Cultural diplomacy is a term currently much in use as both powerful countries such as the United States and 'B' countries such as Canada and Germany mobilise the export of cultural products for the purpose of bolstering image and 'soft power', and influencing trade. This article studies the current situation, and examines the role assigned to translated literature in such an export agenda. Using findings form a research project on Canadian literature in German translation, and referring to postcolonial and neo-colonial theory, it proposes that the process and its outcome depends as much if not more on the participation and choices of the receiving culture.