George Kennan, meet Willy Loman. While weighty matters of war and peace, negotiation and intelligence gathering still hold top priority in U.S. embassies, the diplomatic corps has new marching orders: sell. For ambassadors and consuls from Bonn to Bombay, brokering business deals has become a basic part of the job. Says Acting Secretary of State Lawrence Eagleburger, “The world has changed. Today, activity to improve America’s economic interests is as important as anything we do.”
The French, Germans and Japanese have long been known for rolling out the big diplomatic guns to advance their commercial interests, and they are freer with financing and foreign aid when it helps to clinch a deal. But until the late 1980s the local U.S. Embassy was about the last place an American exporter would look for assistance. Consular officers were famously uninterested in dealing with visiting executives, and they were often inept: when U.S. diplomats threw a party in Silo Paulo in 1984 to promote American printing equipment, they offered their Portuguese-speaking guests a sales pitch in Spanish. Many officers were only too glad to lose responsibility for aiding business in 1982, when Congress established the U.S. & Foreign Commercial Service at the Department of Commerce. But economics is king of the new world order, so old diplomats have been forced to learn new tricks. Says Donald Gregg, U.S. ambassador to South Korea, “The fruits of the cold war lie in our ability to trade.”
Eagleburger has pushed exports hard since he became deputy secretary of state in 1989. All new Foreign Service officers, chiefs of mission and ambassadors now get a class on commerce as part of their basic training. Last year, for the first time, USFCS chief Susan Schwab was invited to meetings of U.S. ambassadors to Europe and Asia. “This is a tremendous difference from 10 or 20 years ago. It’s not easy for any of us to recycle ourselves for this purpose,” says Thomas Simons, U.S. ambassador to Poland. Simons should know: the 30-year Foreign Service veteran spends almost a quarter of his time helping U.S. companies.
That kind of high-level involvement is what drew Terry Martin to Singapore. Martin, sales manager for Raynor Garage Doors in Dixon, Ill., attended a Chicago briefing by five U.S. ambassadors last March on how to do business in Asia. That persuaded him to visit a trade show in Singapore in May. Last week he was back in the island nation to sign up local agents. “It’s not every day you can get all these ambassadors and commercial counselors in one room and just go up and talk to everybody,” Martin says. “We were going to come out here anyway, but they certainly made it a heck of a lot easier.”
Drumming up business, of course, is Martins problem. But increasingly, diplomats are getting involved in specific transactions, particularly when a foreign government has a role in the buying decision. U.S. officials have successfully pressed China to allow a larger presence for U.S. carmakers like Chrysler, which assembles Jeeps in Beijing. Last week Hong Kong awarded a consortium led by Sea-Land Servicing a half share-worth $2.6 billion-in the construction and operation of a new container terminal, after Consul General Richard Williams spent months emphasizing how the American-led group could infuse competition into cargo handling. When German officials appeared to favor a French proposal to build the $700 million Friedrichstadt-Passage office and shopping complex in the former East Berlin, New York developer Tischman-Speyer asked the embassy in Bonn to write a letter on its behalf. “They were very effective,” says chairman Jerry Speyer. “They knew exactly where they had to go.” Tischman-Speyer won a 45 percent stake in the project, which got underway last month.
Trade diplomacy isn’t new, of course; U.S. diplomats have been battering away at foreign import barriers for years. But lobbying on behalf of particular companies is a very different sort of work. Discretion is everything, and press attention is unwelcome. “The transactions generally take place quietly in a meeting, and there’s no publicity, so government officials are not embarrassed,” explains one official in Washington. Nonetheless, using diplomats as salespeople has its dangers. Gregg has helped persuade the South Korean government to hire U.S. architects to design a new airport terminal, but some in Seoul consider his hard sell excessive. In China, U.S. commercial interests ran headlong into other diplomatic concerns. Using contacts in the local government, the U.S. Consulate in Guangzhou helped Boeing Co. plan a pitch to China Southern Airlines last spring. Then, in September, the Bush administration angered China by agreeing to sell fighter planes to Taiwan. The Boeing deal is on hold-and French diplomats are aggressively trying to persuade China Southern to buy Airbuses instead.
Diplomatic salesmanship has less obvious complexities, too. The governments of rival companies can take offense; when Eagleburger recently wrote the Czech Energy Commission in support of American bidders, a German official called to complain. And then there’s the question of whom to help. “The biggest problem we have is defining what is a U.S. company,” one ranking official confesses. Officially, the State Department lets diplomats work on behalf of U.S.-owned companies that want to sell products with at least 51 percent U.S. content. In practice, however, there’s no neat line. When Canada’s Northern Telecom Ltd. bids for a sale against AT&T, the Americans can count on the local embassy’s aid, but when the Canadian company’s U.S. subsidiary is doing the bidding, the diplomats must remain neutral.
How real is the Foreign Service’s transformation? Arthur Kobler, who recently left for the private sector after 25 years as a diplomat, says that while it pays lip service to its new commercial role, State’s heart is still in traditional diplomacy. “There remains a clear bias in favor of political officers,” he says. “The apparatus still is not geared to the post-cold-war reality.” Eagleburger admits the difficulty of reorienting the bureaucracy, but he says that success in promoting trade is now part of every diplomat’s personnel file. With exports certain to be a front-burner issue in Washington for years to come, the most vital of the diplomatic arts may soon be the art ofthe deal.
