International trade and globalization have been vital factors in the economic growth and wealth creation of the United States. Now, due to current trends, trade and globalization are even more important to our future well-being. In addition to being a primary generator of business and job growth, they also provide consumers greater disposable income, further improving our standard of living. For example, a May 2005 report published by the OECD, says reforms that enhance market competition, reduce tariff barriers and ease restrictions on FDI are estimated to boost GDP per capita 1 to 3 percent in the United States, 2 to 3.5 percent in the European Union, and an average of 1.25 to 3 percent in OECD member countries.

But while the gains are widely dispersed, the much smaller losses are highly concentrated. And due to a massive dissemination of misinformation, many believe trade and globalization primarily are responsible for America’s economic difficulties. In turn, this has led to the belief that erecting trade barriers will solve a variety of problems. Nothing could be further from the truth.

To reverse these perceptions, American businesses must take the lead in educating the public, media and policymakers, and of course, their employees and investors on today’s global economic realities. And very importantly, they must communicate the impact of these realities on their companies and explain what they intend to do about them. But to truly achieve understanding, it is important to frame or position an issue in a context the target audience can easily grasp. For example, when discussing a particular effect of trade, explain it in terms we all value (i.e., our homes and family, career opportunities, wage potential and quality of life). Attempting to discuss issues solely in economic, theoretical or non-emotional terms is likely to result in a lack of understanding or limited engagement on the part of the target audience.

Just as important, it is essential to keep the message simple. To do so, narrowly focus on the goal. Unfortunately, when complex issues are discussed or responses to questions are provided to the media, policymakers, employees or investors, the communicator often attempts to convey too much information—creating confusion and new objections. In the end, the audience may not have the background, possess the necessary level of detail or connect all the dots. And even if the target audience is fully up to speed on every aspect, they may only retain 20 percent of what is expressed. The solution is not to repeat the points five times, but rather, to prioritize your answers with the most concise and compelling information available (see logic train in Part III). Furthermore, keeping the message simple and concise also will allow you to communicate it in little time. And since you are likely to only have a few seconds to convey a compelling argument on radio, television or at a town hall meeting, for example, few alternatives exist. And remember, credibility is key! Manage expectations and do not oversell what is realistically anticipated to occur based on a corporate decision or response to globalization.

Foreign Businesses and Governments Need To Explain Proactively the Advantages and Disadvantages of Trade Liberalization

The need to more effectively communicate today’s economic realities and a sound response also exists outside the United States. In fact, almost every country, especially those that intend to further liberalize trade in Central America, South America and Eastern Europe, must proactively craft messages that honestly explain the short-term downside in context with the much greater upside.

Overall, trade liberalization brings tremendous opportunities. But it also brings competition that is likely to hurt inefficient companies in the short term. A communications campaign that explains this, and perhaps is followed up with educational assistance and the implementation of safety nets, will be appreciated by a variety of domestic publics and will go a long way in terms of balancing public opinion.

If a proactive communications campaign is not implemented, stories about small businesses going bankrupt will be repeated in the media. On the other hand, good news about companies signing international contracts and hiring more employees will go unheard. And within a short period of time, the general perception of trade liberalization likely will become negative. In turn, frustration, fear and anger—all based on inaccurate perceptions—will be targeted at policymakers.

The following information will help businesses and governments, both in the United States and abroad, more effectively communicate their actions and policies in order to generate greater understanding and support.

This section appeared as the introduction to Part 1: Tips and Strategies for Communicating Responses of the book Grasping Globalization: Its Impact and Your Corporate Response, 2005, by John Manzella.

John Manzella
About The Author John Manzella [Full Bio]
John Manzella, founder of the Manzella Report, is a world-recognized speaker, author of several books, and an international columnist on global business, trade policy, labor, and the latest economic trends. His valuable insight, analysis and strategic direction have been vital to many of the world's largest corporations, associations and universities preparing for the business, economic and political challenges ahead.

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