Commercial diplomacy describes a method of diplomacy that promotes public and private business between a home and host country. Diplomats aim to generate and facilitate commerce in the form of increased trade, inward and outward business investment, entrepreneurship promotion, and other commercial activities in the host country. Diplomats pursue commercial diplomacy in the pursuit of economic stability, welfare, and competitive advantage.
While, some authors argue that commercial diplomacy is a subset of economic diplomacy, others say these concepts are distinct, closely related, and irrevocably intertwined. Many use economic and commercial diplomacy interchangeably.
Commercial diplomacy emphasizes the government role of serving the business community by developing socially-beneficial international business ventures. Diplomatic missions support their home country's business and finance sectors, inward and outward investment, and expanded trade options. Commercial diplomacy includes all aspects of business support and promotion, including investment, tourism, research and development, and intellectual property.
Commercial diplomacy can influence foreign policy and regulatory decisions that affect global trade and investment, including:
E.H. Potter (2004) argues that commercial diplomacy creates value because it helps businesses:
Practitioners of commercial diplomacy typically include diplomats and trade officials charged with negotiating international trade and investment agreements and resolving policy conflicts that impact international commerce.
Commercial diplomats include officials from departments or ministries responsible for agriculture, air transportation, bank regulation, the environment, finance, foreign affairs, health, industry, labor, professional licensing, and telecommunications.Advocacy tools include opinion articles in the local newspaper, personal letters, phone calls, speeches, white papers, testimony before government agencies, and personal visits to key stakeholders and decision makers.
The private sector can play a role in commercial diplomacy. For example, some private consulting agencies advertise their ability to perform many of the functions described above that government diplomats perform. Chambers of commerce and non-governmental organizations (NGOs) are examples of private actors involved in commercial diplomacy.
Traditional commercial diplomacy activities include networking, intelligence, image campaigns and support. These activities are shown in the table below.
|Network activities||Intelligence||Image campaigns||Support|
|Developing business and government contacts||Gathering and disseminating commercial information||Promoting goods and services||In negotiations; contract implementation and problem-solving|
|State visits||Market research||Participating in trade fairs, introducing potential exporters||Gathering export marketing data|
|Buyer-seller meetings||Reporting to home country||Sensitizing potential foreign investors||Supervision of violations of IPRs and contracts|
|Match-making||Consultant to both countries||Gathering export marketing data||Advocacy|
|Search for partners, distributors, investors, lawyers||Image studies, joint scientific research||Tourism promotion||Coordination of legal action|
|Personal network||Awareness campaigns|
Other activities commercial diplomats engage in to respond to business needs include: