It is common knowledge that alcohol consumption during pregnancy would cause cognitive impairment in children. However, recent works suggested that the risk of drinking during pregnancy may have been exaggerated. It is critical to determine whether and up to which amount the consumption of alcohol will affect the cognitive development of children. We evaluate time-varying functional connectivity using magnetoencephalogram data from somatosensory evoked response experiments for 19 teenage subjects with prenatal alcohol exposure and 21 healthy control teenage subjects using a new time-varying connectivity approach, combining renormalised partial directed coherence with state space modeling. Children exposed to alcohol prenatally are at risk of developing a Fetal Alcohol Spectrum Disorder (FASD) characterized by cerebral connectivity deficiency and impaired cognitive abilities. Through a comparison study of teenage subjects exposed to alcohol prenatally with healthy control subjects, we establish that the inter-hemispheric connectivity is deficient for the former, which may lead to disruption in the cortical inter-hemispheric connectivity and deficits in higher order cognitive functions as measured by an IQ test, for example. We provide quantitative evidence that the disruption is correlated with cognitive deficits. These findings could lead to a novel, highly sensitive biomarker for FASD and support a recommendation of no safe amount of alcohol consumption during pregnancy.