Economic and Commercial Diplomacy
Economic diplomacy, narrowly defined, is concerned with international economic policy questions, such as how to preserve global financial stability without indefensible levels of youth unemployment and unmanageable levels of wholly defensible levels of ci
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Economic diplomacy, narrowly defined, is concerned with international economic policy questions, such as how to preserve global financial stability without indefensible levels of youth unemployment and unmanageable levels of wholly defensible levels of civil unrest; and how to stimulate economic growth, particularly in the poorest countries, while arresting or at least slowing down climate change. Commercial diplomacy, on the other hand, consists mainly of assistance to the promotion of exports and foreign direct investment (FDI), and access to raw materials. This chapter will show how modern diplomacy was influenced by commerce from its earliest days, but how the priority given to economic as well as commercial diplomacy has risen more in recent years. What is the role of foreign ministries and especially embassies in this work, and how are the latter set up to cope with its varied demands? These are the questions guiding the remainder of the chapter.
Rising priorities The invention and spread of resident diplomatic missions in the late fifteenth century had probably been encouraged by the example of the consulates earlier established by trading peoples in and around the Mediterranean world (as noted at the beginning of Chapter 8), and, from the first, they sometimes had a decidedly commercial flavour. In a few exceptional cases, major trading companies, with the blessing of their sovereigns at home, themselves established full-blown embassies, not only financing them but also appointing and sharing in the instruction of ambassadors (Box 14.1). Thereafter, although high politics came to dominate the work of most embassies until World War I, the ‘trade’averse aristocrats who usually headed them were rarely able to ignore 210
G. R. Berridge, Diplomacy © G. R. Berridge 2015
Economic and Commercial Diplomacy
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commercial work altogether. This was because they had field responsibility for the consular posts that, in time, fell under state control; because international trade began to grow enormously in the first half of the eighteenth century; and because embassies themselves came to be given direct responsibility for the negotiation of commercial treaties – that is, the general framework in which trade was conducted in bilateral relationships. Box 14.1 The Levant Company and the English Embassy at Constantinople Furtherance of the distant and dangerous trade with the Levant was the main English interest in developing diplomatic relations with the Ottoman Empire. In September 1581, in compensation for the risks involved, certain London merchants – soon to be organized as the Levant Company – obtained a charter from Queen Elizabeth I that gave them its monopoly. Two years later, William Harborne, one of the merchants and a former member of parliament, was confirmed as England’s first ambassador and soon secured from the Ottoman sultan trading privileges as good as those already obtained by Venice and France. For many years afterwards, the first priorities of Harborne’s successors were to ensure that these privil
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