This article examines the challenges that globalisation poses to States and societies as well as the attempted response strategies, in particular the restructuring of external action based on an economic diplomacy approach, which was consolidated in the post-Cold War period with the new relevance given to the geo-economics. A reflection on the reform of Portugal’s external action is also developed. The evolution of the conceptual framework demonstrates that economic diplomacy implies a significant innovation and a paradigm shift in external action, based on a holistic approach that articulates the “3Ms” of multidisciplinarity (crossing economic, political and security dimensions), multilevel and multi-actor. The text addresses the case of Portugal, analysing the dynamics of external economic relations in the 2002-2015 period, structural vulnerabilities and the various failed attempts to structure a new approach during the last decade, which was essentially centred on the State and marked by the traditional vision of commercial diplomacy. In this context, and taking into account the experiences and good practices of other States, strategic guidelines are discussed for the structuring of an effective economic diplomacy in Portugal that articulates three fundamental organizational, operational and innovation dimensions.