Economic diplomacy: a user’s guide

Economic diplomacy uses instruments of very different natures. A memorandum of understanding expresses a shared intention and legally binds no one. A framework agreement sets principles and defers the details to later texts. A treaty creates enforceable obligations once ratified.

That gradation explains most of the confusion. A memorandum signed during an official visit is announced in terms suggesting secured investment, when it in fact opens a negotiation. Between signature and first works, several stages can halt the process.

The useful test for a reader is simple: look for what is binding and what is not. A text providing a timetable, a dispute settlement mechanism and parliamentary ratification commits. A text providing none of these expresses an intention.

That leaves the decisive and least covered stage: ratification. It is in parliament that a text becomes domestic law. Following an agreement through to that vote, rather than to the signing photograph, changes what one understands of it entirely.