Almost a year since the Coalition took the reins of government and introduced its policy of 'economic diplomacy', a term which was probably foreign to many Australians at the time, Foreign Minister Julie Bishop and Trade and Investment Minister Andrew Robb launched the Government's Economic Diplomacy policy today at the Lowy Institute. Since the election, it's a term the Foreign Minister has used frequently, along with the 'open for business' mantra and its emphasis on promoting the economic interests of Australia and Australian businesses internationally.

The ministers must have received a considerable amount of feedback about the policy, including questions about what 'economic diplomacy' actually means, because both today went to considerable lengths to explain it. The complexity of the task is illustrated by the length of the ministers' speeches: almost an hour, taken together, and followed by a short Q&A session.

In the Foreign Minister's parlance, 'economic diplomacy' means:

harnessing broader aspects of our international diplomatic work to promote trade, encourage economic growth, attract investment and support business.

To do this, Australia's global network of 95 ambassadors, high commissioners and consuls general, together with 72 trade commissioners, will make economic diplomacy their guiding principle: 'promoting our national reputation as an open export-oriented free market economy (and as a country which is) a great place to invest and with which to do business.' Several times in her speech, Ms Bishop underscored the role of the private sector, particularly small and medium enterprises; she also included players in the broader Australian community: NGOs, think tanks, the arts and sporting people and organisations.

In the increasingly globalised international environment Australia now faces, this economic diplomacy agenda will be a complex one to prosecute: it implies a far greater role for non-government entities, particularly the private sector, and means a much greater involvement for the Australia's Department of Foreign Affairs and Trade in formulating and facilitating the Australian Government's approach to international trade and foreign investment.

Because economic diplomacy requires domestic policy settings which reduce barriers to trade, economic growth and investment, DFAT, along with its two ministers, will need to lead a whole-of-government, whole-of-society effort to achieve positive economic outcomes through diplomacy. As Ms Bishop described, the strength and uniqueness of this policy is that it aligns all Australia's international efforts – foreign policy, trade, tourism, investment and development – so that they are 'pulling in the same direction.'

As pointed out by one of the participants in the workshop which followed the Ministers' speeches, this means Australian diplomacy is no longer an 'elite sport' played only by diplomats and government officials. Because it will involve Australians and all kinds of Australian business, economic diplomacy will bring the business of Australia's international engagement much closer to home.

But it also makes Australia's diplomacy much more complex, at a time when DFAT, our principal agency for international engagement, has been resource-strapped for decades. And there are risks in making Australian business and industry the spearheads of our international engagement; the AWB scandal and Indian students' crisis are two examples of aggressive economic 'diplomacy' gone awry. These risks will require careful management by skilled diplomats abroad, and appropriate domestic policy-making and regulation by government at home.   

Australia is no outpost in prioritising economic diplomacy: Canada, the UK, and the Netherlands are examples of significant and like-minded nations pursuing similar goals to those outlined today by Bishop and Robb.  The key to success will be making sure that the policy doesn't become, in Bishop's words, 'the pursuit of Australia's naked self-interest to the potential detriment of others', but balances Australia's economic ambitions with broader and less self-centred aspirations for prosperity and peace in the region.