(a) "Deglobalisation is displacing globalisation." Comment. (20 marks) (b) What are the distinctive features of the post-modern…

(a) Deglobalisation: Transformation rather than Displacement

The assertion that deglobalisation is displacing globalisation mischaracterises a structural recalibration as a total retreat. Globalisation has not ceased; rather, what Dani Rodrik terms "hyperglobalisation"—the frictionless, market-fundamentalist integration of the 1990s—is giving way to a more fragmented, securitised economic order. Manifestations of deglobalisation, such as US-China strategic decoupling, tariff wars, national industrial subsidies, and data localisation mandates, reflect state-led efforts to insulate domestic economies from external shocks. These disruptions, amplified by Brexit and post-pandemic supply chain vulnerabilities, have accelerated "near-shoring" and "friend-shoring", and the sweeping US tariffs announced in April 2025, including a 10 per cent baseline on almost all imports, marked the most direct challenge yet to the post-war trading order. Even after the US Supreme Court struck down the emergency-powers (IEEPA) tariffs in February 2026, Washington replaced them with a temporary Section 122 surcharge.

However, these shifts represent what The Economist called "slowbalisation" - cyclical adjustment and re-regulation rather than structural displacement. While traditional merchandise trade has plateaued, cross-border digital flows, services trade, financial integration, and systemic interdependence in climate governance continue to expand. As Joseph Stiglitz argues, the crisis lies in the governance architecture of globalisation rather than the principle of global interconnectedness. Consequently, the global political economy is pivoting toward regionalisation (e.g., RCEP, USMCA) as a middle path, reconciling state sovereignty and resilience with cross-border economic integration.

(b) Features of the Post-Modern State in Advanced Capitalist Economies

The post-modern state represents a qualitative mutation of traditional Westphalian statehood within advanced capitalist economies. The term was popularised by the British diplomat Robert Cooper (The Breaking of Nations, 2003), who described states - above all the members of the European Union - that accept mutual interference in domestic affairs, mutual surveillance and pooled sovereignty, and have renounced force among themselves, in contrast to "modern" states that guard their sovereignty and "pre-modern" states that have lost control of their territory. In theoretical terms, Susan Strange documented this evolution as the "retreat of the state" before structural market power, while Bob Jessop conceptualised it as the transition from the Keynesian National Welfare State to the "Schumpeterian Workfare Post-national Regime," wherein states subordinate social redistribution to international competitiveness, innovation, and labour flexibility. Philip Cerny designated this the rise of the "competition state."

Distinctive features of the post-modern state include the hollowing-out of sovereignty across multi-level governance regimes (supranational bodies, regional pacts, and sub-national authorities), the ascendancy of "regulatory capitalism" where the state steers markets through independent regulatory agencies rather than direct ownership, and the privatisation of core functions, including security and penal management. As R.A.W. Rhodes's idea of "governing without government" and Manuel Castells's "network state" suggest, the post-modern state operates not through autonomous territorial command, but through diffuse, networked governance deeply enmeshed in transnational legal and financial flows. Yet the pandemic, the 2008 bailouts and the return of industrial policy show that such states can still reassert themselves when crises demand it.

(c) From NAFTA to USMCA: Limitations and Institutional Corrections

The North American Free Trade Agreement (1994) exhibited critical limitations: non-binding side agreements that failed to enforce labour and environmental standards, asymmetric Investor-State Dispute Settlement (ISDS) mechanisms that empowered corporations to challenge domestic public policies, severe disruption of Mexican peasant agriculture, and an obsolete framework lacking rules for digital commerce.

The United States-Mexico-Canada Agreement (USMCA, in force from 1 July 2020) introduced targeted institutional corrections to counter these defects. It established the facility-specific Rapid Response Labour Mechanism to enforce collective bargaining rights, integrated binding environmental obligations directly into the core text, and created an advanced Digital Trade chapter prohibiting customs duties on digital products and restrictions on cross-border data flows. Structurally, USMCA tightened automotive Rules of Origin by raising Regional Value Content to 75% and mandating that 40–45% of auto content be produced by workers earning at least $16 per hour. Furthermore, it curtailed corporate privilege by dismantling ISDS between the US and Canada while strictly circumscribing it for Mexico, and introduced a 16-year sunset clause with mandatory six-year reviews.

Nonetheless, USMCA also reflects repackaged protectionism. Provisions like Article 32.10—which allows members to terminate the agreement if a party enters an FTA with a "non-market economy"—subordinate trade liberalization to geopolitical containment, primarily targeting China. Its limits were exposed again in 2025, when Washington imposed tariffs on Canada and Mexico over migration and fentanyl, exempting only USMCA-compliant goods, and at the first joint review in July 2026 the United States declined to confirm a new 16-year term, moving the agreement to annual reviews while it remains in force.