Diplomacy Dialogue
Trade Policy-Making and Multi-stakeholder
Diplomacy
Dr. Raymond Saner & Dr Lichia Yiu
Diplomacy Dialogue/ CSEND- Geneva
www.DiplomacyDialogue.org
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2006
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Diplomacy Dialogue
Objectives of Our Presentation
• To capture the complexity of the multi- layered
and multi-actor sphere of global economic
governance and its negotiations
• To reflect on the unchallenged assumption that
interests/stakes remain “territorially” oriented and
bounded to the “state” and on its traditional
instruments of diplomatic representation.
• To illustrate this complex relationships between
private business, state and civil societies by a case
example: Trade Policy Making
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Diplomacy Dialogue
Sources of Presentations
A) Raymond Saner & Lichia Yiu
“Swiss Executives as Business Diplomats in the
New Europe“, Organizational Dynamics, Elsevier
Publ. Fall 2005.
B) Raymond Saner & Lichia Yiu
“International Economics Diplomacy: Mutations
in Postmodern Times”, Discussion Papers in
Diplomacy, No. 84, Clingendael Institute of
International Relations, The Hague, January 2003.
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Sources of Presentation
D) R. Saner; Yiu, L.; Sondergaard, M.
“Business Diplomacy Management: A Core
Competency for Global Companies”, Academy of
Management Executive, Vol.14(1), February 2000.
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Diplomacy Dialogue
Context
• ICT provided a “leveling” playing field for state
and non-state actors.
• Wide spread educational opportunities and
accumulation of human capital now possible
outside of known information-centres (cities)
• Distribution of knowledge and expertise at
global-transborder levels.
• Growing independence of business interests
(TNCs with GDP higher than many countries)
• Growing participation of NGOs in shaping
international discourse.
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Diplomacy Dialogue
Post-Modern Economic Diplomacy
MOFA
PD
ED
CD
BD
Other
Ministries
TNCs
CD
Civil Societies
NNGO
(Saner & Yiu, 2003, International
Economic Diplomacy: Mutations in
Post-Modern Times)
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TNGO
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Interests of these State and
Non-State Actors ….
(Saner & Yiu, 2003)
ED
BD
CD
CD
NNGO
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TNGO
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Diplomacy Dialogue
Business
Diplomats
Economic
Diplomats
Corporate
Diplomats
Commercial
Diplomats
Postmodern
Economic Diplomacy
Shaping socio-economic/
ecological development policies
•Negotiating global economic
governance architecture
•Setting standards at
multilateral organisations
•Managing multi-stakeholder
coalitions & alliances
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N-NGO
Diplomats
T-NGO
Diplomats
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Diplomacy Dialogue
Success and Failure of Non-State Actors
in Post Modern Economic Diplomacy
• Failures:
 Shell in Nigeria
 Pharma TNCs versus South Africa (AIDS
treatment)
• Successes:
 Eurodad versus IFIs (debt forgiveness for
LDCs)
 Defeat of MIA/OECD by NGO coalition
 Defeat of EU’s banana trade regime by Central
American countries (Del Monte)
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Diplomacy Dialogue
Negotiation Arenas of Global
Economic Governance
(Saner, Yiu, 2000)
International level
Standard and rule setting
organisations and actors
National level
Regulatory and enforcing bodies
(governments) and formal
political actors
Community level
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Civil society representatives,
consumer groups, non-state rule
setting groups, tribal leaders
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Diplomacy Dialogue
Influences on Global Governance by
Business Actors
(Saner, Yiu & Sondergaard, 2000, „Business Diplomacy Management“)
• Influencing global governance
structure (e.g. IFIs)
• Shaping rules and standards (e.g.
WTO, ILO, WHO)
• Preventing/initiating new regulations
(environmental & social performance
requirements)
• Creating alternative negotiation for a
(WEF Davos, Forbes- New York)
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Pressures on Economic Governance
System by Civil Society NGOs
(Saner & Yiu, 2003, „International Economic Diplomacy“)
• Demanding greater participation in
policy making process (accredited &
non-accredited NGOs)
• Reframing policy debates (e.g. Porto
Allegre as alternative to WEF and
“Washington Consensus”)
• Influencing political discourse through
advocacy & grass root mobilisation
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Diplomacy Dialogue
Global Economic Governance System:
Business Diplomacy Goals & Strategies
(Saner, Yiu & Sondergard, 2000)
•Influencing the negotiation of international treaties
and agreements,
•participating in government policy dialogue,
•influencing international standard setting at
multilateral bodies,
•engaging non-business stakeholders,
•mediating conflicting interests between business and
environmental/social groups
•Accumulating long term strategic social and
reputational capital.
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Trade Policy Making
• Main ingredients for success and failure of
trade policy making
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Trade Policy Making (2)
• Trade negotiations are largely determined by a
government’s ability to prepare negotiations at
home. Trade negotiators need to negotiate with
their own side and have clear and effective
mandates pre-negotiated from their respective
government (Saner, 2000, 2005).
• Failure to conduct effective intra-governmental
negotiation can be attributed to lack of political
will to prepare such a trade negotiation
mandate but more often, it can be attributed to
the inability of governments to coordinate their
needed interministerial negotiations.
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Inter-ministerial Coordination
Diplomacy Dialogue
(Source: Metcalf,1994)
• Inter-coordination consists of the following features:
• Independent decision-making by ministries within their
own policy domain
• Communication to other ministries (information
sharing)
• Consultation with other ministries (feedback)
• Avoidance of divergences among ministries
• Inter-ministerial search for agreement (seeking
consensus)
• Organising conciliation and mediation in case of interministerial conflict
• Arbitration of inter-ministerial differences
• Setting limits for ministries
• Establishing governmental priorities
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Trade Policy Making
• Governments are expected to organise
national trade policy advisory councils in
order to give representatives of their
respective business communities and key
representatives of civil society an
opportunity to make their concerns,
interest and preferences heard so that
they would be taking into account in a
country’s trade policy making process.
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Diplomacy Dialogue
Trade Policy Making
• Governments need to organise themselves in
efficient and effective ways to:
• 1. harvest information from national interest
groups
• 2. assign responsibilities to the different
ministries responsible for the various sectors
such as e.g.
industry, finance, foreign affairs, education,
agriculture, transport, health, environment and
other agencies directly or indirectly involved with
trade (e.g. standards bureaux, intellectual property
offices, customs agencies etc.)
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Main Actors in PRS
Diplomacy Dialogue
IMF
WTO
WB
MOF
MOP
COUNTRY
MOL
MOH
MOE
ILO
Labour
Union
ILO
Country
Office
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WHO
NGOs
NGOs
Employers
Union
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Diplomacy Dialogue
Case Example
Trade in Educational Services
and Negotiations at WTO
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GATS/ES
• USA: export of ES = 7 Billion US$ (1996)
(5th largest US service export sector)
• AUS: exports of ES= 2.155 B.US$ (2000)
(equal to 11.8% total AUS service exports)
• OECD: trade in higher edcuation = 30 B.US$
(1996); = 3% total service traded in OECD
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GATS & Globalisation
Diplomacy Dialogue
(Source: W. Goode, 1998)
• Globalisation: growing tertiary sector
(services) of world economy:
• Example: Australia
A) 80% of total jobs
B) 75% of GDP
C) 13% Exports of ES of total Trade
in Services
D) ES Exporters are mostly public
universities!
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Diplomacy Dialogue
million and as a % of total exports
in Services
1970
%
1989
%
1997
%
Australia
6
0.6
584
6.6
Canada
68
2.7
530
3.0
595
1.9
796
2.1
New Zealand
...
...
...
...
280
6.6
199
4.7
United
Kingdom
...
...
2,214
4.5
4,080
4.3
3,758
3.2
United States
...
...
4,575
4.4
8,346
3.5
10,280
3.5
Five
Countries
74
...
7,903
...
15,491
...
17,188
...
2,190 11.8
2000
2,155 11.8
Source: Based upon Larsen et al. (2002); OECD/CERI (2002)
Note: “...” denotes data not available.
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Diplomacy Dialogue
Business
Diplomacy
Is about
Managing Relationships with
non-business Stakeholders
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Diplomacy Dialogue
GATS/ES: positional reasoning I
Liberalising
•Limited financial resources
•No innovation, need for
competition
•Export Strategy, need for
critical mass to lower
production costs
•Copyright protection
through TRIPS
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Protecting
•Quality of foreign need for
FDI supplier uncertain
•Fear of abrupt closureby
foreign provider
•Concern about elite
formation (private schools
for minority)
•Strong stakeholders
(Teachers)
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GATS/ES: positional reasoning II
Liberalising
• Technology transfer (joint
degree, faculty exchanges,
curriculum dev)
Protecting
•
Philosophical divide
public service vs
market
•Improved „exportability“of
own human resources
•
Limiting
„westernisation“
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Diplomacy
Diplomacy
Dialogue
Dialogue
Coalition Clusters of Stakeholders in ES markets
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Diplomacy
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Dialogue
Coalition
Dialogue
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Clusters of Selected CMPs in ES markets
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Dialogue
Dialogue
Countries, Institutions and Actors Requesting
Market Access for Trade in ES
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Diplomacy
Diplomacy
Dialogue
Dialogue
Countries, Institutions and Actors Requesting
Market Access for Trade in ES
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Diplomacy
Diplomacy
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Dialogue
Countries, Institutions and Actors Requesting
Market Access for Trade in ES
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Academic/
Teacher
5
6
University
Board
Diplomacy Dialogue
7
8
2
Top Manager
of Global Co.
Government
High Office
1
3
Diplomat
Foreign
Service
Legend (Two way path of appointments):
Partners-Mangers
of Law Firm /
Private
Consultancy/
Lobby Agency
4
1
Appointment as Top Manager
Appointment as Ambassador
2
Appointment as Board Member
Appointment as High Government Official
(e.g., undersecretary)
3
Appointment as Partner of Law
Firm/ Consultancy/ Lobby Firm
Appointment as High Government Official
4
Appointment as Ambassador
Appointment as Partner/Manager of Law
Firm/ Consultancy/ Lobby Agency
5
Appointment as Adjunct/Full
time faculty member
Appointment as High Government Official
6
Double assignment as University Professor and Private law firm/ Consultancy/ Lobby Agency Partner
7
Double assignment as Company Board Member and University Board Member
Appointment
8
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(e.g., undersecretary)
Appointment as Faculty/Academic member Wilton Park 2006
Conclusion
Diplomacy Dialogue
•
Global economic governance characterised by:
1.
2.
Blurring of boundaries between traditional
diplomacy, public affairs by TNCs and NGO
Redefined roles, interests and diplomatic processes
by non-state actors through vertical and horizontal
integration to affect economic and trade policy
making
Shaping of global economic governance agenda by
state and non-state actors concomitantly at multiple
fora (GATS/ES = WTO, UNESCO, OECD, Council
of Europe, WB)
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4.
5.
6.
7.
Conclusion -2
Knowledge creation and diffusion by state and nonstate actors (ICT, media and other network
techniques) thus creating convergent and divergent
processes
Increasing need by MofA and government in general
to shift regulatory functioning from controlling to
consulting, facilitating, enabling and refereeing
Cross-over of experts from one field to other fields
(civil servant, diplomat, academician, partner of law
firm and TNCs)
Urgent need of governments/MoFA to improve on
interministerial coordination and govt-private/social
sector consultation in field of trade & economic
diplomacy.
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Diplomacy Dialogue
Thank You!!!
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