The Bottom Line: Thoughts on Commercial and Economic Diplomacy

For the past few weeks I have been lecturing and travelling in the UK and Europe with a group of MA candidates in diplomacy and international business. They are studying at the University of East Anglia’s London Academy of Diplomacy, and the subject of my short course is science, technology and international policy.

Even by Canadian standards, the group is exceptionally cosmopolitan and multicultural, with students from Afghanistan and Albania, South Africa and St. Lucia, Spain and Saudi Arabia, Vietnam, Kazakhstan and Zambia. It’s a mini-UN, and our exchanges are informed and enriched by the diversity of perspectives brought to bear.

Continuous learning and compelling conversation.

Last week at Nyenrode Business University just outside of Utretcht, Holland, we received a very interesting lecture on “Commercial Diplomacy”. The subject also came up a few days later during a briefing at the Dutch Foreign Ministry, where we learned that in response to the Great Recession, the new emphasis for Dutch representatives abroad  is “Economic Diplomacy”. Some missions are being closed (mainly in Latin America), and a few new ones opened (mainly in Asia) with that priority foremost in mind.

My preoccupations have always tended towards the analysis of world politics and global issues, and I have never spent much time reflecting on how best to use diplomacy to advance commercial and economic objectives. Most of what I have seen of this sort of work on my postings abroad seemed rather garden variety and uninspired – organizing visits, delivering programs, participating in trade fairs, making presentations, pitching inward investment. Arranging run-of-the-mill itineraries for business visitors which consist mainly of set-piece, pro forma and predictable encounters with the usual suspects may in some instances be necessary, but will rarely be sufficient to ensure tangible gains.

Obtaining results usually requires something more.

My overall impression, I might add, was that those companies who wanted help with exports generally weren’t ready, and those enterprises who were ready – and often already active in foreign markets – generally didn’t want or need the support or assistance of the state.

From those observations I concluded that while responsibility for the formulation of trade policy should likely stay within government, trade promotion might usefully be privatized, and offered as a service only to those businesses who were prepared to pay. Some countries, such as Denmark and New Zealand, are already experimenting with this sort of model.

That said, many governments are still providing trade and investment services abroad at public expense, so the main issues are value for money and performance improvement. In that respect, I see considerable scope to applying the principles of guerrilla diplomacy to economic and commercial work overseas.

Guerrilla diplomacy is about agility, acuity, and outside the box thinking. From that it follows that effectiveness and results at the end of the day will often have little to do with knowing where the meeting rooms are at the best hotels or having an inside line on VIP room reservations at the airport. What counts most in terms the ability to add value and provide strategic advice will be the quality of networks and contacts – key players, opinion-leaders, facilitators, potential partners. The guerrilla trade commissioner will be expert at cross cultural communications, a source of macro-economic analysis and grass roots market intelligence, and have a sophisticated understanding not only of how their territory works, but or how to work their territory.

Elsewhere I have remarked that the explosion of global issues – climate change, pandemic disease, resource scarcity – has eroded the monopoly of the foreign ministry and implicated the work of line government departments in the management of many critical international policy files. Just as such as the capacity and expertise resident in ministries such as Environment, Health and Natural Resources has made a real contribution to addressing the range of issues rooted in science and driven by technology, responsibility for various aspects of commercial diplomacy is similarly widely dispersed.  Departments such as immigration (recruiting of new members of the labour force), transport (negotiation of air service agreements and infrastructure  links), development assistance (transition from donor-recipient relationship to economic partnership) and industry (process and product innovation) all have an important role to play. So, too, with various regulatory bodies.

Take aways?

Technology, human resources and knowledge are crucial, and highly mobile factors of international production. They will play a major in determining who will prosper in the highly competitive precincts of the 21st century.

That elevates the place and role of commercial and economic diplomats, and positions them to make a real difference.

Secondly. To ensure a degree of policy coherence in the face of such complex and multi-faceted challenges, there will need to be a focal point for  government-NGO -private sector coordination, and a locus for inter-departmental decision-making.

With a mandate to manage the cross-cutting issues which define globalization, the Foreign and Trade Ministry could be just the place to situate that function.

It’s nobody else’s job, and it is one which desperately needs doing.