Economic diplomacy is one of the most effective tools that nations can use to ensure the best interests of the people they serve. The United States has a long history of effective economic diplomacy dating back to the late 19th and early 20th centuries. Our use of economic diplomacy has led to some of the most important changes in global history, including the 1948 Marshall Plan that drove Europe’s reconstruction following World War II.
The American Foreign Service Association defines economic diplomacy as “using diplomatic skills with economic tools to advance a country’s economic, political and strategic goals.” However, it must be understood that a nation’s use of economic diplomacy is not intended to benefit only its own citizens. Economic diplomacy is often used to encourage changes that would benefit other people’s.
For example, economic diplomacy is often leveraged to:
- deter or punish political bad actors
- fight and deter terrorism
- fight smuggling, drug activity, etc.
- provide assistance following natural disasters
- provide financial assistance to emerging nations.
As a tool for affecting change around the world, economic diplomacy works best when engaged in by a coalition of nations acting together. The stronger the coalition, the more sway it has. As such, international coalitions are established for the purposes of addressing human rights violations, preventing global warfare, and so forth.
Supporting Economic Reform
Economic diplomacy offers nations and coalitions opportunities to create all sorts of change. Among the most important is economic reform. The fact of the matter is that economics touches every aspect of daily life. For the world to truly be equitable and just for all, economics must be equitable and just. Thus, economic diplomacy often focuses on encouraging economic reform.
When coalitions succeed in achieving their goals, economic diplomacy bridges gaps between peoples. It brings nations together to do what is best for the global community. Two of the most visible examples include the world coming together to provide aid following the 2004 Indian Ocean tsunami, and again to aid the Bahamas after hurricane Dorian in 2019.
Economic diplomacy is an immensely powerful tool for affecting change. Here in the United States, we have one of the strongest economies in the world. We join with other nations in using our economic strength to make the world a better place.