Edward Alden of CFR has a blog post telling us that new Secretary of State John Kerry will continue Hillary Clinton’s signature “economic statecraft” initiative, which worked like this:
… Clinton began to use State Department assets to strengthen the U.S. economy. That meant deploying embassy staff to promote exports from U.S. companies and to attract foreign investment to the United States.
Kerry’s first speech as Secretary focused heavily on this issue. Here is one passage:
[There is] a company up near Dulles called Orbital Sciences Corporation. With the help of the persistent advocates of our Embassy in Bangkok, it beat out French and Russian competitors to build Thailand’s newest broadcast satellite. Virginia’s Orbital is now teaming up with a California company called Space Exploration Technologies that makes satellite equipment. The deal that our Embassy helped secure, valued at $160 million, goes right back into American communities from coast to coast. That’s the difference that our embassies abroad actually can make back here at home.
And these success stories happen in partnership with countries all over the world because of the resources that we’ve deployed to bring business and jobs back to America. These investments, my friends, are paying for themselves. We create more than 5,000 jobs for every billion dollars of goods and services that we export. ...
These practices may have intensified in recent years, but they aren’t exactly new. Governments have been doing these sorts of things for quite a while. But talking about it publicly, and selling it as an important policy, does bring it into the spotlight more.
Obviously, the U.S. government isn't the only one doing this. I would guess it's a pretty widespread practice. (Although I don't know if anyone has ever tried to quantify and measure it -- perhaps there is a good paper in there somewhere).
Just like with other government intervention in support of domestic industry, there is the problem of how these actions distort markets and create trade conflict. Isn't this just another form of economic nationalism? And if it is, do we need trade rules in order to keep it in check?