Globalization involves making deals with the rest of the world. The power to make such deals is usually vested solely with the central or federal government. However, it is mainly the sub-units or states which feel the effects of globalization. Multilateral trade regimes like the WTO can often pit the Centre against the states.

Dr. Kripa Sridharan, Department of Political Science, National University of Singapure

Several complex issues arise from globalization-induced changes in the conduct of foreign policy in federal systems. How should these affect the conduct of foreign policy and how do the states get their concerns incorporated in foreign policy? In India the states have become more important because of the coalition government’s dependence on regional parties and liberalization, which has provided unforeseen opportunities to them. The resulting transformation has been variously characterised as perforated sovereignty, paradiplomacy, constituent diplomacy and foreign policy localization and it is clearly noticeable in the substance of foreign policy. The basic outcome is that the federal or central government’s power to make external treaties is no longer as unfettered or complete as it used to be. The impact of this has not been studied in detail so far.

Foreign policy is no longer all that different an area of governmental activity and since it is so intertwined with domestic policy multiple actors (the states) have gained an interest in determining it. Articles XXII to XXIV of GATT, for example, stipulate that each signatory is duty-bound to ensure that the states comply with all the provisions. But the latter are not always amused. They exert pressure on the national government from below for changing the provisions. One immediate consequence of this has been that, whereas earlier the friction between the central or federal government and the states used to be over domestic issues, now they spill over into foreign policy issues as well. Thus, a couple of years ago, the US government asked the US Supreme Court to intervene to prevent Massachusetts from enforcing a legislation that barred companies to do business with Myanmar. The Court said that the state legislation was unconstitutional because only the federal government could determine foreign policy.

Similar problems have arisen in other countries with federal systems as well. Even Indian states are beginning to make a push in this direction. Does this mean that a nascent sub-national assertion is evident in India? If so, why now and how does one identify it? The key problem is that although several states are very reform-oriented and progressive, they do not have the power to make global deals. The problem becomes even more pronounced when the same party does not rule at the Centre and the states. Add the coalition phenomenon and you begin to get an idea of the complexities that will arise in conducting foreign policy. In India the problem has been compounded by the fact that most states are clueless about these things – even when the constitution gives them the sovereign right to make policy under the states list. In effect, the WTO treaty has transferred the prerogatives enjoyed by the states to an external entity. The state governments found themselves in a fix since they are now compelled to honour obligations that they were not sounded about prior to India’s accession to the treaty.

The result is that the Centre has had to show some flexibility. Aware of the general unhappiness of state governments, which do not have a veto but can become a considerable nuisance, the Centre has begun to involve them more in the conduct of foreign economic policy. Though relatively modest in themselves these gestures are significant in the Indian federal context. Their entitlements beyond the domestic arena are now acknowledged; the states have drawn important lessons and begun insisting on more transparency; and the Centre can no longer hide behind the formal constitutional provision regarding its treaty-making power by doing it alone.

In this paper, I have dealt only with external economic issues and commercial diplomacy. In fact, the states may begin to influence non-economic issues as well. The first test of this proposition will be Kashmir, which finally has a reasonably representative government. It will almost certainly want to have a say in the manner in which the Centre approaches the diplomacy surrounding Kashmir. Much the same thing might happen ? if it has not already ? in the case of Tamil Nadu and Sri Lanka as well, not to mention West Bengal and Bangledesh, UP and Nepal, and the Northeastern states and Myanmar to name just some of the bigger examples. These also need to be examined to give a full flavour of the transformation underway.

Conclusion
Sub-national actors are slowly but surely making their presence felt in areas that were not traditionally regarded as their legitimate concerns. This is because economic globalization and transnational decisions which affect their interests forces them to assert their claims. Globalisation, thus is both restrictive and expansive. It does curious things to sovereignty as it propels the states to accommodate both supranational and sub-national forces. This does not mean that sub-national units have grown to a stage where they are supplanting the key foreign policy actor namely, the national government. The practices within federations differ a great deal when it comes to assigning a role for sub-national units. Some federations have decidedly been more generous in sharing the foreign policy space with other levels of government. Others like India have been a little less forthcoming but have not been able to stem the tide of activities that thrust the sub-national units into this sphere. Accommodative strategies are constantly being evolved by reinterpreting and even amending formal provisions to bring them in line with changes at the ground level. This is both an acknowledgement of the legitimate interest of these units beyond their national frontiers as well as a recognition of their entitlement in this globalized world.

Excerpted by Rahul Dev, a senior journalist and TV anchor person from New Delhi, from “Globalization and Federalism: Sub-National Units and Foreign Policy”.