Trade Negotiation. Course Code: IE409 Evening Class

Transcription

1 Trade Negotiation Course Code: IE409 Evening Class 1

2 Trade vs. Commerce 2

3 Trade vs. Commerce Buying Trade Cash Selling Banking Buying Insurance Commerce Advertising Selling Logistic 3

4 Diplomacy 4

5 Diplomacy is usually described as the main instrument of foreign policy enabling the management of external relations of a state by communication with foreign authorities and publics, as well as through the process of negotiations and networking. Diplomatic activities may take place on the international level (bilateral, regional or multilateral) or within the host state (for example, with government departments, civil servants, parliament, NGOs, business organizations, corporations and so on). 5

6 The classical concept of diplomacy defines it as: the conduct of relations between states and other entities with standing in the world politics by official agents and by peaceful means (Bull 1995: 156). A more recent definition says that: diplomacy is concerned with the management of relations between states and between states and other actors (Barston 2006: 1). 6

7 Commercial diplomacy is often confused with economic diplomacy and other types of diplomacy such as trade diplomacy and financial diplomacy.

8 Economic Diplomacy 8

9 Economic Diplomacy is concerned with international economic issues. The Bretton Woods system of international economic institutions created after WWII developed rules for economic relations between states, but left national autonomy untouched. 9

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11 As long as domestic policies did not have negative impacts on others, governments could pursue whatever employment, tax or industrial policy they wish. Economic Diplomacy is concerned with economic policy issue, e.g. work of delegations at standard setting organisations such as WTO. Economic Diplomacy employs economic resources, either as rewards or sanctions, in pursuit of a particular foreign policy objective. 11

12 Commercial Diplomacy 12

13 Commercial Diplomacy on the other hand describes the work of diplomatic missions in support of the home country s business and finance sectors in their pursuit of economic success and the country s general objective of national development. It includes the promotion of inward and outward investment as well as trade. Important aspects of a commercial diplomat s work is the supplying of information about export and investment opportunities and organizing and helping to act as hosts to trade missions from home. 13

14 In some cases, commercial diplomats could also promote economic ties through advising and support of both domestic and foreign companies for investment decisions. Commercial Diplomacy designed to influence foreign government policy and regulatory decisions that affect global trade and investment. 14

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16 Different Definition of Commercial Diplomacy The application of tools of diplomacy to help bring out specific commercial gains through promoting exports, attracting inward investment, and preserving outward investment opportunities, and encouraging the benefits of technological transfer. The work of a network of public and private actors who manage commercial relations using diplomatic channels and processes. An activity conducted by public actors with diplomatic status in view of business promotion between a home and a host country. It aims at encouraging business development through a series of business promotion and facilitation activities. 16

17 To sum up: Commercial Diplomacy is an activity conducted by state representatives with diplomatic status in view of business promotion between a home and a host country. It aims at encouraging business development through a series of business promotion and facilitation activities. The term commercial diplomacy is often used to cover two different types of activities: policy-making and business support. 17

18 1. Intelligence Most important activities of commercial Diplomacy: 2. Assistance with fairs, trade mission and networking 3. Problem solving and assistance with trade disputes 4. Partner search and negotiation 18

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20 Economic Diplomats The goal of economic diplomats is to competently influence multilateral economic policy by coordinating specialised ministries, by shaping the negotiation process at economic standard setting organisations, and by constructively including non-state actors when useful and appropriate. Economic diplomats also monitor and report on economic policies in foreign countries and give the home government advice on how to best influence them. 20

21 Commercial Diplomats Commercial diplomats located abroad undertake business facilitation activities in the field of trade, investment, tourism, country image, and promotion of science and technology. They are usually staff members of a diplomatic mission or heads of a commercial representative abroad with a diplomatic status. Commercial Diplomats are either civil servants and especially trained diplomats, or representatives of chambers of commerce of trading associations seconded to national Embassies located in important foreign markets. 21

22 The Commercial Diplomat s aim is to open foreign markets for their own home companies by influencing foreign governments economies and by facilitating the easy entry of their respective national companies into foreign markets. They should also be available for facilitation should there be conflict of interests with foreign business or nonbusiness stakeholders. 22

23 Commercial Diplomacy aims at encouraging business development. Firms which enter foreign markets need to have access to reliable and neutral information, they need to enhance their credibility and image, they must search for potential partners, and/or they need to be able to handle conflicts effectively. Government s objectives are ultimately to create jobs, increase revenue and economic growth. 23

24 Commercial Diplomats are even considered as being the most important success factor for effective commercial diplomacy. The combination of academic and practical training, and overseas experience should be the standard. It appears that having a knowledge of subjects such as marketing, the local markets, and commercial and financial techniques stands a commercial diplomat in good stead. 24

25 1. Business promoters business-oriented, pro-active commercial diplomat that seeks the satisfaction of companies serve. Three types of commercial diplomats 2. Civil servants Typically emphasises on policy implementation rather than business support and is more responsive to government instructions than client needs. 3. Generalists Assuming business support functions on an ad hoc basis or in addition to other diplomatic duties. They tend to be less technical than the two former types. 25

26 Head of State Prime Minister Minister High ranking level Actors of Commercial Diplomacy in civil servant Members of Parliament Lower ranking level Ambassador Trade Representative Commercial Attache 26

27 To deliver tangible results that support our members business objectives by removing constraints on trade and investment activities in ASEAN, and elevating the importance of the US-ASEAN economic relationship to American and ASEAN public policy makers and business leaders. 27

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30 Chamber of Commerce 30

31 American Chamber of Commerce With a diverse membership ranging from large multinationals to small companies and individuals, AmCham serves as the voice of American business within the Cambodian private sector, as well as to the US and Cambodian governments. We hold general membership meetings at least once a month, usually with featured speakers. Throughout the year we also sponsor special events, often in conjunction with the US Embassy or other business groups. During recent years AmCham Cambodia has coordinated several investment missions from other regional AmChams. 31

32 These have been very well received and more are being planned. Similarly, AmChan Cambodia has sponsored investment missions to other countries such as Vietnam and Singapore. AmCham Cambodia enjoys a close working relationship with the US Embassy. Two regular events are meetings of the Overseas Security Advisory Council ( OSAC ) and monthly breakfast meetings with the US Ambassador, to which all members are invited on a rotating basis. The Embassy also arranges meetings with visiting US Government officials and members of Congress. Of great importance is our cooperation with the Embassy on advocacy issues affecting American businesses. 32

33 European Chamber of Commerce 33

34 European Chamber of Commerce EuroCham was established with the objectives of promoting the interests of European businesses operating in Cambodia, facilitating the entry of European companies into the market and creating an extensive support network among corporate and individual members. In this context, EuroCham activities include partnerships with the Government in the areas of taxation and dispute resolution, the creation of sector-specific Committees under the EuroCham umbrella and provision of a range of services to European businesses. 34

35 EuroCham's key objectives: Consult & lobby with government on key issues related to doing business in Cambodia; EuroCham Cambodia Committees and staff prepare studies, working papers, initiatives and suggestions for regulations to improve government & business relations and conditions of doing business in Cambodia; Represent the views and interests of the business community of the Member States of the European Union in the Kingdom of Cambodia; Endeavor to improve access for European business to the Cambodian market; 35

36 Provide services to Members and non-members relating to economic, legal, technical, financial, market and other business issues in the EU and Cambodia and industry specific information to investors; Facilitate the creation of strategic alliances between small and medium size companies of Cambodia and EU Member States; Promote a strong European Union business identity vis-à-vis the Cambodian business community; Promote strong ties with the Delegation of the European Commission, Representatives of European Member States, the Chambers of Commerce or Business Associations in Cambodia of EU member countries (that is Chambers of Commerce established in Cambodia for the promotion of the interests of companies from one of the Member States of the European Union) as well as other Business Groups and Chambers 36

37 Cambodian Chamber of Commerce 37

38 In Cambodia, Chamber of Commerce is established under the Law on Chamber of Commerce promulgated in 1995 and its relevant amendment and regulations of the Kingdom of Cambodia. By nature, Chamber of Commerce is a voluntary membership-based and is a not-for-profit institution representing private sector interests in commercial, industrial, service and craft and agricultural sectors and dedicates to the economic well-being of their territory and of the country as a whole. Large, medium and small legal businesses from virtually every profession across the nation could join the chamber of commerce. 38

39 There are 12 municipal/provincial chambers of commerce representing their member businesses in their respective territory. The growing number of local chambers of commerce, from just one which is the Phnom Penh Chamber of Commerce by the end of 2004, represents the increase of economic and business activities in the country which recorded one of the highest growths among developing economies in the world. Local Chambers of Commerce forms up a Cambodia Chamber of Commerce which has a nation-wide jurisdiction and constituency. 39

40 Why does commercial activity between mostly private companies require the intervention of diplomats? 40

41 International trade and financial flows, like their domestic equivalents, require a host of regulations, rules, and agreements to proceed smoothly. Domestically, negotiation of the rules among different industries, states, and other government entities, can be complicated. 41

42 Group Assignment Essay Format: 5 pages at minimum, in hardcopy Time New Roman, size 11, space 1.2 Full citation (reference)