The Compact Clause is one of the clauses in the United States Constitution.  According to the Compact Clause no state can enter into “any Agreement or Compact with another State, or with a foreign Power” without approval from Congress.

Courts and the US government do not treat the Compact Clause literally.  States can enter into agreements with each other without Congress’s approval, provided the agreement does not interfere with the federal government’s ability to perform its job.  For example, let’s say State A and State B decide to work together to fight fires that can threaten both states.  Congress does not have to approve the agreement.  Even agreements with other countries often do not get attention from the federal government unless they interfere with the US government’s ability to conduct foreign policy.  

On a side note the Compact Clause, as I recall, tends to get little attention in law school and on bar exams.  If anyone has a different experience, let me know.