copyright, dd/csend, 2006wilton park 2006 trade policy-making and multi-stakeholder diplomacy dr....

COPYRIGHT, DD/CSEND, 2006

Wilton Park 2006

Diplomacy Dialogue

Trade Policy-Making and Multi-stakeholder Diplomacy

Dr. Raymond Saner & Dr Lichia Yiu

Diplomacy Dialogue/ CSEND- Geneva

www.DiplomacyDialogue.org

COPYRIGHT, DD/CSEND, 2006 Wilton Park 2006

Diplomacy DialogueObjectives 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


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.


Diplomacy Dialogue

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.


Diplomacy DialogueContext

• 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.


Diplomacy DialoguePost-Modern Economic Diplomacy

PD

MOFAED CD

Other Ministries

BD

CD

TNCs

N-NGO

T-NGO

Civil Societies

(Saner & Yiu, 2003, International Economic Diplomacy: Mutations in Post-Modern Times)


Diplomacy Dialogue

Interests of these State and Non-State Actors ….

(Saner & Yiu, 2003)

ED

CDBD

CD

N-NGO

T-NGO


Diplomacy Dialogue

EconomicDiplomats

CommercialDiplomats

T-NGODiplomats

N-NGODiplomats

CorporateDiplomats

BusinessDiplomats

Postmodern Economic Diplomacy

Shaping socio-economic/ ecological development policies•Negotiating global economic governance architecture•Setting standards at multilateral organisations •Managing multi-stakeholder coalitions & alliances


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)


Diplomacy Dialogue

Negotiation Arenas of Global Economic Governance

(Saner, Yiu, 2000)

International level

National level

Community level

Standard and rule setting organisations and actors

Regulatory and enforcing bodies (governments) and formal political actors

Civil society representatives,consumer groups, non-state rule setting groups, tribal leaders


Diplomacy DialogueInfluences 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)


Diplomacy Dialogue

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


Diplomacy DialogueGlobal 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.


Diplomacy DialogueTrade Policy Making

• Main ingredients for success and failure of trade policy making


Diplomacy DialogueTrade 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.


Diplomacy Dialogue

Inter-ministerial Coordination(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 inter-

ministerial conflict• Arbitration of inter-ministerial differences• Setting limits for ministries• Establishing governmental priorities



• 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.



• 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.)


Diplomacy Dialogue

WHONGOs

WB

IMF

COUNTRY

MOF MOP

MOE

MOH

MOL

ILO CountryOffice

Employers Union

Labour Union

ILO

WTO

Main Actors in PRS

WHO NGOs


Diplomacy DialogueCase Example

Trade in Educational Services and Negotiations at WTO


Diplomacy Dialogue

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


Diplomacy DialogueGATS & Globalisation

(Source: W. Goode, 1998)

• Globalisation: growing tertiary sector (services) of world economy:

• Example: AustraliaA) 80% of total jobs

B) 75% of GDP

C) 13% Exports of ES of total Trade in Services

D) ES Exporters are mostly publicuniversities!


Diplomacy Dialogue

5 Major Exporters of ES, US$ million and as a % of total exports

in Services

1970 % 1989 % 1997 % 2000 %

Australia 6 0.6 584 6.6 2,190 11.8 2,155 11.8

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 ...

Source: Based upon Larsen et al. (2002); OECD/CERI (2002)

Note: “...” denotes data not available.


Diplomacy Dialogue Business Diplomacy

Managing Relationships with non-business Stakeholders

Is about


Diplomacy DialogueGATS/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

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)


Diplomacy DialogueGATS/ES: positional reasoning II

Liberalising

• Technology transfer (joint degree, faculty exchanges, curriculum dev)

•Improved „exportability“of own human resources

Protecting

• Philosophical divide public service vs market

• Limiting „westernisation“


Diplomacy Dialogue Coalition Clusters of Stakeholders in ES Coalition Clusters of Stakeholders in ES marketsmarkets

Diplomacy Dialogue


Diplomacy DialogueCoalition Clusters of Selected CMPs in ES marketsCoalition Clusters of Selected CMPs in ES marketsDiplomacy Dialogue


Diplomacy DialogueCountries, Institutions and Actors Countries, Institutions and Actors

Requesting Market AccessRequesting Market Access for Trade in ESfor Trade in ES

Diplomacy Dialogue


Diplomacy Dialogue

1

2

3

4

5

6

7

8

Appointment as Top Manager Appointment as Ambassador

Appointment as Board Member Appointment as High Government Official(e.g., undersecretary)

Appointment as Partner of Law Firm/ Consultancy/ Lobby Firm

Appointment as High Government Official

Appointment as Ambassador Appointment as Partner/Manager of Law Firm/ Consultancy/ Lobby Agency

Appointment as Adjunct/Full time faculty member

Appointment as High Government Official (e.g., undersecretary)

Double assignment as University Professor and Private law firm/ Consultancy/ Lobby Agency Partner

Double assignment as Company Board Member and University Board Member

Appointment as Diplomat Appointment as Faculty/Academic member

Academic/Teacher

Government High Office

DiplomatForeign Service

Top Manager of Global Co.

Partners-Mangers of Law Firm /

Private Consultancy/

Lobby Agency

University Board

56

7

8

2

4

1 3

Legend (Two way path of appointments):


Diplomacy Dialogue

Conclusion

• Global economic governance characterised by:1. 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

2. 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)


Diplomacy DialogueConclusion -2

4. Knowledge creation and diffusion by state and non-state actors (ICT, media and other network techniques) thus creating convergent and divergent processes

5. Increasing need by MofA and government in general to shift regulatory functioning from controlling to consulting, facilitating, enabling and refereeing

6. Cross-over of experts from one field to other fields (civil servant, diplomat, academician, partner of law firm and TNCs)

7. Urgent need of governments/MoFA to improve on interministerial coordination and govt-private/social sector consultation in field of trade & economic diplomacy.


Diplomacy Dialogue

Thank You!!!

copyright, dd/csend, 2006wilton park 2006 trade policy-making and multi-stakeholder diplomacy dr....

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