A TRADE ISSUE:
Getting to the Core of All the Elements of the Issue
diplomacy is focused on the resolution of trade-related policy issues.
Any policy or government action can become a trade-related policy
issue if it impacts on international commerce, i.e., international trade
and investment in goods and services.
As a result of the globalization of economic activity, the range
of issues that can become the subject of attention by commercial
diplomats is quite wide, ranging from traditional trade policy tools
such as tariffs and quotas to domestic policies such as health and
environmental standards, agricultural support policies, banking
regulations, and laws on bribery and corruption. Commercial diplomats
have the task of resolving such issues through analysis, advocacy,
political action, international negotiation and dispute settlement. The
purpose of this discussion is to set out a rigorous analytical framework
for analyzing any of the issues that become the focus of commercial
do Trade Related Policy
Issues Become the Subject of Commercial Diplomacy?
the analytical questions a commercial diplomat must ask, we should
examine how a policy issue becomes the target of commercial diplomacy.
The initial impetus, more often than not, comes from an
enterprise or industry most directly affected by a policy action or
government regulation. They
can make a policy measure the focus of commercial diplomacy by raising
it as a trade related policy issue with foreign decision makers, or by
enlisting the advocacy support of lobbyists, politicians, legislators
and home government officials. Of
course, neither the home government nor the foreign government will
accept all trade related policy issues raised by enterprises as
legitimate issue for government-to-government discussions or
negotiations. In order to persuade government officials to involve
themselves in any effort to address a trade related policy issue,
commercial diplomats representing the enterprise have to be able to
demonstrate (a) that the commercial problem they have identified is
caused by an identifiable policy action, (b) that the impact of the
measure on international commerce is substantial, and (c) that the
policy action constitutes a violation of an international trade
provision, or at a minimum, that the government could achieve its
desired social objective through alternative measures that create less
of a burden on international commerce.
Often, trade or
investment problems identified by businessmen as trade-related policy
issues turn out to be nothing more than a commercial issue, e.g., a lack
of sales due to poor marketing or product design, a low level of demand
by consumers, poor management or uncompetitive pricing. In order to
persuade government officials to treat a commercial problem such as low
export sales as a policy issue the business or industry seeking the
change in policy needs to demonstrate that the low sales are the result
of a policy action such as a burdensome regulation, rather than the
result of commercial factors such as poor product design.
Even where a
policy measure can be identified as the source of a commercial problem,
the commercial impact may be too small to warrant policy advocacy or
policy action by officials. Taking time out to investigate an issue, to
advocate policy changes and to build the consensus necessary to
implement changes can be costly in human resources. Therefore, someone
from the private sector who wants to persuade officials to take time out
from their busy schedule to investigate a policy issue and if necessary
to become an advocate for a change in policy will need to demonstrate
why the issue is important enough to warrant a commitment of time and
Third, even if a
current policy can be shown to have an undesirable impact on
international commerce, there may not be a sufficient rationale for
changing policy. The targeted policy action could be fully consistent
with international rules and there may not be a viable alternative for
pursuing a legitimate social objective. In such cases, even if the
policy can be shown to have an important impact on international
commerce, there may not be sufficient rationale for changing the
measure. Advocates for policy change therefore have to establish either
a legal and/or a policy basis for such a change.
The impetus for
addressing a policy issue through channels of commercial diplomacy can
also come from an issue oriented nongovernmental organization that
believes a trade related action is adversely affecting the achievement
of a key social objective. In
order to persuade trade officials to initiate discussions or
negotiations on such an issue, representatives of the organization have
to make the case that the trade measure has an identifiable, adverse
impact on a legitimate social objective.
In other cases, the nongovernmental organization may wish to
persuade trade officials that a trade action, such as the imposition of
an import ban on certain goods and services is necessary to achieve a
desired social objective.
impetus for a change in a trade-related policy can come from either a
foreign government or the home government itself.
The foreign government may pursue such an initiative as part to
reduce barriers to the country’s exports. The home government may
pursue such an initiative to improve the economic efficiency of its
economy or to reduce consumer prices.
Officials responsible for implementing the initiative will need
to make the case that proposed changes in the policy measures at issue
are necessary to achieve the desired trade policy objective, that the
proposed changes will not undermine an important social objective of the
government, and that a change in the policy can also be justified in
terms of good governance and the more effective pursuit of the relevant
Defining the Issue
To summarize, to
qualify as a legitimate issue for commercial diplomacy, a trade related
policy issue has to have a clear link with international trade or
investment, the link has to be substantial, and there has to be a
justifiable rationale for the desired change in policy. A statement of
the issue needs to describe succinctly the policy measure that is being
challenged, the nature and magnitude of the impact on international
commerce that creates the desire for a change in the policy (or the
nature and magnitude of the impact on any social objectives outside of
the trade arena that is creating the desire for a change in a trade
measure), and the rationale and justification for the desired change in
the policy. Such a statement of the issue constitutes a definition of
the problem that is to be addressed through commercial diplomacy. It
should be short and to the point, i.e. no more than a paragraph of few
definition of the problem is the essential foundation of all efforts in
commercial diplomacy. It
provides the basis for a clear and well-focused analysis of the issues
that need to be addressed in solving the problem. It also provides the
basis for effective communication of the issue with superiors, decision
makers, other stakeholders and potential allies.
As you learn more about the subject and the issues involved you
will need to update the statement of the issue/definition of the
problem. A need for a change in the definition of the issue may arise as
you find out more about the nature of the policy action and the social
issues the policy is intended to address, the domestic laws and
international rules that apply to the case, or the issues raised by
other stakeholders or by foreign governments.
Updating your statement of the issue regularly will help you to
maintain a clear direction for your analytical and advocacy efforts, and
for clear communication of the issue to others.
the Issue in Depth
the issue, the commercial diplomat must analyze the issue in depth.
There are many aspects to such an analysis.
analysis of the commercial issue has to establish the impact of a
policy change on the commercial interests of the key stakeholders at
home and abroad.
policy analysis of the targeted policy measure has to establish the
social policy objectives served by the policy measure, and the
alternative policy tools available for achieving the desired
political analysis of interested stakeholders has to lead to an
identification of the key stakeholder and their political means for
influencing the decision-making process at home and abroad.
legal analysis has to identify the relevant domestic and
international legal provisions, how these legal provisions can be
applied to the issue that has been identified, and any legal issues
of interpretation that may affect the application of these legal
provisions to the specific case.
macroeconomic analysis has to provide an estimate of the economic
impact of a policy change on the national economy.
institutional analysis that identifies institutional bottlenecks or
other institutional issues related to the decision-making process.
public relations analysis which determines whether and if so how the
press and public opinion are likely to affect the decision-making
commercial transactions are at the heart of commercial diplomacy. The
whole purpose of commercial diplomacy is to facilitate exports, imports,
and foreign investment activities by making sure that government
policies directed at a wide range of social objectives do not impede
these transactions more than is necessary to achieve the desired social
goals. We thus have two key focal points for an analysis of a trade
related policy issue that is a candidate for commercial diplomacy,
namely the commercial aspects of the issue and the policy aspects of the
commercial rationale drives the need for commercial diplomacy, the
commercial diplomat must develop an in depth understanding of the
commercial impact of alternative policy decisions. The commercial impact
needs to be estimated in terms of changes in exports and imports,
investments, total sales revenue, market share, growth prospects, costs,
employment and wages. In order to make these estimates, the commercial
diplomat needs to be able to know enough accounting to be able to read
the income statements and balance sheets of individual enterprises, and
thereby gain a good understanding of the current condition of the firms
or industry impacted by the policy decisions at issue. The commercial
diplomat also needs to know enough economics to be able to estimate the
impact of various policy decisions on future economic activity. The
commercial diplomat does not need to be a professional accountant or
economist, but does need to have a basic grounding in these subjects.
The questions a
trade analyst should ask about the commercial are as follows:
are the stakeholders with a commercial interest?
is their commercial stake in the outcome?
does the issue or a solution to the issue affect them?
is the impact on their exports and imports? On domestic sales?
Overall revenues? Costs? Profits? Market Share? Future growth
trade policy was all about tariffs and quotas, and these policy
instruments remain an important, though much less dominant, aspect of
commercial diplomacy. Increasingly, however, the government policies
that are the subject of commercial diplomacy today are aimed at a wide
range of domestic social objectives such as health, safety, environment,
consumer protection, stability of infrastructure networks, and so on.
The policy issues that arise with respect to tariffs and quotas are
relatively simple compared to the policy issues that arise with respect
to complex domestic regulations. The policy issue with respect to tariff
and quota decisions usually comes down to a trade off between the
protection of certain domestic economic activities from international
competition and the economic efficiencies and new growth opportunities
that can be derived from increased trade. It also involves a
redistribution of domestic income between shareholders and workers in
protected industries on one hand and consumers as a whole and producers
in export-related industries on the other hand.
analysis challenge is much greater when the policy issues involve
domestic regulations. The
challenge for the commercial diplomat in such cases to identify
alternative policy actions that will achieve the same social benefits as
the existing policy instruments, wile reducing or eliminating the
adverse impact on international commerce.
In order to arrive at this outcome, the commercial diplomat first
needs to identify the social objectives served by the targeted policy
action and how the policy action achieves the desired objective.
Identifying the desired social objectives may require extensive
legal analysis as well as n interactive dialogue with regulators. We
need to know what legislators had in mind when drafting the laws
underlying the regulations involved, and we need to know how the
perception of the social objectives may have evolved over time.
Understanding how the regulation in question achieves the social
objective, and how alternative policy actions could be crafted to meet
the desired objective may require the collection of a considerable
amount of scientific knowledge about the biology, chemistry or physics
underlying the regulatory issue.
The questions a
trade analyst should ask about the domestic policy issues are as
policy areas would be affected by any actions to solve the trade
problem? What specific policy objectives would be impacted?
do policy objectives relate to trade rules
are objective performance measures?
alternative policy measures are available to achieve the desired
combination of measures would solve the trade problem and preserve
other legitimate policy objectives?
Political Stakeholder Analysis
challenge for a commercial diplomat is to build consensus in support of
a particular outcome in trade-related policy disputes.
Decisions on trade-related policy issues get made in a highly
political environment. To
build a viable political coalition in support of a desired outcome, the
commercial diplomat has to identify the stakeholders.
A stakeholder is any person or organized group that is affected
by a policy decision or has vested interest in the policy, and is able
to influence the outcome through political action.
In order to shape the outcome of the decision making process, the
commercial diplomats not only needs to identify all stakeholders who can
influence the outcome, but their interests, their views and objectives
regarding the policy issue and their means of exercising political
influence to affect the outcome.
The purpose of
the political analysis is build the information necessary for building a
coalition of stakeholders dedicated to the common purpose of achieving
the desired policy reform. In
order to make this coalition powerful enough to overcome opposition to
the desired reform the commercial diplomat must not only bring together
stakeholders who are aware of the issue and ready to use their
influence, but also stakeholders who are potential supporters.
It may only be necessary to bring the issue to their attention,
or to adjust the desired policy outcome to accommodate their interests.
The successful commercial diplomat also seeks to weaken
opposition to the desired policy outcome.
In order to weaken the opposition, the commercial diplomat may
need to accommodate some of their interests, or to persuade them that
they stand more to lose by opposition.
analysis thus serves to provide the information necessary for successful
political strategy. Information
about personal relationships between stakeholders and key
decision-makers, the ability of particular groups to mobilize voters or
to raise campaign contributions for legislative elections all provides
the basis for assessing the potential political influence of supporters
and opponents. Information
about interests and positions provides the basis for shaping the message
and the desired policy outcome to make it as attractive as possible to
potential supporters and to weaken the opposition.
The questions a
trade policy analyst might ask about the politics of a trade-related
policy issue is as follows:
are affected by the trade problem or any effort to solve the trade
What are their
interests? Positions on the problem or possible solutions? Options?
In what way is
each stakeholder likely to use political influence to affect the outcome
on the issue?
Domestic laws and
regulations as well as international trade agreements govern most policy
actions that affect trade. Legal
analysis of trade-related issues can determine whether the trade related
problem arises from an administrative decision or from the text of the
underlying regulation, law or constitutional provision.
Legal analysis can help us determine whether we can solve the
problem by persuading an official to change the way a regulation is
applied, or whether we need to seek a change in the regulation or the
underlying law. To
accomplish this, we have to identify and analyze the relevant legal
provisions, examine the legislative and regulatory history and review
past judicial interpretations. To
put it another way, the objective of domestic legal analysis of trade
related policy issues is to identify permissible interpretations of
applicable laws and regulations, and the extent to which such
alternative interpretations would enable us to reduce or eliminate the
In applying their
policy measures, national and lower governments are bound by the
provisions of international trade agreement.
The second purpose of legal analysis in commercial diplomacy is
to determine whether the targeted policy measures are consistent with
all relevant provisions of international trade agreements, or whether
they could be challenged. International
rules, like domestic laws and regulations, are subject to
interpretation, and we may therefore have to identify both the most and
the least favorable interpretations. We may also need to investigate how
the international rules may constrain possible actions we might take to
solve the problem directly.
The questions the
trade analyst might ask to shed light on the legal issues involved in
addressing a trade related issues are as follows:
- How does the trade problem relate to applicable domestic laws?
- Is the trade problem created by a failure to implement domestic laws?
- Is the problem created by an interpretation/implementation of a domestic law?
- Is the problem created by an arbitrary decision by an official, or by a decision that could be altered in a manner consistent with domestic law?
- How does the trade problem relate to applicable provisions of international trade agreements?
- Is the problem created by a domestic law, regulation, or policy action that is inconsistent with international trade rules?
- Is the problem created by a lack of clarity in an international trade provision, or by a failure of an international trade agreement to deal with a government practice that distorts trade?
- What domestic laws and international trade agreements can be invoked to solve the trade problem?
- How do domestic laws and international trade rules constrain possible actions to solve the trade problem?
- What domestic laws and international rules do we take as given and which do we seek to change as part of our effort to solve the trade-related problem?
diplomacy touches not only the commercial interests of individual firms
and industries, but also the economic interests of the country as a
whole. Countries trade with
each other and invest in each other’s economies to improve the
economic performance of the economy, and thereby increase the standard
of living of a country’s citizens.
Trade allows a country’s citizens to concentrate on tasks they
are best qualified to perform and to produce the goods and services in
which the country enjoys a comparative advantage.
By increasing competition, trade also stimulates a country’s
producers to seek out more efficient production methods and to improve
the quality of he goods and services they produce.
This in turn increases the productivity and growth of the
economy, which in turn translates into higher wages for many workers,
lower prices, and a higher standard of living.
change, however, will affect the distribution of income within the
country, leaving some better off and some worse off.
This is because trade increases the demand for some goods and
services, and by extension the wages of workers employed in those
industries, and reduces the demand for other goods and services, and by
extension the wages earned by workers in those industries.
makers therefore want to know how a particular trade policy related
action would affect the performance of the economy, and the distribution
of income between different groups in society. The commercial diplomat
therefore has to estimate the impact of trade policy decisions on trade
flows, national economic output, productivity and growth, jobs and
wages, consumer prices, industry profits, and income distribution.
A basic knowledge of economics and key concepts like price
elasticity, and a familiarity with rule of thumb estimating techniques,
should allow a trade analyst to approximate some of these values, though
state of the art estimates will require the assistance of a
professionally trained economist.
questions the trade policy analyst might ask about the impact of a
trade-related policy decision on the national economy are as follows?
does the problem affect the economy as a whole, including prices
of the traded and non-traded good or service?
will it affect trade flows? Production? Productivity? Wage Incomes?
and each department, ministry and agency within individual governments
has a set of procedures for making decisions on policy actions.
These procedures can get particularly complicated when several
departments get involved in a decision, and when legislators seek to
influence the outcome either indirectly through behind the scenes
advocacy or directly through legislative action.
Sometimes decisions get delayed and frustrated not because of
substantive disagreements among the various government officials or
legislators, but as a result of arguments over bureaucratic turf, or the
personal idiosyncrasies of an individual decision maker.
One of the issues a commercial diplomat must therefore consider
is the institutional process that will be required to get a decision on
the desired policy outcome.
First of all,
institutional analysis can identify all the officials who are likely to
become involved in the decision-making process, and who therefore have
to be treated as stakeholders. Second,
it will reveal bottlenecks in the decision-making process that may have
to be addressed through political action. Often there are alternative
institutional paths to a decision, and through astute lobbying the
commercial diplomat may be able to influence how and by whom the
decision will be made.
The questions the
trade analyst might ask to shed light on institutional considerations
are as follows?
domestic and international institutions and processes are available for
addressing the trade problem?
institutional issues arise in trying to solve the problem?
there any institutional bottlenecks that need to be addressed?
Analyzing Public Opinion and the
Media Treatment of the Issue
involving commercial diplomacy are of concern only to groups in society
most directly involved in the issue, and get discussed behind the scene
without much public awareness and get little treatment in the popular
press. At most, such issues may get discussed in periodicals that are
focused on the particular industry or policy interest group that is most
concerned about the issue. Other
decisions, however, are of broad concern to the public and get discussed
at length in newspapers, TV broadcasts and radio shows. Public
opinion, and by extension the media, can have a major impact on the
policy outcome. In these
cases, the commercial diplomat needs to understand the concerns that
drive public opinion and to address these concerns by shaping both the
proposed policy action and the advocacy message.
The commercial diplomat must also analyze the views disseminated
by the media either indirectly through the treatment of the issue in
pres reports and news broadcasts, or directly through editorials, in
order to shape the further evolution of the story in the press through
press releases, interviews, speeches and other channels.
The questions the
trade analyst might ask about public opinion and the treatment of the
issue by the media are as follows:
public opinion play a role in the problem or any attempts to solve the
either the popular media or the specialized media covered the problem?
the press likely to cover efforts to address the problem?
public information initiatives are available to shape public opinion?
Developing the Research Strategy
multi-disciplinary analysis that underlies commercial diplomacy requires
the collection of a great deal of information, and the application of a
variety of analytical tools. As
was mentioned earlier, the commercial diplomat needs to have a command
of the basic analytical tools in a variety of disciplines in order to
get a comprehensive grasp the issues that need to be addressed in
developing a successful strategy for obtaining a desired outcome on a
trade related policy issue. Few
commercial diplomats can develop a professional level of knowledge in al
the required disciplines, and part of the analytical process is the
identification of professional experts and professional studies that can
fill in any gaps in professional skills and areas of knowledge.
The amount of
information a trade policy analyst may need to collect to prepare a
policy issue for decision by superiors is quite large. In order to
accomplish this task efficiently, the analyst will need to map out a
well-organized research strategy. The first step is to list all the
questions that need to be answered, and the most likely sources of
information from the Internet, to libraries, professional or industry
associations, think tanks, NGO’s or individual knowledgeable experts.
The analyst will also need to identify the analytical tools that will
need to be applied to data, and the extent to which the analyst’s own
professional skills and knowledge in individual disciplines and areas of
knowledge will need to be augmented by professional colleagues with
greater professional training in the area.
The questions the
trade analyst might ask in putting together the research strategy are as
information will I need to analyze all the issues I have mapped out both
at home and abroad?
sources of information are available?
professional skills/expertise will I need to analyze all the issues?
professional experts can I consult to fill gaps in my own knowledge and
Analyzing the Factual Data
voluminous data and information on all the issues we identified during
the research phase, the trade analyst has the challenge of organizing
and analyzing the data. Analysis
is a process of extracting the implications of the factual data for the
trade problem pr opportunity we were asked to address.
We need to interpret how various laws and regulations apply to
the policy issues we have identified.
We need to analyze how alternative policy actions will affect the
commercial interest of the key stakeholders. We need to evaluate how
various policy options will affect the various policy objectives that
will concern various stakeholder groups and decision makers. We need to
estimate the overall, macroeconomic impact of alternative policy
measures on the national economy. We
need to assess how variations in policy options will affect the support
or opposition of various stakeholder groups, and the relative political
influence of these groups.
section is the section where the analyst adds value to the data
collected through research. Obviously,
experience generally enhances the value that an individual analyst can
provide in this section. Inexperienced
analysts frequently confuse prodigious research and the compilation of a
large volume of facts as analysis. However,
research per se and the compilation of facts, even if it is voluminous,
does not constitute analysis. In
order to draw meaning from data we must interpret the data, examine its
relevance for the case hand, examine the impact of alternative policy
outcomes on policy objectives and on the interests of different
stakeholder groups, and weigh the relative importance of different
factors. Analysis helps us
to understand the relevance of the data collected for the decision that
has to be made on the desired policy outcome and on the different
aspects of the strategy for getting there.
Developing Policy Options
Recommended Policy Outcome
As the commercial
diplomat learns more and more about an issue, the nature of the problem
to be solved or the nature of the challenge to be pursue evolves.
What may have started out as a fairly simple issue may become
increasingly complex, and the fairly straightforward policy solution
nature that seemed to provide the answer to the organization’s problem
turns out not to provide a viable solution to the problem.
The reasons may be manifold – the scientific facts may turn out
to be more ambiguous or complicated, research may reveal the existence
of an obscure law and regulation; the policy debate could inject a new
stakeholder with strong political connections into the picture.
For all these reasons it is wise to periodically review the
statement of the issue, and the implied solution to the organization’s
and analyzed all aspects of the policy issue, and having updated the
statement of the issue, the trade policy analyst is in a position to
identify alternative policy options for addressing the issue, to weigh
the advantages and disadvantages of each option, and to recommend a
preferred policy solution. Some
superiors will ask you to present a recommended solution for approval
and to explain why they should support it; others will ask you to
present a set of options with the pros and cons of each option.
Similarly, some superiors will ask you to present a strategy for
implementing your recommendation before approving it.
As a general matter, you should think through how you intend to
implement a recommended option before committing yourself to a specific
policy option and accompanying strategy for implementing it has to take
account of all the various aspects of the issue that may have surfaced
during the course of your research and analysis– the commercial
interests of the key commercial stakeholders, the policy issues that
have been raised by politically influential stakeholders, the domestic
and international legal requirements, the national economic interest,
institutional bottlenecks and the bureaucratic interests of various
committees and departments, and public opinion.
Not every trade-related policy issue raises a critical legal or
economic issue, or is a matter of concern to the general public and the
media, but a serious problem in any one of the functional areas could
kill a desired policy outcome, even if all other issues have been
satisfactorily addressed. A policy proposal that meets all the requisite
commercial, political, policy and macroeconomic criteria may
nevertheless fail if it violates an obscure legal provision.
Similarly, a trade-related policy measure that supports important
policy objectives, has many economic benefits, satisfies all legal
requirements and is supported by powerful political groups, may
nevertheless fail if public opinion is strongly opposed to the measure.
While a critical
problem in any of the functional areas – whether in the commercial,
political, policy, economic, legal or public relations area - can kill a
proposal, a strong case in one area can offset a weak case in another
area. A policy proposal that has a strong policy rationale, a strong
economic case and strong political support could be adopted even if the
law is not clear on the issue.
diplomat must weigh all the factors in proposing a recommended policy
solution to a trade related policy issue. Being able to assess the
relative importance of different factors is a matter of experience. The
foundation for an informed decision, however, is solid research and
analysis. Gaps in the
research and analysis can lead to flawed policy recommendations.
a Domestic and International Strategy
You should be
prepared to support any policy recommendation you make with a
well-developed strategy for obtaining a favorable decision by the
domestic and/or foreign officials that will have to agree.
Such a strategy should identify potential coalition partners and
the message that will win their support, the answers to questions that
may be raised by opponents or the media, the legal case and the economic
arguments, and a plan for getting the message out to key stake holders
and the public.
If the desired
policy action involves an action by a foreign government, and you seek
to involve the home government in a negotiation with the foreign
government, you will first need a strategy for persuading the home
government to add the issue to its negotiating agenda with the country
(or countries) involved, and secondly a successful negotiating strategy
with the foreign government. In
other words, when the issue calls for government-to-government
negotiations, you need both a domestic political strategy and an
international negotiating strategy.
strategy builds synergies and positive feedback loops among supporters
and among the different issue areas, while blunting the arguments and
the message of opponents.
Putting Together the Decision
diplomat usually acts on behalf of an organization – a government
department, ministry or regulatory agency, an industry association or
enterprise, a non-governmental organization.
Therefore, before adopting a course of action on a particular
policy issue, the commercial diplomat must seek the approval of
superiors and other stakeholders with a role in the decision-making
process. The approval
process usually involves the submission of a decision memorandum to
everyone who will be participating in the decision.
manager empowered to make a decision for an organization is usually an
extremely busy individual, who does not have the time to read through a
thick document and sort through voluminous data and information. A
decision memorandum therefore has to be relatively short and to the
point and well organized. A
somewhat longer paper may be attached to the decision memorandum to give
the decision maker’s staff additional details. The writer of a
decision memorandum has to be highly selective in the choice of
background information and analysis that is included in the memorandum.
Such a memorandum should typically not exceed a few pages, and
may need to be as short as one page.
While the attachment can be longer, it should include only
information that is necessary for making a well-informed decision on the
issue. . The attachment itself should be in a format that makes it easy
to read, with tables and back-up documents relegated to separate
appendixes at the back of the paper.
Typically, an analyst will collect several times as much data as
should be included in the complete document, and the decision making
memorandum itself should include only a small fraction of that data,
with the most critical information.
A good decision
memorandum above all needs a concisely written introductory paragraph
that describes the problem or opportunity from the point of view of the
organization, why the issue is important to the organization, the key
hurdles that need to be addressed in obtaining a desirable outcome, and
the recommended course of action. The introductory issue section should
be followed by
Background Section that provides the most relevant background
Analytical Section that provides the writer’s own interpretation
of the background data and analysis of the issues that is likely to
have a significant bearing on the decision.
Option and Recommendation Section that describes available options
(if desired by the decision-maker) and a recommended policy outcome,
including the rationale for the recommended choice.
Strategy Section, which recommends a course of action for
implementing the desired outcome
Each of these
sections should be subdivided into key topics, with subheadings that
provide an outline of the topics addressed, thus allowing the reader a
quick overview of the main lines of the argument and allowing the reader
to decide which paragraphs to read when time is limited.
background section and the analytical section should cover the
commercial and policy issues, the politics, the national economic
effects, the relevant legal provisions and the public relations aspects
of the issue. All factual
material, including numerical data, information about stakeholders and
their interests and views, applicable laws and international rules,
actions by policy makers, news articles and opinion polls belong into
this section. The analytical
section should cover the writer’s own interpretation and analysis of
the data and information presented in the background section. Where we
are dealing with a policy issue that involves a foreign government, the
information and analysis presented in these sections will need to cover
both the situation in the home country and abroad.
section of the decision memorandum should establish a solid foundation
for the next section. Thus
the background section should provide all the background information
needed to support the analysis provided in the analytical section.
The analytical section needs to provide support for the
recommended policy outcome and every element of the proposed strategy
for obtaining a favorable decision.
Background information that does not support an element of the
analysis presented in the analytical section can probably be left out of
the memorandum without reducing its effectiveness.
In fact, leaving unessential information out of the memorandum is
likely to enhance its effectiveness.
Similarly, analytical observations that do not directly relate to
the policy options, the recommended policy outcome or the recommended
strategy should also be left out. On
the other hand, elements of a recommendation unsupported by analysis, or
analysis unsupported by key facts, may call for additions to the paper.
Recommendations not backed by analysis are unlikely to impress
decision makers unless you are the world’s greatest authority on a
The questions the
trade analyst might ask before writing the decision memo are as follows:
factual background does the decision maker need to make an informed
analysis can I add to support the recommended course of action?
are the elements of my recommended course of action? How will that solve
the trade problem and satisfy other policy requirements?
is my strategy for developing the necessary consensus among domestic and
foreign stakeholders? For making the legal case? For managing
institutional issues? For building broader public support?