Five steps the US must take to double down on commercial diplomacy
In recent years, China has greatly stepped up its diplomatic and commercial outreach to countries from the South Pacific and Latin America to Africa and the Middle East. In fact, in 2019, China overtook the U.S. in the number of diplomatic outposts it maintains around the globe. At the same time, Beijing’s trade and investment programs, including the Belt and Road initiative and new infrastructure and development deals, have expanded to dozens of countries.
The contrast with the U.S. is stark. Our federal international affairs budget has been largely flat over the past decade, which is also how long it’s been since the U.S. added to the list of 20 countries where we have trade agreements in place.
The business community is increasingly concerned that America’s ability to compete globally for influence and markets is hobbled by a failure to invest in commercial diplomacy. Indeed, America’s prosperity depends on our ability to sell U.S.-made goods and services to the 95 percent of the world’s population that is outside our borders.
But that’s not all: Commercial diplomacy is critical to our national security, and it advances U.S. values, including through the transparency and high standards the U.S. government and private sector embrace in international agreements and daily business practices.
We live in a polarized time, but this is surely an area where politics must end at the water’s edge — starting with these five recommendations:
- Expedite the confirmation of ambassadors. Far too many key foreign capitals have gone without a Senate-confirmed ambassador for years at a time. Senate leaders should make a bipartisan commitment to expedite the consideration of nominations of career diplomats by holding an up-or-down vote within 60 days of receiving the required paperwork. Policy holds on career nominees should be quashed. Of course, the Senate cannot provide its advice and consent until the White House submits a nomination. The administration can do a better job anticipating and limiting gaps by accelerating its own processes.
- Fix broken visa processes. Due to the pandemic and staff shortages, a first-time applicant’s wait for a U.S. visa interview has soared worldwide. In many cities in India, Latin America and Africa, the wait for an appointment ranges from 500 to 900 days. This is a huge impediment to mutually beneficial commerce, business travel and tourism — and other, more nimble countries are seizing the advantage. Staff additions and better use of technology must be applied to fix this embarrassing and costly problem.
- Boost the U.S. International Affairs budget. U.S. spending on diplomacy and development, which represents just 1 percent of federal spending, has been flat for the better part of a decade. The construction of new, secure embassies in many countries has consumed a large share of the budget. Meanwhile, the U.S. has done without embassies or with only limited staffing in regions such as the South Pacific, where competition for influence has become intense. The U.S. should increase the so-called “150 Account” budget for diplomacy and development to sharpen our economic and national security tools and keep pace with increases for the Defense Department. Bipartisan support for this spending is strong: As former Secretary of Defense James Mattis memorably said, “if you don’t fund the State Department fully, then I need to buy more ammunition.” In addition, the State Department should mandate that economic and commercial issues be placed on par with traditional diplomatic imperatives. This would align with the new National Security Strategy’s emphasis on our need to fortify the “allied techno-industrial base.”
- Ease strictures on Development Finance Corporation, Export-Import Bank. The U.S. International Development Finance Corporation (DFC) is a key tool in incentivizing and leveraging private sector investments in development projects. However, the DFC is prohibited from engaging in upper-middle-income countries where China and the U.S. are often vying for influence. While exceptions can be made, this limit is a severe impediment to the DFC’s effectiveness. The same is true of the U.S. Export-Import Bank (EXIM), which is burdened with domestic content rules that are far more limiting than those of the export credit agencies of countries such as Canada. A move under the last administration to liberalize these constraints where U.S. exports are competing with Chinese products should be made universal.
- Build regional dialogues. Eighty percent of success is showing up. Having an annual schedule of economic and commercial engagement imposes discipline on U.S. commercial diplomacy and sets action-forcing deadlines. In some regions, this works pretty well. The Asia-Pacific Economic Cooperation (APEC) forum has a rhythm and consistency that gradually moved commercial priorities forward over the past three decades. The U.S. hosts APEC next year, making it a special opportunity to drive the agenda. The new U.S.-EU Trade and Technology Council is playing a useful role. In other regions, more consistency is needed. In December, the U.S. will host the first U.S.-Africa Leaders Summit since 2014. The chamber is partnering with the administration on a related business forum, and we’re excited to have this opportunity. But these engagements need to happen much more regularly and have tangible outcomes on which to build. The same is true in the Americas, where plans for the Americas Partnership for Economic Prosperity (APEP) are taking shape in the wake of June’s Summit of the Americas in Los Angeles. However, these summits tend to be held every 3-5 years, and the APEP needs ongoing attention in the near term if it is to deliver the goods.
The U.S. brings formidable strengths to the competition for global influence and markets, but we need to show up — with a plan and adequate resources — and avoid “own goals.” Bolstering our commercial diplomacy can leverage those strengths and deliver substantial benefits for America’s prosperity, security and values.
Myron Brilliant is executive vice president and head of international affairs of the U.S. Chamber of Commerce.