words, besides the lowest price.
The issue surfaced in 2003 when the U.S. trade representative sent a
letter to governors asking them for carte blanche in negotiating
purchasing rules with other countries. Twenty-eight signed on, but now
governors in seven states have changed their minds and a number of
legislators in those and other states have become critical of the
pacts' effect on purchasing.
"The states have been using their purchasing power rather than the
heavy hand of regulation to take the lead in both the human rights and
environmental movements," says Robert Stumberg of Georgetown
University law school. State officials, he says, are concerned about
having to comply with trade-pact procurement rules even before those
rules have been negotiated. As an example, Stumberg says that the
ability of states to decide not to buy from companies that take part
in shocking forms of child labor is threatened by trade pacts.
Like most short-form journalism on incredibly complicated regulatory topics, this piece doesn't answer all the questions one might have–there's a reason "trade lawyer" is a specialized and often lucrative profession–but it's worth checking out for devotees of the twists and turns of international managed trade.