Nation-State Boundaries are Becoming Obsolete - Essay Example

Nation Boundaries are Becoming Obsolete Should we Rejoice over this Process Introduction The end of the twentieth century is a period characterized by rapid and unprecedented change. As Smith and his colleagues (1999, p.1) discuss this idea, not only is our world becoming increasingly interdependent, but the nature of fundamental relationships between its parts are changing - and at an increasing pace. Smith and his colleagues continue that the unprecedented volume and velocity of international flows of trade, investment, information, cultural exchanges, and human migrations are creating a new, more tightly integrated, world and one that seems to be in the throes of some fundamental structuring (Smith et al. 1997, p.1). Many professionals ranging from commentators to journalists, from politicians to scholars across all disciplines, have tried to describe and analyze this phenomenon and tend to agree that "globalization," along with the halt of the Cold War, has radically changed the basic "rules of the game" for a variety of key factors, particularly states (Smith et al. 1997, p.1). With the onset of this "globalization" and transnational companies, there have been long debates about the relationship of so-called sovereign states to each other (Wallerstein 1999, p.20). Wallerstein (1999) states that views range from those who emphasize the effective sovereignty of the various states to those who are cynical about the ability of so-called weak states to resist the pressures (and blandishments) of so-called strong states. Krasner (1999, p.34), on the other hand, reports that some analysts argue to the point that the world is entering into a new era, one in which the existing institutional structures, especially the sovereign state (by which they often mean several different things) is being undermined weakened, marginalized, or transmuted, by globalization. Globalization and Sovereignty Defined According to Krasner (1999, p.34-35), globalization can mean some mix of developments that might include the legitimization of human rights, the digitalization of transactions, the speed of communication, the density of global non-governmental organization (NGO) networks, the transmission of diseases, the growth of international capital markets, the surge of manufacturing in geographically dispersed areas, the universal availability of MTV, the increase in illegal migration, legal migration, and the like. Most analyses that emphasize the growing importance of globalization point to the transformatory nature of modern technology e.g. costs of communication and transportation have plummeted. Kelleher and Klein (1999, p.146) defines sovereignty in that "states accept no political authority as superseding their own." According to the principle, no international institution has the right to determine the laws and policies that apply to people within the borders of any sovereign state. Sovereignty, then, has the effect of designating government as the sole representative of the population of a state (Kelleher and Klein 1999, p.146). Krasner (1999, p.35) also provided that the term sovereignty has been commonly used in at least four different ways: 1. Interdependence sovereignty has referred to the ability of a government to actually control activities within and across its borders (including the movement of goods, capital, ideas, and disease vectors). 2. Domestic sovereignty has referred to the organization of authority within a given polity. 3. Westphalian sovereignty has referred to the exclusion of external authority; the right of a government to be independent of external authority structures. 4. International legal sovereignty has referred to the recognition of one state by another; some entities have been recognized by other states; others have not. Recognition has been associated with diplomatic immunity and the right to sign treaties and join international organizations. Globalization: A Threat to Sovereignty According to Krasner (1999, p.36), many observers have suggested that the increase in globalization is a threat to sovereignty. He asserts that these people mean that the state is losing control over certain activities but some of these people have at least hinted that this could lead to changes in authority structures as well. Richard Cooper (1968) in his study, The Economics of Interdependence, points out that capital mobility was undermining the ability of the states to control their own domestic monetary policy.1 Noam (1987, p.44) adds that "in the long run telecommunications will transcend the territorial concept and the notion of each country having territorial control over electronic communication will become archaic in the same sense that national control over the spoken (and later the written) word become outmoded." Meanwhile, Jean Rosenau (1990) asserts that new issues have emerged such as "atmospheric pollution, terrorism, the drug trade, currency crises, and AIDS' that are a product of interdependence or new technologies and are transnational rather than national. He further asserts that states cannot provide solutions to these and other issues (Krasner 1999, p.37). However, Krasner (1999, p.34) believes otherwise. He claims that sovereignty is not being fundamentally transformed by globalization. Globalization, he asserts, has challenged the effectiveness of state control and has not qualitatively altered state authority which has always been problematic and could never be taken for granted. Thomson and Krasner (1989) support this view in their study, Global Transactions and the Consolidation of Sovereignty, in that the argument that globalization meant the attrition of sovereignty has two defects: first, that it confounds one meaning of sovereignty - effective state control - with other meanings of sovereignty that are related to issues of authority and legitimacy; second, globalization arguments are historically myopic, sometimes implicitly assuming some golden age in the past where states could exercise effective control, and ignoring the fact that many measures of international flows were as high at the end of the nineteenth century as they are now. It is not self evident that contemporary environment poses qualitatively different challenges to state control. Meanwhile, Eric Helleiner (1989, p.138-157) studied if financial globalization is undermining the sovereign state and reviewed the following existing arguments on the matter: 1. Walter Wriston (1986; 1988; 1992) argues that states have a declining capacity to regulate finance because of technological changes (e.g. information technology revolution) that have propelled the globalization trend. Once the states have lost their ability to regulate finance, they have lost a central aspect of sovereignty which is the ability to control the value of their currency. 2. Phil Cerny (1995) challenged that the increased mobility of financial capital has let loose powerful competitive deregulation pressures that hinder states from considering regulations in the financial sector such that states are forced to lower regulations in order to ensure that mobile financial capital and business is attracted to and kept in their own markets. 3. Due to increased financial capital mobility, the ability of sovereign states to impose an independent macroeconomic policy are undermined e.g., independent tax policies are seen to be more difficult as individuals and corporations evade domestic taxation by moving assets abroad (Helleiner 1999, p. 145).2 4. Saskia Sassen (1996) argues that Euromarkets brought about by globalization challenge the sovereign state by acting as locations within national territories that are created deliberately beyond its regulatory limits to service the global economy. In the words of John Ruggie (1993), these financial activities in these Euromarkets challenge the sovereign state by acting as locations within national territories but "are to exist in an extranational realm." Helleiner (1999, p.154) evaluates that the first three arguments overstate the extent to which financial globalization has actually eroded state power either in the macroeconomic realm or the regulatory sphere. Helleiner claims that even if financial globalization was undermining state power in the ways the first three arguments suggest, this would not necessarily indicate support for the case that the sovereign state is eroding. This is because of a second weakness in the arguments presented: they lack a long historical perspective on the world-order transformations that these arguments analyze. Helleiner continues that this weakness "is especially evident when these arguments employ indicators such as 'declining regulatory power' and eroding macroeconomic policy autonomy' to measure the decline in the sovereign state. However, Helleiner acknowledges that the indicator used in the fourth argument as a measure in the decline of sovereignty - territoriality - is one more widely accepted by historians of the sovereign state. Decline in Sovereignty due to Global Trade3 The Australian government has adopted the "free trade" agenda as the country's dominant economic policy. Although Australia is considered as among the developed countries, its global trade flows are comprised by primary commodity (mostly agricultural and mineral products) exports and manufactured product imports. Australia has been a party to at least two (2) World Trade Organization (WTO) dispute resolution cases that have an impact on the ability of countries to provide for regulatory measures to protect human and environmental health and safety: i.e., Canadian Salmon imports case4 and the Howe Leather case.5 Friends of the Earth (FoE) Australia's identify that the two cases point out that: (1) current WTO rules have the potential to limit the ability of the Australian government, and its states and sub-national governments, to impose regulatory measures on imports in order to protect native flora and fauna, and (2) current WTO rules limit the scope of action of the Australian government in providing for governmental support to sustainable local industries (FoE 2001, p.5-6). In Bangladesh, FoE Bangladesh argues that Bangladesh's international economic policy was determined by the fact that the country was the subject of International monetary Fund (IMF) structural adjustment programs in the 1990. Because of the IMF structural adjustment program and World Bank loan conditionalities, Bangladesh also had to reduce the tariffs that it imposes on imports of agricultural products, and the removal of domestic supports and export subsidies for its farmers and fisherfolk. This despite the fact that in the WTO, Bangladesh, as a least-developed country, has the option not to make such reductions or removals (FoE 2001, p.6-8). Like Bangladesh, the economic policies of the Philippines were determined in large part by the pressure of IMF structural adjustment programs and World Bank conditionalities. WTO commitments have also, since 1995, played a large role in shaping the country's economic policies. As a result of these commitments, the Philippines enacted and is implementing laws that: 1. promote export development as the key towards national industrialization 2. abolish quotas and other quantitative restrictions on agricultural exports 3. reduce tariffs on agricultural and industrial imports to 5% by 2004 4. provide national treatment in the protection accorded to foreign-registered intellectual property rights 5. shift agricultural and fisheries production from traditional domestic food production to becoming oriented towards large-scale commercialization and exports and "global competitiveness' 6. increased foreign investor access o various Philippine natural resources - i.e., minerals, forest, fisheries 7. opened up key economic sectors to foreign competition - i.e., retail trade. The pressure to "compete" globally and export more has also provided the political drive among Philippine policy-makers to seek to effect changes in the country's Constitution. As it stands, the Constitution provides for a strong nationalist, pro-Filipino, and protectionist economic policy that, in many ways, are at odds with the country's WTO treaty commitments (FoE 2001, p.9). The Friends of the Earth further asserts that its case study in the Philippines is a prime example how IMF and WB policies and conditionalities, and WTO treaty commitments can force a developing country to enact and implement laws and policies that, in the long run, result in environmental degradation, resource conflict, poverty and inequity, and local community marginalization and displacement (FoE 2001, p.10). The Role of National Governments: Conclusion If indeed the sovereignty of the state is challenged by globalization, how can still the government use its sting According to Langhorne (2001, p.23), in an age when the communications revolution has allowed manufacturing to be located anywhere on the globe, the role of a government, though it is reduced in terms of its macroeconomic decision-making capacity, remains significant, and is even enhanced in respect of the policies it adopts which create encouragement for global companies to locate part of their operation within its borders. Laghorne continues that it is the task of the governments to make the global system work both better and more acceptably such as the facilitators of efficient factor and product markets or serve as guardians of the legal and commercial institutions underpinning global markets as well as the rules and standards that overarch market transactions. Finally, Laghorne indicates that the government's representative capacity remains important as they have the principal means of protecting national economic interests at international meetings of states, such as the World Trade Organization or the International Monetary Fund (2001, p.26-27). Krasner (1999, p.48-49), meanwhile, takes another positive look on globalization and on the role of the government. According to Krasner, if anything, globalization has made international sovereignty more important. He notes that the number of international agreements and organizations has proliferated in the last few decades. Many of these agreements, Krasner believes, represent efforts to capture the benefits of globalization and compensate for the loss of national control (italics mine) by establishing new coordinating and regulatory mechanisms at the international level. Krasner also believes that World trade Organization can be seen in this light but also acknowledged that with the opportunities that technology has opened up, these opportunities have increased potential conflicts over issues such as market access and financial services, among others. This becomes the qualifier as to why states entered into international agreements in which they constrain their own freedom of action in exchange of similar commitments offered by others. Moreover, Krasner stresses that it is the states, not multinational corporations, non-governmental organizations, or foundations that enter into these international agreements. If viewed from the perspective of international law, these agreements enhance rather than undermine (italics mine) sovereignty. Indeed, the agreements would be impossible in the first place if states did not mutually recognize their capacity to enter into them (Krasner 1999, p.48-49). References Cited Cooper, R 1968, TheEconomics of Interdependence: Economic Policy in the Atlantic Community, McGraw-Hill, New York. Friends of the Earth International (FoEI) and Legal Rights and Natural Resources Center - Kasama sa Kalikasan (LRC-KsK) 2001, Globalization, Trade, and the Peoples of Asia and the Pacific: Case Studies from Australia, Bangladesh, Indonesia, Japan and the Philippines, FoEI and LRC-KsK, Philippines. Helleiner, E 1999, 'Sovereignty, Territoriality, and the Globalization of Finance' in D Smith et al. (eds), States and Sovereignty in the Global Economy, Routledge, USA and Canada, pp. 138-157. Kelleher, A & Kelin, L 1999, Global Perespectives: A Handbook for Understanding Global Issues, 2nd edn, Rowman & Littlefield Publishers, Inc., United States of America. Krasner, S 1999, 'Globalization and Sovereignty' in D Smith et al. (eds), States and Sovereignty in the Global Economy, Routledge, USA and Canada, pp. 34-52. Langhorne, R 2001, The Coming of Globalization, Its Evolution and Contemporary Consequences, Antony Rowe Ltd., Great Britain. Noam, E 1987, 'The Public Telecommunications Network: A Concept in Transition', Journal of Communication, vol. 37, no. 1, p.44. Rosenau, J 1990, Turbulence in World Politics: A theory of Change and Continuity, Princeton University Press, Princeton. Schaeffer, R 2003, Understanding Globalization: The Social Consequences of Political, Economic and Environmental Change, Prentice-Hall, Inc., New Jersey. Smith, D, Slinger, D, & Tpoik, S 1999, 'Introduction' in D Smith et al. (eds), States and Sovereignty in the Global Economy, Routledge, USA and Canada, pp. 1-19. Wallerstein, I 1999, 'States Sovereignty The dilemmas of Capitalists in an Age of Transition' in D Smith et al. (eds), States and Sovereignty in the Global Economy, Routledge, USA and Canada, p.20. Read More