Economic diplomacy as a strategy of foreign policy

In the traditional sense, diplomacy is political diplomacy. This means that diplomats are primarily engaged in political relations because close or strong political relations lead to relations in other areas including economic and trade. Empirical evidence suggests economic relations are not initiated in a significant way in a political vacuum in which there is a lack of trust. In earlier times, trade diplomacy was accompanied by gunboat diplomacy. That meant that if any country failed to pay back the money for goods sold, warships would go to threaten that country. For example in 1902-03, naval units from Britain, Germany and Italy blockaded the coast of Venezuela to compel that country to make payment to them. In modern times, New York Times columnist, Thomas Friedman, the 2002 Pulitzer Prize winner, wrote that “the hidden hand of the market will never work without the hidden fistMcDonald's cannot flourish without McDonnell Douglas--the first designer of the F-15 war aircraft and the hidden fist that keeps the world safe for Silicon Valley's technologies is called the US Army, Air Force, Navy and Marine Corps.'