The meltdown in Asian financial markets and the fierce debate over the U.S. role in a bail-out tend to obscur the huge scale of American exports to the region, currently $200 billion a year. Washington's commercial diplomacy efforts to promote U.S. exports to Asia are equally controversial, having been tarred by the Huang-gate hearings on illegal campaign donations, amid accusations of political favoratism and corporate welfare with Asian dictators. This Study Group report argues that commercial diplomacy - despite its flaws - can be an essential complement to structural reforms in Asia, a tool that can pry open Asian markets to U.S. exports of goods and services. Asia's temporary economic crisis presents a window of opportunity during which U.S. commercial diplomacy can promote competitive markets, deregulation, privatization, and official transparency. Based on a careful year-long review by a Council panel of business, academic, and government experts, this Report recommends that commercial diplomacy should be intelligently managed and carefully focused on the highest growth U.S. markets in Asia, with more trade advocacy and less financial subsidy, and, above all, tightly integrated with U.S. political, financial, and economic reform strategies in Asia. It would be a mistake to kill commercial diplomacy, or leave it to wither in a shrunken form, because of political misdeeds or errors in the past. There is too much at stake
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