Alazar Kebede International Economic Law can simply be defined as laws in which international trade operations are governed. Two features have characterised International Economic Law during the recent period of rapid and seemingly unrestrained economic globalization: its emergence as the most important field of international law and its close association with the ruling paradigm of development, as embodied in the celebrated Washington Consensus. The fact that developing countries have not played a major role in shaping the form and content of International Economic Law rules is not surprising. After all, they have never played a major role in shaping events in the world economy. In recent years, however, developing countries have been under enormous political and economic pressure to ‘globalize’, and International Economic Law rules have played a crucial role in this process. The problem, however, is that many of the new International Economic Law rules have come into being through mechanisms such as conditionality that do not fit comfortably with the traditional notion that binding rules of international law are created by the consent of states. Also, many of the new International Economic Law rules have penetrated so deeply into the fabric of what has previously been considered the domestic jurisdiction of states (the issue of policy space) that questions are rightly raised about the impact of globalization on the foundations of international law and state sovereignty. These questions have been widely debated among social scientists and legal theorists and no consensus has yet emerged on this issue. The impact of globalization on state sovereignty has been noted by most international relations specialists, political economists and international lawyers. As the Award winning American journalist Thomas Friedman well explained, while economists do not generally address issues relating to international law or state sovereignty, some ideologues of globalization regard the advent of globalization as inevitable, thus highlighting the economic logic of this process while downplaying the role of international law and political bargaining. Political scientists and lawyers skeptical about normative concepts such as sovereignty argue that the focus for a proper understanding of the world economy should be on the political and economic interests of the leading players in the world economy, rather than on empty normative concepts. Those who hold this view about international relations are also skeptical about international law and, as a consequence, are not overly concerned about the impact of globalization on its foundations. There are, of course, many social scientists who take more seriously the impact of globalization on sovereignty and international law. Within this group, some regard globalization as a positive factor insofar as it may be the prelude to a world order in which citizens are part of a larger cosmopolitan order. These theorists, however, do not address difficult issues such as the sources of law or the structure of the institutions in the new cosmopolitan order. Theorists who take a less sanguine approach to the current process of international economic norm setting describe the process as coercive socialization, neo- colonialism, or simply a new form of imperialism. International lawyers have adopted a variety of approaches to interpret and conceptualize the impact of globalization on International Economic Law and international law generally. Most of these approaches have been pragmatic insofar as they attempt to incorporate the momentous changes that have taken place in recent years into the current international law discourse. Jose Alvarez, a noted economist, for example, in an extremely well- documented study, provides unambiguous evidence that, in recent years, international organisations have taken an expansive and often careless approach to the creation of international law rules and notes that this process is effectively changing the meaning of national sovereignty. Some international lawyers, observing that globalization has undermined the old- fashioned, state- led diplomatic process for making and interpreting international law, have opted for pragmatic solutions that change the focus of analysis. Thus, Anne Marie Slaughter, a well known International Law scholar, for example, points out that the role of established professional diplomats has now been taken over by governmental and non- governmental experts who are controlling and driving the process of norm creation at the international level. Not all lawyers, however, take such a complacent view. Ernst- Ulrich Petersmann, for example, is keenly aware that the legal and political foundations of the current process of economic globalization are weak. Noting that there is a manifest incoherence between the principles of the WTO that focus on free trade and some international human rights instruments that have a distinct anti- market bias, he calls for a radical approach to ensure simultaneous and timely respect of all human rights – economic, political and social, both at national and international levels. He calls this approach multi- level constitutionalism and argues that in order to achieve it the international community should adopt the European Union’s approach to economic integration. Most international lawyers have focused their attention on rationalizing and explaining international legal development and have refrained from directly addressing the delicate question of state sovereignty. A more qualified defense of sovereignty is offered by John Jackson, a leading International Economic Law specialist. He argues that sovereignty should be renamed and redefined. He proposes to call it ‘sovereignty modern’ so as to take into account the fact that not all contemporary rules of international economic law can trace their origin to the consent of states. For others, Jackson’s argument, though interesting, is unpersuasive. They argues that he does not clearly explain which international rules do not require the consent of all the states, nor does he explain where and how these rules originate. Regardless of whether political or legal theorists welcome, or deplore, the demise of national sovereignty, they all seem to share the same assumption: that current International Economic Law rules are part of a comprehensive and coherent system of rules. In formal terms this assumption is reasonable because most of the new rules of International Economic Law are consistent with the principles of the Washington Consensus. Yet, on close inspection the new rules of International Economic Law are more fragile, less predictable and not as uniformly applied as either pro or anti-globalization activists or scholars assume. Indeed, a close analysis of the application of International Economic Law rules would probably show that, at the point of implementation, the variety of increasingly intrusive forms of international regulation are either ineffective or their implementation is partial and selective. The fragility of international economic law rules stems from the absence of adequate international institutions with the capacity to transcend genuinely the narrow political and economic interests of the leading actors in the world economy. In the absence of a strong international institutional framework, International Economic Law rules are subject to the political and economic vagaries of powerful nation states. Thus, International Economic Law rules have not gone far enough because they are not embedded within a coherent system of international institutions. This may greatly facilitate the renewal of International Economic Law rules once market fundamentalism, as embodied in the Washington Consensus, gives way to another development paradigm.

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