This article examines how sovereignty under International Economic Law is increasingly functional rather than absolute, shaped by overlapping regimes of trade, investment, and digital governance. Using the EU's pooled sovereignty model, WTO non-discrimination principles, and the Carbon Border Adjustment Mechanism as illustrations, it argues that IEL simultaneously enables cooperation and imposes asymmetric constraints on domestic policymaking, disproportionately burdening developing economies. Digital sovereignty debates further expose the fragmentation of global regulatory coordination. The article concludes that sovereignty should be reconceived as layered and negotiated authority within multilevel governance, calling for IEL reform centered on doctrinal clarity, institutional flexibility, and distributive equity.