The Foreign Service Journal, April 2005

sary for global development and commerce. The micro, or transactional, component of the pro- gram provides appropriate governmental support for American interests in the contest for sales and contracts and for enforcement and compliance in particular cases involving rights won through prior trade agreements. It also provides program support that, if used strategically, can underpin and advance the broader macro agenda. Here the lead agencies have been Commerce (Foreign Commercial Service officers); State (economic officers); USTR, Agriculture and USAID; and our finance agen- cies (Export-Import Bank, Overseas Private Investment Corporation, Trade Development Agency, Small Business Administration and the multilateral develop- ment banks). At present there is little effective coordina- tion between these two levels, reducing the support avail- able for our global agenda. For example, policies to lib- eralize trade in key regions of the world often are frus- trated by the absence of micro-level programs to build support for the resulting agreements or adequately reach out and inform affected U.S. commercial interests. Two Choices Looking ahead, I see two possible scenarios unfold- ing. One is a continuation of the status quo and the belief that commercial diplomacy will always be a sec- ondary program in our overall foreign policy mix, best left to operate in its current fragmented state. Proponents of this view define commercial diplomacy solely in terms of the narrow export promotion mission. While advancing our own direct commercial interests is vital, the other two national interest components — trade liberalization and market-driven development strategies — are equally important to policy-makers. Of course, maintaining the status quo translates into a severely diminished program. Given the grim reality of increasingly adverse foreign exchange rates and the growing costs of doing business safely overseas, com- mercial diplomacy under this scenario will continue to suffer ever more severe budget cuts, and will cease to exist as a program, I believe, within a few years. Meanwhile, foreign governments are becoming ever more strategic and aggressive in their commercial diplo- macy efforts. The 2002 President’s National Export Strategy (prepared by the Trade Promotion Coordination Committee) found that “one of the greatest concerns of experienced [U.S.] exporters, large or small, is the suc- cess [our] major trading partners have — with their gov- ernment’s support —winning projects and procurements in key growth markets.” As of 2003, in terms of staffing and spending, we ranked dead last among the top 10 countries in budget expenditures on commercial diplo- macy (and by a considerable margin). There is, however, another way forward. This approach would step back and seriously consider the merits of a commercial diplomacy program comprehen- sively defined in terms of our commercial self-interest, our stake in an ever-liberalizing global economy and a market-based strategy for global development. This would place commercial diplomacy again at the center of our policy. To achieve this objective will require strong leadership from the White House and Congress. The White House must carry out its responsibility for formu- lation of a strategic plan and a corresponding proposal for reprioritization and reallocation of resources, while Congress must seriously look at its structure for oversight and funding this function through 19 separate congres- sional subcommittees. This need not be overly compli- cated and could, in my view, be done with fewer resources than currently allocated. In terms of execution, I believe that the Commerce and State Departments should create a new joint execu- tive office to develop the commercial diplomacy initiative and to direct its implementation. Staffed by both depart- ments, this initiative would build on the existing State/USAID policy/management coordinating mecha- nism by adding in the commercial diplomacy responsibil- ity. The executive branch then would have the capability of designing global and regional strategies that would integrate our support for U.S. business with our policy efforts to further liberalize the global economy and to support a global development initiative built around free markets and democracy. The intent here would be to provide for strong strategic thinking that recognizes the interconnections of our commercial, trade and develop- ment interests without undermining the lean, indepen- dent operating structures necessary for comprehensive strategy implementation with effective global programs. With the objective of eliminating bureaucratic stovepipes and promoting the sharing of information across agencies, a significant portion of the federal gov- ernment has been reorganized in recent years — e.g., Defense, Homeland Security and the intelligence com- munity. The same set of needs and challenges confronts C O V E R S T O R Y 28 F O R E I G N S E R V I C E J O U R N A L / A P R I L 2 0 0 5