Paulo Whitaker / Courtesy Reuters A view of São Paulo, the largest city in Latin America, April 5, 2011.

Foreign Policy Goes Local

How Globalization Made São Paulo into a Diplomatic Power

Last week, the United Kingdom made a new friend. Hugo Swire, the British Minister of State at the Foreign and Commonwealth Office, came to Brazil to sign an agreement establishing “formal bilateral relations” with São Paulo, Latin America’s wealthiest state. In late March, the United States signed an identical agreement -- the first time that the U.S. State Department forged “direct relations” with a subnational government in the southern hemisphere. Canada, France, Germany, and a handful of other countries in Europe and Asia will soon sign their own agreements with São Paulo. Why are national governments making formal relations with cities and states, and what does it mean for the future of diplomacy?

It’s about time that diplomacy adapted to modern times. Information is no longer privy only to embassies. Today, many private intelligence firms, think tanks, and NGOs have better access to quality sources than experienced diplomats do. And the idea that diplomats should exclusively represent their governments in other countries is now obsolete. Government leaders regularly dispatch their trusted aides on strategic missions instead of relying on career diplomats whom they may not know personally. These new emissaries often eschew choreographed, ceremonial diplomacy for immediate results; they favor foreign investment instead of foie gras. Taxpayers around the world raise their eyebrows at the costs of certain trappings of diplomacy, and they demand more restraint than is evidenced in many traditional diplomatic rituals -- such as those in Japan and Sweden in which ceremonial horse-drawn carriages still transport newly appointed foreign ambassadors to meet Emperor Akihito and King Carl XVI Gustaf, respectively.

Several countries have adapted to this new era by modernizing their diplomatic infrastructure to meet growing economic and social demands as a result of globalization and free market reforms. Some countries, including Germany, Singapore, and the United States, have reconfigured their missions abroad, turning them into business and investment centers. Singapore recently opened an embassy in Brazil’s capital, Brasília, but its diplomatic hub in the country is really in São Paulo, the office of International Enterprise Singapore, a government agency that promotes Singaporean companies and international trade abroad. Many other countries have more employees stationed at consulates in the city of São Paulo, which has the second-largest consular corps in the world (after New York), than at embassies in Brasília.

The key to realizing these new diplomatic goals is what is known as paradiplomacy, or subnational foreign relations. With the strengthening of local power, the world’s major cities, states, and provinces have adopted international policies previously reserved for national governments and mustered resources to ensure the protection of their interests abroad. Baden-Württemberg, California, Guangdong, Texas, and São Paulo have more economic ammunition than the vast majority of countries on the planet. California has the ninth-largest economy in the world, ahead of India and Russia; São Paulo ranks 19th, ahead of every country in South America except Brazil itself.

With globalization, these subnational governments can no longer fulfill their constitutional responsibilities in education, sanitation, economic development, transportation, the environment, and other areas without interacting with the world. These local authorities rely on the international flow of capital, knowledge, and people to successfully implement their governmental programs. The German state of Baden-Württemberg, for instance, has tapped its expertise in renewable energy sources to become an international technological hub for sustainable development -- and one of the most prosperous regions in Europe. Upper Austria has used its participation in multilateral forums such as the Regional Leaders Summit (an organization that brings together subnational members from seven countries) to boost foreign trade and market its capital, Linz, as one of Europe’s new cultural centers.

The United Nations and its numerous agencies, along with the World Health Organization, the World Bank, and other international bodies, have all established guidelines that stress the importance of subnational governments. At the 2012 United Nations Conference on Sustainable Development, also known as Rio+20, participants adopted an agreement recognizing “efforts and progress made at the local and sub-national levels” and “the important role that such authorities and communities can play in implementing sustainable development.” The insularity of the Greek city-states is a thing of the past, along with the absolute centralization of power in national capitals.

One cause for the shift is that it would be too expensive and unproductive to strengthen federal ministries of foreign affairs just to cater to the specific interests of local governments. It makes little sense for U.S. Secretary of State John Kerry to spend his time discussing sanitation or international bids for subway lines. Instead, paradiplomacy empowers local and state governments to deal with the international dimensions of these issues on their own. In the past, paradiplomacy was mostly a prerogative of regional governments that flirted with sovereignty, such as Catalonia and Québec. Today, it has become more universal.

Just as Flanders and Wallonia did before them, some South African states, including Gauteng and Western Cape, and South Korean provinces, such as Chungcheongnam-do, conduct business abroad and seek formal relations with foreign countries. Chinese provinces -- from the rich Guangdong and Shandong to the poorer Inner Mongolia -- have established large international departments staffed with well-trained, polyglot bureaucrats. In the state of São Paulo alone, 25 regional states and provinces from North American and European countries have opened local delegations. Canadian, U.S., and German subnational regions have, in total, more than a hundred offices abroad.

In most countries, law or reason dictates the division of duties. Generally, the federal government conducts foreign policy, while subnational governments focus only on their areas of constitutional responsibility. One complements the other. Germany’s constitution even spells out that “before the conclusion of a [foreign] treaty affecting the special circumstances of a Land [state] that Land shall be consulted in a timely fashion.” Increased global competition and economic liberalization has accelerated that process and opened up new spaces for new actors.

Brazil’s 2010 federal and state elections brought new leadership into power that understood the promise of a new kind of diplomacy. Last year, Brazil’s then–Foreign Minister, Antonio Patriota, announced that the ministry already recognized “the new reality of federative diplomacy and has been working extensively in coordination with states and municipalities to explore synergies.” Wealthy São Paulo, with its 42 million inhabitants, has made the most of this opportunity. Its governor, Geraldo Alckmin, has signed more international agreements (50 per year), received more foreign delegations (on average 450 per year), and managed more international cooperation programs (150) than any other regional governor in Latin America. Among all Latin American leaders, only Brazilian President Dilma Rousseff receives more heads of state and government than Alckmin.

With support from Brazil’s Ministry of Foreign Affairs, the São Paulo state government passed a decree in 2012 adopting its own plan for conducting international relations. The plan’s 54 goals included foreign investment and loan targets and ways to boost foreign-language education. As noted by Rubens Barbosa, a former Brazilian ambassador to the United States, in an op-ed in the newspaper Estado de São Paulo, the state has become one of the few federated states in the world to establish clear guidelines on how to act externally.

In the last three years, foreign partners have signed on to projects and programs with all 26 of São Paulo’s governmental departments, including vital infrastructure such as new tunnels, highways, and subway lines built by foreign companies or in cooperation with foreign consultants. Canada, Japan, the United Kingdom, and dozens of others have signed agreements for the state’s public security, environmental initiatives, and education. Thousands of students from public schools have relied on these agreements to study English, French, or Spanish abroad. The United Nations supports São Paulo’s efforts to reduce poverty and clamp down on corruption. As a result, foreign expertise and capital have started to flow in from Asia, Europe, and North America -- and flow out, too. Angola replicated São Paulo’s public-housing program; Macedonia adopted its information-technology program; and Mexico its biofuels policy. In May, the United Nations opened its first office in São Paulo to “disseminate successful policies through the Global South,” in the words of Jorge Chediek, the UN’s Resident Coordinator in Brazil.

Brazil’s Ministry of Foreign Affairs has supported São Paulo in these efforts, knowing that what is good for São Paulo is good for Brazil. Some of Brazil’s other regional governments, such as those of Rio de Janeiro and Minas Gerais, have strong, internationally competitive economies that will allow them to follow São Paulo’s lead abroad. Brazil has long relied on traditional strategies to claim its status as a global power, such as opening dozens of new embassies and seeking a permanent seat on the UN Security Council. Through subnational diplomacy, Brazil has found a more creative and perhaps more effective way to attain that goal -- and other countries should follow suit. 

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