Economic diplomacy is concerned with economic policy issues. Economic diplomats also monitor and report on economic policies in foreign countries and offer advice to the home government on how best to influence them. Economic diplomacy employs economic resources, either as rewards or sanctions, in pursuit of a particular foreign policy objective. This is sometimes called ‘economic statecraft’. Economic diplomacy is the decision-making, policy-making and advocating business interests of the sending state. Economic diplomacy requires application of technical expertise that analyzes the effects of a country’s economic situation on its political climate and on the sending state’s economic interests. The sending state and receiving state, foreign business leaders as well as government decision-makers work together on some of the most cutting-edge issues in foreign policy, such as technology, the environment, and HIV/AIDS, as well as in the more traditional areas of trade and finance. Versatility, flexibility, sound judgment and strong business skills are all needed in the execution of economic diplomacy.
Economic diplomacy engages contacts with foreign and sending states’ institutions, businesses and international organizations to advance the sending state’s economic interests; seeks to resolve bilateral trade disputes and negotiate with trading partners to liberalize world trade; seeks to formulate official policy for development and formulate recommendations for sending state; facilitates negotiation on trade-related agreements and treaties; and identifies and coordinates financial assistance to troubled areas. Economic diplomacy also engages development partners to raise standard of living in both sending and receiving states; co-ordinate trade policy, promote open markets, and promote sending states policies and interests in international and bilateral scientific, environmental, and technological arena.
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