Territorial sovereignty, equality of states, non-intervention in domestic affairs and state consent as the basis of international legal obligation were the central doctrines of the nineteenth century. Each focused on inter-state relations. Constitutio-nal issues concerning relations between citizens and government were for the most part set aside, allocated to national law.
Indeed, the traditional international system has often been referred to as the individual nation-state system after the Treaty of Westphalia of 1648, which recognized the state as the supreme or sovereign power within its boundaries.
External interferences were not allowed to affect domestic affairs and sovereignty was the supreme principle of the nation-state system.
The process of modernization affects people's values, in particular, their attachment to economic welfare. Connected to the process of modernization are the spread of democracy and an increase in economic interdependence. In order to ensure democracies remain the mainstream of world politics, nations-states are ambitious to promote trade interdependence and develop a prosperous world economy.
Having suffered the damage of two world wars, humankind has engineered international organizations to provide a fabric of global security (the UN) and economic prosperity (the WTO). Thus, WTO was set up with a mandate designed to integrate diverse economies in a new era of globalization. Although international law has been an excellent framework under which human rights law, self-determination and minority rights protection have flourished, it has failed dismally in its principle of being neutral and non-interventionist in matters of domestic policy.
The role of a nation-state has been eroded and that of non-state players has prospered. Increased international economic ties exist at many levels involving trade, foreign investment and finance, promoted by a growing acceptance of liberal economic policies.
One impact of these trends is that states are losing their degree of autonomy in managing their domestic and international economic policies because of both the intensity of the interdependencies and the development of explicit and implicit regimes.
The other impact is that the growth of international organizations, both in terms of their number, and power, is increasingly influencing policy-making.
The WTO's purpose was to set up norms and rules that would govern increasingly interdependent economies. The expansion of trade will develop if states pursue a policy of lowering trade barriers.
A principle of inter-state trade management stresses that states are committed to exploiting their comparative advantages while at the same time trying to avoid serious instability in their balance of payments sheets.
Also, the increased role of multinational corporations in the world economy and especially in the trade area has been seen as an important prop to trade liberalization. In a world where managed trade is growing in importance, there will be more violations of global WTO rules, but they still provide an important framework within which states formulate their trade policies.
An important issue is whether states are going to lose significant control of international economic transactions and hence decline as the key players in international relations.
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