Commercial
diplomacy is defined as the application of the tools of diplomacy
to the removal of barriers to trade and investment, and to the resolution
of policy conflicts arising from the globalization of the world
economy.To
elaborate on this definition, the tools of diplomacy include negotiation,
creating operational documents, public and private communication,
analysis (especially in the fields of economics, politics, law,
and social relations), and coalition building. The removal of trade
and investment barriers allows the free flow of people, goods, services,
information, and capital across national and regional borders. This
removal may be affected by private commercial interests and organizations,
as well as by domestic and international governing institutions
and agencies. Commercial diplomacy goes beyond trade and investments,
however, to the resolution of the multiple causes of international
policy conflicts. These conflicts include differences among nations
and organizations in the areas of labor standards, environmental
issues, health and safety matters, and competition policy. All of
these elements initially stated in the formal definition are manifestations
of the globalization of the world economy.In
today’s rapidly converging world economies, commercial diplomacy
is an essential activity. International trade is well over 40 percent
of the world’s gross domestic product, and the sales of corporations’
foreign affiliates around the world have exceeded that of exports
by over 90%. These global market statistics are indeed impressive.
At the same time, non-market issues, such as environment and labor
standards, have become highly visible to the world’s communities.
The activist demonstrators that disrupted the World Trade Organization
meeting in Seattle in 1999 are evidence of this.In fact, it is very
important to note at the outset that the salience of the trade issues
of tariffs and quotas that formerly occupied most of the time and
effort of international organizations has diminished. The major
new efforts have been directed toward regulatory matters that are
much broader in scope. Today’s international conflicts and issues
are related to how different nations view other nations’ use of
subsidies, industrial policies, industry standards, intellectual
property practices and laws, competition policy, labor standards,
and other like matters. One nation’s regulations and policies may
be seen by other nations as a barrier to the free flow of their
products, services, and resources.Furthermore,
these broad regulatory issues are often more deeply embedded in
specific industry sectors such as telecommunications, transportation,
pharmaceuticals, and medical equipment. The modern day understanding
of trade goes far beyond the landing dock for imported goods and
well into the heart of the institutional, regulatory machinery of
nations.Commercial
diplomacy makes an important contribution to continued improvements
in international trade, foreign direct investment, and solutions
to international non-market conflicts. These improvements are contributing
to the achievement of world economic development.
The
Commercial Diplomat
The
commercial diplomat is a professional skilled in advancing the interests
of a stakeholder on international trade and investment-related policy
issues, in developing agreements on international commercial issues,
and in resolving policy conflicts among nations over commercial
issues. Practitioners of many professions—lawyers, economists, political
analysts, accountants—all deal with some commercial diplomacy activities,
but not on an integrated basis. The commercial diplomat devotes
his or her energies to the integration of all these areas of knowledge
to address policy issues that affect international commerce. Although
commercial diplomacy activity has existed from the earliest time
of trade, only in the last ten years has it been recognized that
this field requires professionals who have received education and
training specific to the field. Prior to this time, commercial diplomats
learned their skills on the job. Today, however, professional training
focused on the requirements of commercial diplomacy is finally being
developed.
Education and Training
Although
many universities and training institutions offer individual courses
related to commercial diplomacy, only a few comprehensive graduate
degree programs exist as yet. The first was developed at the Monterey
Institute of International Studies in 1995.Based
on the International Commercial Diplomacy Project model, the education
of commercial diplomats consists of four stages: theory, institutions,
skills and techniques, and integration. The first stage provides
the intellectual and conceptual foundation for the field of commercial
diplomacy. While it should not be surprising that stage one involves
a heavy dose of economics, the theory stage also includes courses
on politics and on policy analysis.The
second stage introduces the institutional context of trade and trade
policy. Courses may cover international and national trade organizations,
regional trading arrangements, and international trade law. The
history of thought on trade, the history and evolution of trade
policy, in-depth analyses of case law and international institutions
are also in this stage.In
the third stage, knowledge of economics, politics, law, institutions,
media, and culture is combined into a coherent analysis of particular
international commercial issues. Students learn how to formulate
integrated strategies to advance policies desired by particular
stakeholders. They also learn to implement these strategies through
the development of operational documents and the effective use of
advocacy tools such as hearings, press conferences, coalition-building
efforts, and negotiations. In short, prospective professionals learn
to combine the disparate subjects previously covered to enable them
to function effectively in the private and public practice of commercial
diplomacy.Lastly,
integration combines three types of subjects: simulated trade negotiations,
both in English and in multilingual settings; an individual project
in which a specific issue is studied in depth in order to demonstrate
expertise in the multiple facets that go into becoming a trade professional;
and finally, the study of important current trade issues.The
implementation of an effective training and education program is
dependent on a variety of up-to-date pedagogical materials, including
textbooks, instructor’s manuals, guides to course preparation, operational
documents, simulated negotiation exercises, and case studies. In
all of the educational stages, the case method is a key teaching
mechanism to be employed, as it is in many kinds of professional
training.
The
Case Method
The
case method is the use of cases, based on real events and experiences,
as educational tools to give students an opportunity to place themselves
in the position of the problem solvers. Through interaction with
others, students in a case method class learn the details of the
case. They then move on to the definition of the problem, identification
of alternative solutions, and making the final decision. Case method
learning provides a simulation of a real practice experience.Although
this description of the use of cases seems fairly straightforward,
the case itself brings in various influences, pressures, and considerations
that the case participants will face in making a decision. Often,
the information available seems to be adequate, but in fact is contradictory
or misleading.The
students, all attempting to apply the same analytical methods, often
find themselves offering various alternative solutions and then
changing them due to the understanding gained in group discussion.The
dynamics of the case method, both in terms of the events in the
case itself and in the classroom, as the students and instructors
interact to understand and/or to solve it, provide a means for gaining
experience not possible in other ways.
Applying
the Case Method to Commercial Diplomacy
The
case method gained popularity initially through its use in business
management education. The Harvard Business School is recognized
as the foremost institution in developing and extensively utilizing
this teaching method. However, case studies are also employed in
the fields of law and medicine. In some social sciences, they are
primarily used for research rather than as a teaching tool. Sociology
and psychology, for example, use case histories as a research methodology,
and these histories as a body are designated as case studies. The
application of the case method to commercial diplomacy is most similar
to its application to business management.The
typical commercial diplomacy case study is a description of a real
situation that a practitioner has faced. The commercial diplomats
and others in the case have access to quantitative and qualitative
data that are presented to students. The quantitative data may consist
of trade statistics, investment figures, labor rates, and other
measures. The qualitative data may involve the attitudes, feelings,
and emotions of people, a description of activities and sites, and
much more. The case will describe a situation that commercial diplomats
and other professionals have already faced and resolved. In some
cases, the problem is not clearly defined. In others, the problem
is defined, but alternative solutions are not given.Class
analysis of a case in commercial diplomacy proceeds in a manner
similar to analysis of a business case. Student discussion guided
by the instructor is the primary class activity. The major difference
between a commercial diplomacy case and a business case is the content.
Differences in the substance and content of these two kinds of cases
will be addressed in further detail in Chapter 3.
The
Need for More Case Studies
As
commercial diplomacy is a relatively new field, the number of cases
that have been written specifically for it is relatively small.
A few of these cases are posted on the ICDP website [1]. No other
dedicated source of commercial diplomacy cases currently exists,
although a few such cases may be found in the catalogues of business
school and public policy cases [2].In
addition to the fact that commercial diplomacy is a new field of
study, another key point is that all cases tend to age quickly;
that is, within five years, the case study begins to look out of
date and possibly non-applicable. Even writing styles may have changed.
Further, the facts may reflect an old issue that is no longer of
interest to practitioners.For
these two reasons—the newness of the field and the aging of cases—there
exists a great need for commercial diplomacy cases. The creation
of this manual is an effort to spur the writing of cases covering
as many new types of situations as possible.
Manuals
and Textbooks
Although
many books have been written on the case study method, relatively
few have described the case writing process. Among these few, most
are textbooks ranging in length from 100 to 250 pages. These textbooks
cover not only the practice of writing cases, but also pedagogical
theory, unique and specialized methods, actual case examples, and
many topics not usually required in a short manual. A selected list
of textbooks on case writing is given in the bibliography.This
manual, by contrast, is intended to focus more narrowly on writing
cases in the specific field of commercial diplomacy. If the prospective
case writer wishes to expand his or her knowledge and skill in case
writing, the next step would be to delve into the textbooks listed
in the bibliography.