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Module 17. Introduction to Managing the Business/Government Relationship of Trade

Commercial Diplomacy, the Private Sector and the Public Policy Process - An Interactive Relationship*

Commercial Diplomacy involves the application of advocacy tools to influence government policies that affect international commerce. Since government policy is the province of government officials and international commerce is the province of business managers, the dialogue between the two is at the heart of Commercial Diplomacy. Sound management of the relationship between government and business is crucial to good trade policy.

There has been a growing awareness that trade decisions also affect broader interests of society in areas such as health, the environment, and labor standards. This non-economic dimension of trade policy has grown progressively as the trade agenda has expanded from barriers at the border such as tariffs and quotas to domestic regulatory measures such as environmental and health measures. These broader interests of society are often represented by public interest groups, who are now demanding a role in the trade policy decision making process in their own countries, as well as globally. Beyond government and business, Commercial Diplomacy therefore involves nongovernmental organizations that represent the interests of citizens as workers, consumers, and supporters of social objectives such as a clean environment and a safe community.

This module focuses on how these three groups in society can manage their relationships with each other as part of the trade policy decision-making process, and how Commercial Diplomats working for any government, business or public interest group can seek to influence the attitudes, objectives and actions of decision-makers in all three sectors, and thereby achieve desired policy outcomes. A key to effective management of the relationships involved is a basic understanding of the different roles, values, motivations and objectives of actors in each of the three sectors. Effective advocacy has to be based on a sound understanding of potential partners or opponents. Achieving such an understanding is particularly challenging when it involves actors whose role and frame of reference is different than one's own. 

There are considerable differences in how countries around the world organize their government, their economic enterprises, and civil society. These differences affect how much independence business and public interest groups have from the government, and conversely how much political influence either business or public interest groups can exert in trade policy decisions. Notwithstanding these differences, there are many similarities in the fundamental roles of business, government and public interest groups in most countries, regardless of their economic and political organization. This similarity arises from the distinct roles played by each of these three sectors, which defines their basic objectives, motivations and values. 

This note is designed to help the aspiring Commercial Diplomat, as well as the practitioner, to understand the underlying relationship between government and business, and more broadly between government and civil society (i.e., all private organizations) in Commercial Diplomacy, and the tools by which these relationships can be managed. To the extent possible, the manual identifies global best practices that hold true across a wide range of countries, and their distinct political and economic systems and cultures. The discussion of common elements and global best practices is supplemented by brief descriptions of institutional arrangements and practices in the United States, and to a more limited extent in other major countries. Finally, the manual offers insights into the management of the government/private sector relationship at the global level.

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