Can Diplomats be Job Creators too?

This article in the Memphis Commercial Appeal gives a rare glimpse into the world of U.S. diplomatic efforts to assist U.S. companies win bids and export American products.  Many people, mostly businesspeople and diplomats, know this is how big international trade deals often get done.  Ho hum.  But your average American citizen doesn’t know this realm and, judging from some of the reactions in the blogosphere , are surprised or even upset at what they perceive as collusion between big business and government.

The fact is, every nation’s diplomatic corps does this if they can, and should.  What’s known as commercial diplomacy protects jobs in the home country and improves the economy by promoting exports.  The job of diplomats is to promote the interests of their country and what better way is there than to help grow the economy?

On the American team we have the U.S. Commercial Service (CS), sometimes known by its full name of U.S. and Foreign Commercial Service.  CS is part of the U.S. Department of Commerce as well as the U.S. Foreign Service.  Its officers are diplomats working in U.S. embassies and consulates in 80 (soon to be 73) countries around the world.  Their job is to help U.S. companies, big and small, to successfully export American-made products to other countries.  They are the leading edge of America’s commercial diplomacy.   The U.S. State Department and its economic officers also play an important role in commercial diplomacy.  I’ll have more on how these players work in later posts.

In the FedEx case discussed in the Commercial Appeal article the American diplomats advise the FedEx executives on which ministries were important to their cause and which Argentine government officials had decision-making power.  Consultations and commercial diplomacy are services that are available not just to large American corporations like FedEx but to even the smallest American companies that ask for it.

We can also see in the article that American diplomats acted as promoters of Boeing airplane sales and “successfully killed” an Airbus deal.   There are two big civilian aircraft companies in the world; Boeing is based in America and Airbus is based in Europe.  When the two are fighting for a big airplane sale – and often the buyer is a foreign government – European and American diplomats line up on their respective company’s side and slug it out.  In each case one side wins and one side loses.  An engineer in Wichita gets a job or an engineer in Toulouse gets it.

As former Ambassador to China, James Sasser, points out in the article, U.S. diplomats don’t get involved when two American companies are fighting to win a bid overseas.  They only step into the ring when it comes down to whether these jobs are going to the U.S. or to China or France.

The revelation of the un-redacted classified diplomatic cables by Wikileaks is a profound disservice to the interests of the U.S. but a collateral benefit is their demonstration of how the world actually works and the important difference that American diplomats make.  The average worker at FedEx would never know that they have their job at least partially because of the work of American diplomats.  Chances are, their leadership would never tell them this.

Ironically, the slash and burn budget-cutting going on in Congress as I write this threatens the nation’s commercial diplomacy program.  The CS budget and footprint are being cut back for the tenth year in a row.  Posts in crucial markets are being closed and the program is in retreat at a time that America’s competitors are expanding their export programs.  Last year the Obama Administration asked for a $70 million increase in the export promotion and commercial diplomacy program.  Congress not only stripped that away but is continuing to slash the program by another 10%.  That’s not the way to create American jobs.