In an increasingly competitive international environment, economic diplomacy and bilateral agreements have become essential for governments to promote trade and encourage international investment. Economic diplomacy practices and policies are effective tools for opening markets, strengthening trade ties and attracting global investors to strategic sectors.
Economic Diplomacy: The Fundamental Role of Bilateral Agreements
Bilateral agreements, such as free trade agreements and economic cooperation agreements, serve as bridges to facilitate the exchange of goods and services between nations, removing trade barriers and fostering a more attractive business environment. In 2023, more than 75% of OECD countries had bilateral agreements with multiple trading partners, resulting in a 15% increase in international transactions.
Attracting Investments and Strengthening Commercial Ties
Economic diplomacy plays a direct role in building an environment of trust for investment. Countries such as Japan and Canada, for example, have used their embassies and diplomatic missions to mediate negotiations with infrastructure and technology sectors, boosting the flow of foreign capital and promoting strategic cooperation in innovation sectors.
Incentives and Stability: Policies that Reduce Barriers and Stimulate Growth
Offering tax incentives, simplifying visa processes for investors and implementing legal certainty policies are common practices in economic diplomacy. According to the World Economic Forum, around 60% of international investors consider regulatory stability and tax incentives as decisive factors when choosing a country to invest in.
Success Story in Economic Diplomacy
- United States and Mexico: The T-MEC (Treaty between Mexico, the United States and Canada) represents a success story where close economic relations and proactive diplomacy have resulted in bilateral trade of more than US$1.4 billion in 2022.
Governments can use economic diplomacy to go beyond opening markets: they can also strengthen the global presence of their companies and attract vital investment for sustainable and technological development. The effectiveness of bilateral agreements, combined with incentives and legal certainty, is a powerful strategy for transforming international trade and investment into levers of economic growth.
At Bring Consulting, we are committed to helping governments and businesses navigate the complex global landscape by identifying trade and investment opportunities that promote sustainable growth. Want to know how economic diplomacy can open new paths for your business?
