Commercial diplomacy is defined as application of tools of diplomacy to the removal of barriers to trade and investment, and to the resolution of policy conflicts arising from the globalisation of the world economy. One perspective defines commercial diplomacy as the conduct by government officials in the context of negotiations and other relations between nations – the art and science of conducting such relations, the skills in managing negotiations, handling people, etc. so that there is little or no ill-will. On the other hand, another perspective of commercial diplomacy rests on the management of international relations by negotiations, the method by which such relations are managed by ambassadors and other officials, the skills required for such affairs, the diplomatic body, adroitness in personal relations, tact, etc.
Economic diplomacy, on the other hand, deals with economic policy issues such as in the multilateral fora like the World Trade Organisation (WTO), the United Nations Conference on Trade and Development (UNCTAD) and standard setting organisations like the World Intellectual Property Organisation (WIPO). Economic diplomacy employs economic resources either as rewards or sanctions, in pursuit of a particular foreign policy objective. This is sometimes called ‘economic statecraft’. An economic diplomat is a professional who also monitors and reports on economic policies in foreign countries and advises the home government on how to best influence them.
In short, commercial and economic diplomacy deals with articulation of foreign policy in the real world of trade and investment between nations, where high principles and objectives set out in the policy are fleshed out and put into effect. The tool of commercial and economic diplomay includes:
- Creating operational documents;
- Public and private communication;
- Analysis (especially in the fields of economics, politics, law and social relations)
- Coalition building.
In comparison to the counterparts from developed countries, when it comes to the application of various tools of commercial and economic diplomacy, developing country representatives often do not perform at the same level of efficiency and effectiveness. One reason is relative inadequacy of education and training in commercial and economic diplomacy. An Individual’s capacity to negotiate is one of the crucial determinants of the outcomes of such a process.
Considering this gap and realising the vacuum that exists in terms of absence of institutional base in developing countries to offer training/education of commercial and economic diplomacy and related aspects, the Department of Commerce, Ministry of Commerce and Industry, Government of India, has supported CUTS International to undertake such training programmes on commercial and economic diplomacy for Indian government officials and corporate executives. There would be three training programmes for various levels of official for three consecutive years (2007-2010).
- Meet the imperative of having trained government officials/corporate managers at various departments/organisations who are involved in commercial & economic diplomacy
- Ensure coherence between India’s domestic policy on trade and investment related issues with international commitments
- Enhance skills by developing/strengthening capacity for taking effective part in trade and investment negotiations and implementation aspects of related international agreements
A series of short courses will be offered by a team of eminent and experienced resource persons (former diplomats and trade negotiators). The course will cover following crucial areas of commercial and economic diplomacy:
Opportunities and challenges in an emerging global economy – to provide a comprehensive perspective of the global economic system, its emergence and dynamics and how it is affecting trade and investment flows
Analytical framework for effective commercial diplomacy – to explain principles and processes of negotiations under commercial diplomacy and its contrast with traditional diplomacy
Effective negotiations for commercial diplomacy – to impart basic skills and knowledge on negotiations
Simulations on trade and investment negotiations – to provide exposure to the process and content of negotiations through case studies and simulation exercises
Dispute settlement – to explain the nuances (with case studies) involved in drafting effective resolutions/agreements for settling commercial disputes