Impact of Globalisation on State Sovereignty

On the 23rd of June 2016 the UK voted to leave the European Union. Few weeks later i was in a classroom full of bright minds debating the upcoming US presidential election. The lecturer was not shy of her anti-Trump views. A stunning young liberal professor lecturing us on political norms, ethics, conventional wisdoms and the art of leading. As the debate intensified she asked for a show of hands on wether we thought Hilary Clinton was going to defeat Donald Trump to become the first female president in the history of the United States. Almost everyone raised their hands immediately. I looked around the room and thought to myself, ” stick to what you know, do not mix politics with personal feelings and simply be honest”. 

Two weeks later i had to present my views in front of those who disagreed. My argument was not designed to hail a specific idea or personnel, but rather explain why i thought voters were going to go the way they did.

With the growth in free trade, which has been facilitated by globalization, business organizations and governments are reaping substantial benefits. In general, globalization has facilitated the transfer of products, information, capital, and people across borders, thereby enhancing economic development in countries. Even so, one of the negative impacts of globalization is the perception that it weakens state sovereignty, which is understood as a government’s ability to be in command of activities within as well as beyond state borders. The globalization process, which is partly manifested through free trade, is believed to have jeopardized the sovereignty of nations by limiting the freedom with which governments can exercise their democracy.

Globalisation and sovereignty

Globalisation has created new regulations by which states must abide in order to reap maximum benefits from international transactions. This is clearly seen in the so-called transnational financial organizations, free trade treaties, and military alliances, which reduce the authority of nation states. Using the World Trade Agreement (WTO) as an example, it can be seen that the power of nation states is greatly reduced as the WTO holds supreme power to rule against national legislatures when it comes to trade issues. In the same way, globalisation has given rise to a body that is known as international community, which enjoys exclusive rights of intervening in a country’s domestic affairs where it is perceived that the national government is not able or willing to fulfil its primary obligation of protecting citizens against crime, genocide, and ethnic cleansing.

Globalisation has given rise to global legal provisions that compel states to protect fundamental civil rights so that universal interests of humanity are safeguarded. This is the kind of encroachment that East and Robertson (2012) call economic constitutionalism, which fragments political authority of nation states.

The movement to international competitiveness has weakened the ability of governments to be in control of domestic economic activities. Globalisation simply means that all national economies are integrated into a single economic system, implying that the economy of any given country is largely shaped by external factors. Consequently, states have little say in dictating the norms as well as rules that govern trade. Instead, states are expected to adhere to the rules set by the existing economic regimes. The emergence of independent institutions as a result of globalisation has also affected the jurisdiction of governments concerning trivial matters such as border disputes. It is common to find such disputes being handled by the International Court of Justice.

The rapid rate at which the movement of goods, ideas, people, and capital takes place across borders affects state sovereignty. In most cases, this transfer occurs very rapidly, thus limiting the degree to which governments can control the populations that move within national territories. Similarly, this rapid transfer makes it quite difficult for governments to speak on behalf of their citizens. Still on the issue of migration, globalisation has created a diverse body of citizens, which makes it almost impossible for governments or states to enjoy cultural unity. To be precise, movement of people across nations takes place so rapidly that very few people understand their national identity. As result, the traditions of nations are threatened.

International trade demands that actors adopt “common models of modernity”, which implies that nations must lay aside their local cultures. On a different note, immigration threatens national identity in the sense that immigrants increase competition for semi-skilled jobs. Additionally, immigrants disproportionately claim welfare benefits, besides occasionally demanding cultural as well as linguistic accommodation. These facts among others led to a movement of unwavering resistance which resulted in the Brexit vote, Donald Trump winning the 2016 US presidential election as well as similar movements in countries across Europe.

Globalisation is used as a tool of spurring democratization together with political liberalization. International organizations along with civil movements have resorted to globalisation as an effective avenue of exerting pressure on non-democratic governments. The political change that has been witnessed in countries in the Pacific Asian region for example is largely a result of globalisation. In other words, the concept of free trade is used to entice or coerce governments to adopt democratic governance as a prerequisite for nations to take part in international trade. In this light, it can be said that some governments do not embrace democracy out of their own free will, but rather as a condition for economic development. As such, it is right to say that governments have no option but to embrace democracy if they hope to enjoy the benefits of free trade.

Globalisation creates an intricate network that compels states to dispose a significant portion of their sovereignty to interstate alliances along with supranational bodies. It is believed that since the First World War ended, a significant number of states have expressed willingness to dispose their sovereign powers, allegedly in order to enjoy the benefits that come with such an action (Grinin, 2012). This is far from the truth, as it is reported that the act of disposing some of a nation’s sovereign rights is a requirement in global trade (Albekov, Polubotko & Akopova, 2014). Practical examples of the extent to which state sovereignty is compromised in international trade include human rights issues, foreign policy, and economic policy. Regarding the latter, it is noted that nation states are forced to encourage foreign investment by easing the policies regarding export tariffs. Any nation that does not lower its export tariffs places itself at a risk of experiencing painful retaliation. This clearly indicates that globalisation has created strong market forces that limit the freedom of states to impose their own rules regarding conduct of cross-border trade.

With the integration of the world into a single economy, new regulations have been established in the name of creating universal obligations that will guide nations in protecting their citizens. Popularly known as international law, these regulations have reduced nation states’ ability to exercise their sovereignty when it comes to making laws.

Globalisation encourages capitalism, which makes it difficult for nation states to pursue self-regulating macroeconomic policies. A good illustration is the inability of nation states to control currency value in international trade. As a result, nation states have limited power to respond to currency fluctuations by expanding money supply. On top of this, the pressure on nations is intensified when international markets impose constraints regarding fiscal policy, thus affecting the ability of nation states to establish domestic policies regarding the sale of financial securities in the international market.

Much as the foregoing arguments give the impression that the sovereignty of nations has greatly been affected by globalization, The sovereignty of any nation cannot possibly be replaced by a single government or world system. Even so, the truth is that the global economy that shapes and guides international trade threatens state sovereignty by giving heightened powers to international institutions, thereby reducing the independence of nation states.

The issue of globalisation and the impact it generates on the sovereignty of nations is a contentious one. On the one hand, there is the claim that globalisation actually boosts sovereignty in terms of encouraging democratisation. On the other hand, there are those who strongly believe that globalisation is a threat to state sovereignty. This latter position appears weightier considering that free trade, which is an outcome of globalisation, limits the independence of nations in terms of making macroeconomic policies. In addition, The international laws that have been established to guide cross-border trade are a threat to state sovereignty because they limit the extent to which states can enact self-governing rules. Whilst it is true that no international organisation can fully take the place of nation states, the role played by these organisations, along with the heightened powers given to them, limit the power of states to exercise autonomy in political and economic matters.

Written by mohammed mahfoudh

مجرد كاتب .. أرى هذا العالم بمنظور خاص قد يكون مختلف بشكل نسبي عمّن حولي .. أعشق القراءة و الكتابة عن مواضيع كثيرة من بينها علاقات الدول السياسية الإقتصادية، التغيرات المناخية و تأثيرها على الإقتصاد العالمي و الحياة على كوكبنا الأزرق بشكل عام .. أسافر كثيراً للتعرف على ثقافات مختلفة عن ثقافتي و ثقافة المجتمع الذي يحيط بي .. أعشق المغامرة إلى حد بعيد و أسعى دائماً لاكتشاف المزيد من الحقائق .. أزاول الرياضة و أسعى دائماً لتشجيع من حولي لدخول قوقعة النشاط التي أعيش بداخلها.

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