Should U.S. Diplomacy Seek to Bolster American Businesses? (H.R. 1704)

What is H.R. 1704?

(Updated September 2, 2019)

This bill — the Championing American Business Through Diplomacy Act of 2019 — would seek to bolster the competitiveness of American businesses abroad by prioritizing U.S. economic and commercial diplomacy through the State Dept., Dept. of Commerce, and U.S. diplomatic missions around the world.

Specifically, this bill would:

• Authorize an Assistant Secretary of State for Economic and Business Affairs and make them responsible for promoting and supporting U.S. economic and commercial diplomacy;
  
• Require U.S. diplomats to promote U.S. economic and business interests abroad and report on their economic and commercial priorities and activities;
  
• Mandate economic and commercial diplomacy training for Foreign Service Officers (FSOs);
  
• Increase U.S. businesses’ awareness of U.S. government tools and services to promote American exports and investments overseas; and
  
• Encourage the president to negotiate with countries on international standards for government-support quality infrastructure investments.

Argument in favor

American businesses’ global operations play a critical role in the health of the U.S. economy as a whole. U.S. diplomatic efforts should take businesses’ needs into consideration so they can compete against state-owned or state-backed enterprises based in countries like China.

Argument opposed

While it’s important for the federal government to try to level the playing field for American businesses competing abroad, federal agencies engaged in diplomacy shouldn’t prioritize economic considerations above other considerations.

Impact

U.S. businesses; international businesses competing with U.S. businesses; international business competition; U.S. diplomats; FSOs; State Dept.; Dept. of Commerce; U.S. diplomatic missions; and the president.

Cost of H.R. 1704

The CBO estimates that implementing this bill would cost less than $500,000 annually, totaling $2 million over the 2019-2024 period.

Additional Info

In-Depth: Rep. Michael McCaul (R-TX) reintroduced this bill to bolster U.S. business competitiveness abroad and counter Chinese commercial competition by prioritizing economic and commercial diplomacy through enhanced partnership integration between the State Dept., Dept. of Commerce, and U.S. diplomatic around the world. These partnerships would seek to promote U.S. business values of high quality standards, transparency, and agility in adapting to foreign markets’ unique demands:

“American companies are the most innovative in the world and bring with them high standards and best practices wherever they go. Developing countries want American business, but in most markets China and others are winning with state-backed inducements and economic coercion. The enactment of the BUILD Act last year was an important first step to offer countries an attractive alternative to Beijing’s predatory lending practices. Among other improvements, U.S. businesses now have important financial tools to help them invest overseas, but more can be done. The bipartisan Championing American Business Through Diplomacy Act will bolster U.S. economic and commercial diplomacy, help facilitate greater market access for our companies in emerging markets, and rededicate the Foreign Service to one of its founding missions: to support U.S. business.”

In an interview with the Council on Foreign Relations (CFR), Rep. McCaul adds that this bill would get U.S. diplomats “to put more pressure and to advance American interest in Africa and other countries and continents, so that we can be competitive with China in this respect.” He contends that this is needed because right now, China is “winning” in global business competitiveness.

Rep. McCaul acknowledges that the BUILD Act of 2018 (H.R. 5105/S. 2463), which became law in October 2018 as part of the FAA Reauthorization Act of 2018 (H.R. 302), was “an important first step to offer countries an attractive alternative” to China’s corrupt practices,” but contends that more is needed to help U.S. companies compete globally.

This bill has five bipartisan cosponsors, including three Democrats and two Republicans, in the 116th Congress. Last Congress, this bill had one cosponsor, Rep. David Schweikert (R-AZ), and didn’t see committee action.

Media:

• Sponsoring Rep. Michael McCaul (R-TX) Press Release
  
• Sponsoring Rep. Michael McCaul (R-TX) Interview
  
• CBO Cost Estimate
  
• The Ripon Advance
  
• The Washington Post (Context)
  
• Countable (Related Bill, 115th Congress)
  
• Countable (Related Bill, 115th Congress)