The Role of Commercial Diplomacy in Promoting and Facilitating International Business

In the era of globalization and intense competition, commercial diplomacy is a growing concern of governments and an important factor of international business development. It provides a government support to internationally expanding companies which helps them to identify and pursue international trade and investment opportunities. The main purpose of this paper is to examine the role and challenges of contemporary commercial diplomacy in business promotion and facilitation of trade and investment between countries. In order to meet this research goals, various methods are used, such as the critical review of existing literature, analysis of relevant legal and official documents and the case study of the Polish model of commercial diplomacy. The research showed, that with transformation of the world's economy and trading system, the scope and focus of commercial diplomacy tends to change. The activity of commercial diplomats increasingly focuses on promoting national brand and strengthening the image of national companies, expanding tourism and attracting FDIs. Moreover, one of the main priorities of commercial diplomacy is to support small and medium companies (SMEs) in the first steps to be made in foreign market. SMEs have a growing capacity to drive the economic development of a nation, but at the same time, in their internationalization process they have a higher exposure to trade and marketing barriers, as compared to large companies. With the technological revolution the function of supplying information has also evolved towards discovering more tailored and “hidden” information and public relations. Global challenges raise many questions of how to organize commercial diplomacy effectively and efficiently and each country applies its own model of CD services, with specific goals, structures and resources. The Polish organization model of commercial diplomacy is currently undergoing major reform in the course towards improving the government-business relationship and increasing the efficiency of trade and investment promotion activities through eliminating of tasks duplication. The research on commercial diplomacy provides a deeper understanding of its rationale and the complex determinants, and it allows to formulate some indications for governments and businesses on how to better use diplomatic tools in achieving internationalization goals.