Trade liberalisation, globalisation and the nation-state: The attrition of sovereignty

The idea of states as autonomous and independent entities are collapsing under the combined onslaught of international non-governmental organisations and regional institutions

The National Assembly ratified an economic Partnership Agreement between Kenya and EU.

By Ian J. Ondari

“We live in a globalising world. That means that all of us, consciously or not, depend on each other. Whatever we do or refrain from doing affects the lives of people who live in places we’ll never visit” – Zygmunt Bauman

From the ashes of the Second World War was increased impetus for accord, to re-form the global order in a manner that would prevent return to the financial instability and trade bloc rivalry that had led to the outbreak of war.

The then economic powerhouses, and de-facto superpowers (Allied Nations) led by USA and Britain, agreed that this would be achieved through a stable multilateral trading system, an undertaking whose climax was the Bretton Woods Conference (United Nations Monetary and Financial Conference) in 1944.

The Allied Nations signed the agreements, which created the International Monetary Fund (IMF) and International Bank for Reconstruction and Development (World Bank). The Conference set the pace for enhanced trade liberalisation by encouraging open market policies.

This setting of minimum standards for international commerce is a facet globalisation. Aside from the economic advancements, diffusion of modern communication technology has enhanced the elimination of geographical limits. Globalisation is responsible for improved relations between societies and governments. In sum, the reality is now that change at this end of the world equally influences a section of that end of the world.

Impact on developing economies

Perhaps no one has been at the sweet end of the stick of a streamlined global trading system like developing countries. Why? Consider increased access of their surplus goods and services to foreign (developed countries) markets, non-discrimination of these exported goods in the domestic markets of importing countries, reduction of trade barriers to goods, access to the financial services provided by international monetary institutions… name it. Thirlwall (2003) contextualises this interdependence as one where, “developing countries depend on developed countries for resource flows and technology, while developed countries depend heavily on developing countries for raw materials, food and oil, and as markets for industrial goods”.

Reciprocally, as developing countries, Kenya included, we are bound to the principles of international commerce; non-discrimination, and freer trade through reduction of trade barriers, which may either be imposed by internal taxes and policies and transparency. The domestic economy, in return, is booming with increased Foreign Direct Investment (FDI) – in 2015, the FDI inflows stood at Sh115 billion, according to the African Outlook Survey. Likewise, local consumers have a greater variety of choices normally at lower prices, growth and improved productivity and improved living standards.

It is no secret that globalisation has created opportunities for developing countries. But, it has also been argued, by many competent economists, that globalisation harbours negative consequences. These identified challenges have to deal with environmental deteriorations, instability in commercial and financial markets, and increased inequity across and within nations. Simply put, the benefits of globalisation are not universal.


Conceptually, State sovereignty is a triad consisting absolute authority over internal matters, and the right to govern its citizens; this should be achieved within an independent environment distant any from external influence. In this sense, the State is the final and peak authority in the world of independent states, signifying both the right and power to act (self-determination). The attaching obligation is that a state has no right to command another sovereign (state). Contrasted with independence, sovereignty can only be achieved through recognition by other sovereigns.

The Westphalian Model conceives a state as the right to self-determination and sovereignty of a nation, which permits the state to become the ultimate decision-maker within its territory. On the other hand, Aristotle, in an almost futuristic fashion, appreciates the state as arising to cater to not only for the satisfaction of economic needs but also for regulation of the full human potential, which was only possible within the polis (the most sovereign association offering self-sufficiency).

Professor Zygmunt Bauman, a stellar Polish sociologist, and in my opinion the greatest philosopher of our times, furthers this debate of sovereignty attrition when he states: “We’re still in the age of Versailles, when the principle of each nation’s right to rule was established. But that’s a fiction in today’s world.”

Now, Prof Bauman is well known for his criticism of politics, which, according to him, has failed to meet people’s expectations. Power and politics, in his opinion, are entwined; failure arises from the contemporary nation-state’s inability to decide what is to be done because “the marriage between politics and power” has been severed due to the globalisation of power. His coup de grâce is a submission that, “our democratic institutions were not designed for dealing with situations of interdependence”.

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