Commercial Diplomacy is a method of diplomacy. It concerns an activity conducted by public and private actors with diplomatic status to support business promotion between a home and host country. It aims at generating commercial gains in the form of trade and inward and outward investment by means of business and entrepreneurship promotion and facilitation activities in the host country. Commercial Diplomacy is pursued with the goal of gaining economic stability, welfare, or competitive advantage.
Association of Certified Commercial Diplomats (ACCD) defines Commercial Diplomacy as: (a) 'a range of commercial and judicial diplomatic activities involved in the development, advancement and responsible management of policies and treaties affecting the facilitation, negotiation, promotion and arbitration of international trade, investment and commerce'. (b) 'a range of commercial and judicial diplomatic activities involved in the facilitation, negotiation, promotion and arbitration of international trade, investment and commerce'.
In literature the concepts of Economic Diplomacy and Commercial Diplomacy are often used interchangeably. Definitions of both concepts vary, and consequently the relationship between them is also described differently. Some authors argue that Commercial Diplomacy is a subset of Economic Diplomacy. It is certain, however, that both kinds of diplomacy are "irrevocably intertwined" and thus "distinct [but] obviously closely related to [each other]".
Commercial Diplomacy emphasizes the government's role, being defined as "a government service to the business community, which aims at the development of socially beneficial international business ventures". It is "the work of diplomatic missions in support of the home country's business and finance sectors and includes the promotion of inward and outward investment, as well as trade". Commercial Diplomacy thus includes "all aspects of business support and promotion" including investment, tourism, R&D, and intellectual property.
Commercial Diplomacy is designed to influence foreign government policy and regulatory decisions that affect global trade, investment and commerce. It is concerned with government regulations and actions that affect international commerce—including standards in areas such as health, safety, the environment, and consumer protection; regulations covering services such as banking, telecommunications and accounting; competition policy and laws concerning bribery and corruption; agricultural support programs; and industrial subsidies. Potter (2004) argues that Commercial Diplomacy is a value-creating activity due to its usefulness in dealing with managerial and government concerns.
In this context, Commercial Diplomacy is profitable in that it makes exporting and operating abroad easier; it is a valuable instrument for export promotion and operating abroad; it enables companies to perform tasks abroad more quickly and increases the amount of exports and company results by providing information about rules, regulations, culture, public tenders and the market of the host country; by providing support during the partner search; and by providing assistance in trade disputes, fairs, and missions. Especially for companies that have financial limitations, access to reliable information and a broad network abroad are essential.
The Commercial Diplomat is a professional skilled in advancing the interests of an organisation or a State. Having acquired the skill and competence expected of a qualified and accredited Commercial Diplomat, which is the key to quality and efficiency in Commercial diplomatic profession and practice.
The Commercial Diplomat is an individual who is versed in the Art of Commercial Diplomacy, accredited and exercises plenipotentiary powers, especially, the authority to analyse, facilitate, negotiate, promote and arbitrate international trade, investment and commerce, on behalf of his or her State, multinational corporation or organisation. (Association of Certified Commercial Diplomats) ACCD
Practitioners of Commercial Diplomacy are usually international trade professionals and government officials, who are charged with facilitating and negotiating international trade and investment agreements, and resolving policy conflicts that affect international trade, investment and commerce. Officials from departments or ministries responsible for foreign affairs, finance, agriculture, industry, labor, health, the environment, the regulation of banks, telecommunications, air transportation, the licensing of professionals or arbitration of trade and investment can be Commercial Diplomats. Advocacy tools include letters, testimony, white papers, speeches, op-eds, phone calls, and personal visits to key stakeholders and decision makers.
Training and Accreditation Bodies
Institute for Trade and Commercial Diplomacy designs, develops, and delivers training programmes for professionals who deal directly with trade policy issues, negotiations, and the implementation of trade agreements. These professionals, who recently have become known as Commercial Diplomats, may work in government or business. They may be leaders of industry or trade associations or nongovernmental (NGO). ITCD's training methodologies enable these practising professionals to understand how to work through these challenges and offer practical solutions.
Association of Certified Commercial Diplomats (ACCD) is the first and only extraterritorial professional accreditation body for Commercial Diplomats and Institutions of Commercial Diplomacy. ACCD provides a wide range of professional membership options that are tailored to recognise seasoned career practitioners and new applicants alike. It is independent of government and does not owe allegiance to any political party. As an extraterritorial accreditation institution, ACCD's principal activities, include:
- advancement of the interests of practitioners globally;
- regulation of, and contribution to more efficient commercial diplomatic education and service;
- setting of policy and guidelines, as well as qualification and accreditation procedures for the profession of Commercial Diplomacy;
- provision of better regulation of, and contribution to responsible and more efficient professional practice.
Some authors also include the role of the private sector. In their definition, Commercial Diplomacy contains “the work of a network of public and private actors who manage commercial relations using diplomatic channels and processes”. For example, the Albright Stonebridge Group describes itself as a "leading Commercial Diplomacy and strategic advisory firm".
Traditional Commercial diplomatic activities include facilitating, negotiating, promoting and arbitrating international trade, investment, intellectual property and commerce, and advocating Responsible Commercial Diplomacy (RCD). Also, networking, capacity building, intelligence, image campaigns and support. These activities are shown in the table below.
|Network activities||Intelligence||Image campaigns||Support|
|Developing business and government contacts||Gathering and disseminating commercial information||Promoting goods and services||In negotiations; contract implementation and problem-solving|
|State visits||Market research||Participating in trade fairs, introducing potential exporters||Gathering export marketing data|
|Buyer-seller meetings||Reporting to home country||Sensitizing potential foreign investors||Supervision of violations of IPRs and contracts|
|Match-making||Consultant to both countries||Gathering export marketing data||Advocacy|
|Search for partners, distributors, investors, lawyers||Image studies, joint scientific research||Tourism promotion||Coordination of legal action|
|Personal network||Awareness campaigns|
Other activities for Commercial Diplomacy and rationales that companies need are: need for access to reliable and neutral business information; credibility and image support in foreign markets; partner search; conflict handling; support of home country delegations (state missions); strategic concerns (e.g., energy).
- Naray, O. (2008). "Commercial Diplomacy: A Conceptual Overview." Conference paper for the 7th World Conference of TPOs – The Hague, The Netherlands.
- Ruel, H. J. M. and Visser, R. (2012). "Commercial Diplomats as corporate entrepreneurs: explaining role behavior from an institutional perspective", International Journal of Diplomacy and Economy.
- Reuvers, S. and Ruel, H. J. M., "Research on Commercial Diplomacy: Review and Implications" in Commercial Diplomacy and International Business: a conceptual and empirical exploration, Ruel, H. J. M., ed. (Advanced series in Management, Emerald, 2012).
- Okano-Heijmans, M., and Ruel, H. (2011). "Commerciële diplomatie en internationaal ondernemen: Koopman versus dominee in de nieuwe economische wereldorde", International Spectator, 65(9), 463-467.
- Berridge, G. J., A Dictionary of Diplomacy (Basingstoke: Palgrave, 2001): p. 128.
- Kotabe, M., and Czinkota, M. R. (1992). "State government promotion of manufacturing exports: A gap analysis", Journal of International Business Studies, 23(4), 637-658.
- Naray, O. (2010). "Commercial Diplomats in the Context of International Business", The Hague Journal of Diplomacy, 6, 121-148.
- Ozdem, M. I. (2009). Government Agencies in Commercial Diplomacy: Seeking the Optimal Agency Structure for Foreign Trade Policy. North Carolina State University, p. 8.
- Naray, O. (2010). "What a good Commercial Diplomat has to know and be capable of", Exchange: The Magazine for International Business and Diplomacy, 2 (December 2010): 8-9.
- Busschers, S. (2012). "The Value of Commercial Diplomacy from an International Entrepreneurs perspective", in Commercial Diplomacy and International Business: a conceptual and empirical exploration, Ruel, H. J. M., ed. (Advanced series in Management, Emerald, 2012).
- Potter, E. H. (2004). "Branding Canada: The Renaissance of Canada's Commercial Diplomacy", International Studies Perspectives, 5, 55-60.
- Rose, A. K. (2005). "The foreign service and foreign trade: embassies as export promotion", World Economy, 30(1), 22-38.
- Lee, D., and Hudson, L. (2004). "The old and the new significance of political economy in diplomacy", Review of International Studies, 30, 343-360.
- Lee, D. (2004). "The Growing Influence of Business in U.K. Diplomacy", International Studies Perspectives 5, p. 51.
- Stadman, A. (2012). "Competitors or Collaborators: a comparison of Commercial Diplomacy policies and practices of EU Member States", in Commercial Diplomacy and International Business: a conceptual and empirical exploration, Ruel, H. J. M., ed. (Advanced series in Management, Emerald, 2012).
- Chang, Ben (1 July 2013). "Senior Additions Strengthen Albright Stonebridge Group As Leading Global Commercial Diplomacy Firm".
- Saner, R. and Yu, L. (2003). "Discussion Papers in Diplomacy: International Economic Diplomacy; mutations in post modern times". Netherlands Institute of International Relations ‘Clingendael”.
- Kostecki, M., and Naray, O. (2007). Commercial Diplomacy and international business (Den Haag: Nederlands Instituut voor Internationale Betrekkingen Clingendael, April 2007): p. 41.