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U.S. DEPARTMENT OF STATE
95/04/20 BRIEFING ON BUSINESS OUTREACH EFFORTS
Office of the Coordinator for Business Affairs
[EXCERPTS FROM APRIL 20, 1995, PRESS BRIEFING]
UNDER SECRETARY OF STATE
FOR ECONOMIC, BUSINESS AND AGRICULTURAL AFFAIRS
SENIOR COORDINATOR FOR BUSINESS AFFAIRS
THURSDAY, APRIL 20, 1995
MR. JOHNSON: Good afternoon, ladies and gentlemen. We're going to
begin today's briefing with a special briefing by Under Secretary of
State for Economic, Business, and Agricultural Affairs Joan Spero, and
the newly designated Senior Coordinator for Business Affairs, David
Ruth. They're going to talk about the State Department's business
outreach efforts -- that is, our efforts to better assist U.S. companies
doing business abroad and to consult with business on a more systematic
basis in order to ensure that the views and the concerns of the American
business community are heard and fully taken into account in the
Department's policy-making process.
The Secretary's decision to establish the position of Senior
Coordinator for Business Affairs reflects his personal commitment to
giving U.S. economic interests and support of U.S. business top priority
in the formulation of our foreign policy.
David Ruth recently came to the Department from American Express to
serve as Senior Coordinator for Business Affairs, and we welcome him.
Under Secretary Spero and David will be glad to answer your
questions at the conclusion of their remarks.
UNDER SECRETARY SPERO: Thank you. Good afternoon. I'll start off
with some general comments about what we're doing in support of our
economic mission here at the State Department, and then I'll turn it
over to David, who will go into more detail about some of the specific
work that we're doing for U.S. companies. Then we'll be happy to take
Secretary Christopher has said that the promotion of economic
security is one of his highest priorities, and we're trying to carry out
that mission and those priorities in three principal ways.
First of all, we're working to build and modernize what we call the
economic architecture for the post-Cold War world. Many of you are
familiar with the preparations that we're now going through for the G-7
Summit in Halifax. We are doing this not only in a multilateral way,
but regionally and bilaterally. All of this is with a view to creating
an international system that is more open, more market-oriented, and
that is better for world prosperity, and we believe better for world
In doing all of that, we are increasingly working here with U.S.
business. Let me just give you a couple of quick examples. One is
APEC, the Asia-Pacific Economic Cooperation forum. The purpose of APEC
is to foster open trade and investment in the region.
In my view, APEC is an example of what I would call a modern,
international organization in that it integrates business directly into
its activities. Business sits at the table in the APEC working groups;
they roll up their sleeves; they deal with very practical problems like
telecommunications or energy or transportation. So they are part of the
Business also plays a very important formal and informal advisory
role at the policy level. In fact, business was quite important in
developing the agreement in Bogor last November which called for the
achievement of free trade and investment in the region by 2020, and we
continue to work very closely with the business community as we are
trying to figure out how to get from here to 2020.
Another couple of examples of the role of business in this new
post-Cold War architecture. I've just come back from India where we re-
launched after five years the Indo-U.S. Economic Commercial Sub-
Commission. I co-chair that with the Deputy Finance Minister of India.
We and our Indian counterparts agreed to focus in this coming year
on the issue of developing India's infrastructure. That's a subject
that's of great interest to U.S. business. In fact, we work very
closely with U.S. and Indian businesses as we develop the agenda for the
meeting, and in fact, we will have a working group of this sub-
commission composed exclusively of Indian and U.S. companies. That's a
model that we are applying elsewhere.
We have established the so-called Gore-Mubarak initiative -- the
U.S.-Egypt partnership for economic growth and development. I traveled
with the Vice President to Egypt to have the first meeting of that
commission within the last month.
That commission also has a joint private sector commission that
will work in very practical ways to foster the growth of the private
sector in Egypt and to foster greater U.S.-Egyptian trade and
The second thing we're doing on the economic front is using
economic policy to support peace and democracy, the more traditional
missions of this Department.
I personally have been very much involved in the economic side of
the Middle East peace process, and again here, the private sector is
playing a very important role. There was a meeting, some of you were
there, in Casablanca last October. There will be a follow-up meeting in
Amman this October.
Those meetings involve not only government leaders but business
people, and they were designed to foster economic cooperation among
businesses in the region, designed to support not only prosperity but
also the peace process.
We are working now on a Middle East Development Bank. Again, that
Development Bank will be heavily focused on lending to -- should it
actually be agreed and implemented -- will focus heavily on lending to
the private sector.
We're doing similar things in Russia and the Newly Independent
States, Haiti, and South Africa -- involving the business community
directly in our activities.
Finally, we are -- and this is really what we want to focus on
today -- we also work on a very practical level to ensure that American
workers and American business can compete in the global economy. That's
what we call the "America Desk." The message has gone out in the
Department and abroad that economic policy matters and that looking out
for U.S. business matters.
The embassies, we believe, are absolutely critical in this effort.
From my ex-business perspective, I see the embassies as a distribution
channel, a delivery service for a lot of the products and services that
the Department offers to business. We do a couple of things primarily.
First, we support U.S. business in its efforts to export and invest
in a variety of countries around the world. We work closely with our
colleagues in the foreign commercial service, and where there is no
foreign commercial service, we do it ourselves.
Increasingly, we're finding that the leadership of the ambassador
and the expertise, knowledge, and contacts of the economic and political
officers in the embassies are very important tools for supporting
There's another thing we do, and I don't think this is recognized
or understood enough, and that is problem-solving on behalf of U.S.
One of the biggest problems we deal with on a day-to-day basis,
that our businesses face as they operate abroad, is intellectual
property. We're constantly working with governments abroad to urge them
to develop, to pass, to implement, to enforce intellectual property
Another area: We've negotiated bilateral investment treaties
around the world that provide fair treatment for our businesses, and we
work with local governments to make sure that those treaties are
Another long-term example that I'll cite briefly is dealing with
the problem of corruption. One of the major issues facing our companies
around the world -- I hear from them constantly when I travel -- is the
practice of bribery, which is prohibited by U.S. law but is fair game in
a lot of countries.
We've pressed hard with other developed countries through the OECD,
and we've successfully concluded a code on bribery. That's just a first
step. We're now pushing the other developed countries to develop and
implement things -- things that we would take for granted here, like you
can't deduct bribes from your tax return. (Laughter) You can in some
countries. We think that's kind of basic.
We're also taking the show on the road to developing countries. At
the Summit of the Americas, for example, last December, one of the
initiatives that we agreed on was expanding the work on combatting
corruption, which is increasingly seen as undermining democracies around
We've been working hard for the last couple of years. I think
we've been able to bring about a dramatic change in the way the
embassies do business. Business people, whom I've known for many years,
tell me that whereas before they never would have thought of going to
the U.S. embassy, now it's their first port of call when they go to do
Our goal for the next two years is to try to bring that same
perspective to Washington, to bring business closer to the Department
itself. To explain some of that, I'm going to turn the podium over to
MR. RUTH: I have some of my own private sector experience with
government to draw on, but I've talked to a number of companies over the
past month or two to see what it is they want from State and what it is
they feel they get and where we need to do better.
First of all -- and Joan has described much of this -- they want
advice and orientation as they're planning strategies for a market.
They want to know who's who, what's the politics, what's the economic
policy, what's the current state of relations with the United States,
and where are some of the leverage points.
Second, they want assistance with business problems, either in
policy or sometimes very practical things like making sure that they can
get in the door to make a bid. In some instances, they want advocacy,
which is to say, a visible expression of U.S. official interest, which,
coming from an ambassador or a senior official here at the Department of
State, can often be extremely effective in supporting a business deal,
particularly when there's government support for our competition.
In the past, State wasn't always seen as ready or willing to use
those assets and exercise our influence. Frankly, this was often
frustrating for a business, especially when other governments were
acting on behalf of their companies' own interests. That has changed
over the last few years, particularly in the embassies.
However, companies still tell us that it's difficult for them here
in Washington; it's difficult to find their way around this building;
it's difficult to get a fast response sometimes. What is more, they
don't always feel as though their views are as fully integrated into the
policymaking process as they should be, which is the point of my office,
which is the point of the creation of the role of the Coordinator for
Our role has three separate parts. The first is to be a service
center for business, a first point of contact for companies, to help
them tap into the resources of the Department. And part of that is
really speed. When a company is trying to make a deal, sometimes being
able to move fast, get a fast word of support, some fast information,
will make all the difference between them getting it or somebody else
getting it -- a foreign competitor getting it.
Part of our service is going to be to keep track of companies more
closely so we're not just giving them one-shot advice, but we're
following them through the building and helping them to make sure we've
got effective follow-up and effective action.
Another extremely important part of this, from my own experience,
is that we are now coordinating much more with other federal agencies --
the Department of Commerce, the Export-Import Bank, the Treasury
Department, a whole range of other agencies that are involved in trade
promotion work. And we coordinate among ourselves more than used to be
the case. It used to be you'd have to go door-to-door and make sure
that Commerce was talking to State was talking to Treasury. We now can
bring that all together.
There's an Advocacy Center that works interagency in a trade
promotion coordinating committee, that is also an interagency body that
allows us to talk to each other, and that works a lot better than it
So this kind of service is really -- it works for a big company
like my former company, but it also is particularly useful for the
smaller and the medium-size companies that don't have the Washington
resources, don't know their way around the building, and need a first-
point of contact and some additional assistance.
The second part of our role will be to encourage outreach to the
business community to make sure we're consulting business as we make
policies that affect their interests. A lot of this happens as a daily
matter here and has for years. People talk to business about things
like civil aviation, commodities policy, telecommunications policy, a
whole range of things where business has a direct interest and where
State has a lead negotiating role.
And as Joan has outlined, there's a number of new policy
initiatives in APEC, in India, in the Middle East, where business is now
being brought into the process more closely and earlier and more
intensely to make sure the outcome reflects their economic interests.
We'll also be helping the Secretary and other senior policy-makers
get the benefit of hearing business views, and the Secretary is already
doing a lot of this. We have a lot more planned to really bring people
through the door so that on a regular basis we're getting private sector
I should hasten to point out that business is not always going to
be happy with the policies we decide on in the end. The Department has
responsibility for a wide range of cross-cutting interests, everything
from human rights and national security matters and environmental
issues. These are not always going to work in favor, in support of what
business would have us do.
However, even in these areas, we have a particular responsibility
to make sure that we hear business concerns about them, understand the
economic costs, the economic impact, and weigh those concerns in the
Finally, the last piece is really making all this permanent. We
will be working to integrate support for business as a permanent part of
the State Department culture. We're already involved heavily in
training. We're training people when they come into the Foreign Service
for the first time. We're training Desk Officers. We're training DCMs,
talking to the Ambassadors as they go out the door, and a lot of that is
already having its effect.
So I'll conclude. The three pieces that we're doing are -- in
fulfilling this mission to use the State Department's assets more
effectively for business really are direct assistance to companies,
greater outreach on policy issues, and making this a permanent part of
the culture. Thank you.
Q I'd be curious, how do you prevent individuals in embassies
who are out there now charged with this new intensity mission to help
business to treat all companies fairly? You know, I could see where a
company would go to a political officer and say, "You know, if you ask
the Ambassador to make this a high priority issue, if you leave the
Foreign Service in five years or so, you can be assured of a job." How
do you make sure that there's a --
MR. RUTH: There's clear ethical guidelines that apply to all
Foreign Service Officers, and every year -- I've just been through it
for my first time -- every officer must go through a briefing that
spells out in great detail exactly what one can talk to a company about,
especially if a company might be a potential employer. So there's very
clear guidelines on that front.
The other probably more common issue is what do you do when two
American companies, both of whom are going to be exporting products from
the United States, come to the embassy and are involved in the same bid?
There we're committed to give them exactly equal treatment. Before we
do any advocacy, we do a due diligence process, which we ask the company
to tell us a number of things about what they're going to do, how much
they're going to export, who their partners are, and if they know of any
other American competitors; also, what other foreign government
involvement there is.
Based on that, if there is more than one American competitor, the
Ambassador, who's the ultimate arbiter of this, goes in and really
speaks on behalf of all of the American bidders. If it comes then down
in a re-bid where there's just one American company, the advocacy will
go directly to that point.
Q Mr. Ruth, on your last point involving competing points of
view, a lot of people -- a very robust part of the American economy is
the export of conventional arms, aircraft, armored vehicles. A lot of
people, some of them in this building, think that one of the problems in
the world is that there are too many arms awash in the world,
particularly in places like south Asia.
Given that an arms manufacturer comes to you, what is the
philosophy that the State Department uses? On whom is the burden of the
proof to -- in other words, if there is no compelling reason not to
sell, then will you promote the sale of arms? Or is there a different
process or mechanism working here?
MR. RUTH: It's a fairly clear standard where our foreign policy
interests will determine how much we would support a defense sale like
that. Commercial considerations will be there, but the security and
foreign policy considerations weigh in quite highly. Our challenge
really is to make sure that they don't weigh in -- that we are making
that we're up to date on what the technology is. Is the technology
still defense-oriented? Is it defense consistent? But where there's a
foreign policy concern about those exports, that will weigh out.
Q And that would prevail over a company saying that if we don't
do it, the British or the Germans or the French will do it?
MR. RUTH: It may, although the availability of the product
elsewhere will be weighed into the decision, too, and sometimes that
would be compelling. But our export controls policies would be driven
by our foreign policy objectives.
Q So are you saying that ultimately, when push comes to shove,
the State Department still puts a priority on foreign policy, as opposed
MR. RUTH: There are a number of competing priorities here, and
what's happening now is business and economic interests are higher on
the list than they used to be. The Department still has to weigh a
whole range of other considerations, and the challenge is to make sure
that we don't completely ignore and don't push the economic issues off
the table when, in fact, those are real, vital American interests.
It's not when push comes to shove. There's more of a discussion
now and more of a review of economic impact before you make a policy
decision, and that's really the objective. But ultimately foreign
policy objectives on security matters, on a range of other things might
well weigh out if they're vital U.S. interests.
Q How long have you been on the job?
MR. RUTH: Just about two months.
Q Would the State Department refuse to help a company if there
was a problem -- like with FDA -- or if there were health issues
involved? For instance, if a tobacco company wanted to dump cigarettes
on a foreign market, would the State Department help them further that
MR. RUTH: For legal products, we would assist companies. We do
ask questions about environmental impact and things like that. Those
come into the due diligence process as we're asking companies the
information we need before we go in and support them or advocate on
But for a product that's legally available, yes; we do support a
whole range of products.
Q How are you getting the word out to American companies about
all these new services and new philosophy? Are you being proactive in
approaching smaller-sized American companies, saying "We can offer you
these services overseas"?
MR. RUTH: Yes. Mostly we've been talking to Washington-based
associations and getting the word out through them and through a lot of
those larger companies. But we've started a process -- it's harder to
reach small business to make this available, but I met this morning,
actually, with the National Association of State Development Agencies,
which is the state-level people involved in economic development. Those
are a good distribution network for small business. They're talking to
small business all the time. Small business is more likely to come to
the city or the state level for help.
So once we connect with them and get our phone number and services
out to them, that will be a channel to come back. But there's a lot
more to do. I've started traveling around the country to sort of talk
about this, too, and to make sure that smaller business-level people
Q I just missed something in the preceding question. You said
that if a product was legally available, you'd essentially go to bat for
that company. Does that mean legally available in the U.S., or -- for
instance, a pesticide that's banned in the U.S. but is available in
other countries? Would you --
MR. RUTH: I don't know the answer to that question. I'll have to
look into it and get back to you. I don't know exactly how far we would
go and how much we would look at it. I know on environmental issues it
weighs into the consideration, but whether the standard would be U.S.
legal, international legal -- what standard, I'm just not sure. So I'd
have to get back to you on that one.
Q How much of the business service offering advice you give
here -- how does that duplicate what's already on offer at the Commerce
Department, and why would a company come to you rather than -- come here
rather than go to the Commerce Department?
MR. RUTH: Commerce and State have different but complementary
functions. The Commerce Department, which has got a very active export
promotion function, particularly in the last couple of years, can be
very single-minded in its pursuit of business and can be much more
focused and single-minded.
They come to State because partly sometimes policy will affect them
constructively where we're leading policy efforts, as Joan talked about.
Sometimes it cuts the other way on things like export control. So they
come to talk to us about that because they need to work through the
But they also come to us to access the system. The people here --
the embassy network and the State Department people in the embassies --
tend to be people who have more policy-level contacts with the
government, whereas the Commerce Department's commercial service person
is setting up trade shows, really meat-and-potatoes contacts, person-to-
person trade leads, information sharing.
The State Department person has a complementary function which is
more insight into what's going on in policy. They're more likely to be
the ones involved in trade negotiations so the company can feed into
that. They'll have policy-level advice.
So that's one of the differences, and the other difference is some
of the resources here at State. A lot of what companies come to meet
for now is, as they're thinking about a region, they want a briefing
from people who are sort of looking at the overall politics, economics,
security issues in the region and help them make a decision about where
to go, what to do, and what to do when they get there.
So it's different levels of advice, but it's complementary.
Q Thank you.
MR. RUTH: Thanks.
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