‘Frustrated and helpless’: In China’s fight for global influence, diplomacy is America’s greatest weakness

The weakest diplomatic muscle

The United States Embassy in Panama has diplomats who focus on trade, which is not surprising given the canal’s importance to global commerce. (According to key measures, the United States is the first user of the canal, followed by China. The canal is so important to Washington that, although the United States transferred control of the passage to Panama there are more than two decades they retain the right to take military action to secure it if necessary – an arrangement well known to Beijing.)

Still, American diplomats in Panama and far beyond say that if any part of America’s diplomatic infrastructure needs help, it is the US and Foreign Commercial Service.

The Commerce Department is part of the Department of Commerce, not the state. His responsibilities include helping to increase US exports and removing trade barriers, with the goal of leveling the playing field for US companies that must comply with US laws such as the Foreign Corrupt Practices Act. It is present in US diplomatic missions in approximately 78 countries, including Panama. That’s less than half of the countries in the world, but the trade department points out that it’s in the places that account for most US exports.

In 2014, the Sales Department had approximately 1,750 employees. In the years that followed, it lost hundreds of employees to attrition, sluggish budgets, and other reasons. With some fluctuation, manpower fell to about 1,430, including 250 foreign service officers. Under Biden, he is trying to recoup those losses, according to a Commerce Department official who presented the numbers to POLITICO.

The Biden team is looking for other ways to emphasize such diplomacy; As part of the State Department’s modernization plans, Blinken has pledged to increase the number of diplomats focused on topics such as commerce, including « economic officers » whose responsibilities include business reporting and related activities in other countries.

During Tibor Nagy’s tenure as Assistant Secretary of State for African Affairs under Trump, he surveyed embassies under his responsibility to find out how many diplomats were focused on trade issues. “I said, ‘Tell me, how many positions does the Chinese Embassy have to promote trade and investment, as opposed to the US Embassy?’ And, overwhelmingly, it was like three or four positions for the Chinese compared to an American,” Nagy recalls. “And then, in Africa, we have embassies that … their staff is so small, that we have someone who could be, say, in charge of trade advocacy, trade diplomacy, but they do the visas in the morning. It was absolutely ridiculous. »

Wei readily acknowledges that while US diplomats are focused on promoting issues such as good governance, democracy and human rights, Chinese envoys are more eager to promote economic ties. « A good business relationship is one of the foundations, or the most important foundations, of a bilateral relationship, » Wei said. He marveled at how often U.S. private sector companies ignore bidding opportunities in Panama — « They’re not interested, » Wei said. « They never come. »

US private companies consider many factors when evaluating overseas projects. Corruption is one of them, but it’s a global problem, not just in Panama. The FCPA prohibits these companies from engaging in foreign bribery. In a sense, the law provides companies with protective cover when approached for such programs, but it can also thwart US efforts to compete with companies from places without such rules.

Other factors include market size, whether the project is large enough to generate a profit, and labor costs. Many countries in Latin America in particular struggle to make the case that they are worth the risk and time compared to more populous countries in Asia, where labor costs may be lower.

« Especially in smaller countries, on the right, even sort of Perus and Ecuadors, but especially in the Caribbean and Central America, countless government officials have told us that we’re just not interested in business. Americans, » said Roberta Jacobson, a former senior State Department official who covered Latin America and served as U.S. ambassador to Mexico. Even when American companies are interested, Jacobson added, they risk being underbid by Chinese or other companies whose governments subsidize their work.

Among the American companies Feeley said he approached to bid for the construction of the « fourth bridge » in Panama was Bechtel, the construction and engineering giant. A Bechtel spokesperson said that in passing on the fourth bridge project, « we had to prioritize key resources and where we had a higher probability of winning and executing successfully. » The spokesperson also suggested that in the long run, Bechtel serves American interests abroad by doing high-quality work.

« Bechtel competes for and frequently wins major projects overseas, but the competition to win is intense, including against state-backed companies in other countries, and the risks can be significant, » said the spokesperson in a statement.

Some foreign diplomats say the United States needs to offer more incentives to private companies to undertake projects in regions like Latin America or Africa. But sometimes, say American diplomats and American analysts, the best approach is not to rely on the American private sector. Instead, it is better to induce a foreign government to look to US-allied companies, such as Japan or South Korea or any number of European countries, rather than China. It’s one of the reasons the Biden administration, which has worked hard to mend relations with allies frayed by Trump, is pushing multilateral economic initiatives like PGII. But such efforts also require a greater US diplomatic focus on the trade space.