economic diplomacy

ECONOMIC DIPLOMACY

Economic diplomacy defined

“The process through which countries tackle the outside world, to maximize their

national gain in all the fields of activity including trade, investment and other forms

of economically beneficial exchanges, where they enjoy comparative advantage.;

it has bilateral, regional and multilateral dimensions, each of which is important”.

“

Three elements of economic diplomacy The use of political influence and relationships to promote and

influence international trade and investments.

The use of economic assets and relationships to increase economic security. 

Ways to consolidate(strong) the right political climate and international political economic environment to facilitate and institute these objectives.

Economic diplomacy-Issues

Economic diplomacy requires application of technical expertise:

Versatility, Flexibility, Strong business skills

Scope

International and Domestic economic issues – this includes the “rules for economic relations between states” that has been pursuedsince the World War II.

And owing to the increased globalization and the resultant interdependence among state during the 1990s obliges “economic diplomacy to go deep into domestic decision making” as well.

Players

State actors such as Govt.agencies

Non-state actors such as NGOs

Businesses and investors

Economic Diplomacy on the focus of Foreign Policy

Economic Diplomacy on the focus of Foreign Policy

Economic diplomacy is traditionally defined as the decision-making, policy-making and advocating of the sending state’s business interests.

Economic diplomacy is the art of serving economic security and strategic interests of the country .

The agenda of economic diplomacy is comprehensive.

THE ORGANISATION OF ECONOMIC SYSTEMS OF  DIPLOMACY 

The united model represents a complex of development of bilateral trade and economic relations under the Aegis of Ministry of Foreign Affairs. 

The,partially,united model. The Ministry of Foreign Affairs and the Ministry of Economic,jointly organize their work on the development of trade and economic relations 

where the trade and  economic mission is allocated to the separate division of diplomatic mission, and, as a result, is in a  double subordination to the Ministry of Foreign Affairs and to the Ministry of Economics. 

Three levels

Economic diplomacy is functional at three levels:

Bilateral Regional Multilateral.

Difference among these diplomacy

Economic diplomacy’

‘‘The political means as leverage in international negotiations with the aim of enhancing national economic prosperity, and the use of economic leverage to increase the political stability of the nation’’ .

For example: the US-EU trade agreement negotiations

commercial diplomacy’

The work of a network of public and private actors who manage commercial relations and business support using diplomatic channels and processes, satisfying both public and private needs.

For example: Chinese businesses in Africa

Significance of Economic Diplomacy

Significance of Economic Diplomacy

InterestsPowerEnvironmentopportunities

Significance of Economic Diplomacy InterestsFirst, in terms of strengthening interests, economic diplomacy is an extension of domestic politics, and serves domestic economic construction.

Economic diplomacy is interest-oriented.

Economic diplomacy serves national economic development and transformation.

Significance of Economic Diplomacy PowerSecond, by smartly employing power, economic diplomacy helps to enhance China’s international influence.

China is now fully able to counteract this and enhance its international influence by exerting its influence on global diplomacy through the comprehensive and integrated use of economic means. Example China-Africa Cooperation Forum in October 2000,

Significance of Economic DiplomacyEnvironmentChanging the diplomatic environment. Third, by improving the overall diplomatic environment, economic diplomacy contributes to peace, development, cooperation and a win-win situation. ExampleChina-US relations are a typical example of this.

Significance of Economic Diplomacy

OpportunitiesFourth, by seizing opportunities, economic diplomacy is conducive to extending the period of strategic opportunity.

Example Since 2008, the global financial crisis and the subsequent European and US sovereign debt crises made the trend evident that the West is declining and the East is the ascendancy.

Case study of Economic diplomacy

Economic Diplomacy: A Case Study

As a concept, economic diplomacy was introduced by Japanese

US advocated economic diplomacy late but applied a carrot and stick policy

Chinese however started paying attention in the early 1990’s

China economic diplomacy: Early Days

• Internal revolution

• Restructuring of society under Mao’s leadership

• Little contact with the rest of the world, travel restrictions

Rise of economy in China

Between 2000 and 2009, China experienced strong economic growth, averaging 10% a year

Jiang Zemin changed the style of diplomacy to a "harmonious world"

Americans are increasingly disturbed by the growing economic clout of China

China and the US

Both share common interest in:– strong and open global economy, – inclusive growth and sustainable development– stable international financial system

US welcomes China playing active role in:– taking on due responsibility for the international financial

architecture– in bilateral cooperation to address global economic

challenges

strengthen economic diplomacy

How to strengthen economic diplomacy?

First, in terms of institutional framework

Second, in terms of setting goals

Third, in terms of institutional platforms

Fourth, we should further strengthen the

economic functions of institutions stationed

overseas.

Fifth, in terms of team building

Sixth, we should further promote diversified

participation.

Seventh, in terms of theoretical study, we

should further speed up disciplinary

construction

conclusion

Economic diplomacy was present from its origin in foreign policy. It is the predominant mechanism of fruitful achievement of the trade and economic relations based on the bilateral and multilateral levels.

It  is  an  instrument  for  development  of  effective  cooperation  between  the  countries and regions at  the global level. 

The role of economical diplomacy is irreplaceable in this process.  Our life is full of infinite opportunities. 

Reference

https://books.google.com.pk/books?id=gK_OQZDgskAC&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage&q&f=false

https://books.google.com.pk/books?id=zHl1LUZUcu0C&printsec=frontcover&dq=economic+diplomacy+and+politics+book&hl=en&sa=X&redir_esc=y#v=onepage&q&f=false

https://books.google.com.pk/books?id=nz8qSLutxUoC&printsec=frontcover&dq=economic+diplomacy+and+politics+book&hl=en&sa=X&redir_esc=y#v=onepage&q=economic%20diplomacy%20and%20politics%20book&f=false

http://www.dec.lv/mi/Baranay_Pavol_engl.pdf