Friday, June 22, 2018

New Draft Posted for Comment: "Cuba's Integration into the Global Economy—How Much is Cuba Expected to Change; How Far is Cuba Willing to Go; and Will the EU Serve as the Mediator of Those Changes?"


(Havana Harbor Pix © Larry Catá Backer 2018)

I post for comment the draft of an essay I have recently completed, entitled "Cuba's Integration into the Global Economy—How Much is Cuba Expected to Change; How Far is Cuba Willing to Go; and Will the EU Serve as the Mediator of Those Changes?"

The essay considers some of the issues that arise around the expectations of reform (legal, political and economic) within the Cuba that are deemed necessary for Cuba's reintegration into international economic legal/governance/economic orders. Discussion about the plausibility of such reform intensified among some influential circles in the wake of the movement toward normalization of U.S.-Cuba relations. The essay suggest  the question is deceptively simple, if conventionally direct, and actually combines three questions from quite distinct perspectives.  The consideration of these questions are the heart of the analysis. First, the essay considers the nature and scope of the changes to Cuba's legal, political and economic system required for such integration.  This constitutes the aspirational goals of many outside of Cuba. Second, it examines the extent to which Cuba would consider these changes in light of its own political principles. Such changes would require Cuba to substantially abandon the core principles of its political and economic organization. This is the issue of plausibility from the inside. Third, it considers the extent to which emerging Cuban-EU bilateral relations offers a middle way. This, then, constitutes the issue of plausibility from the outside

The draft of the essay may be accessed HERE; comments welcome.  The abstract and introduction follow below.  





Cuba's Integration into the Global Economy—How Much is Cuba Expected to Change; How Far is Cuba Willing to Go; and Will the EU Serve as the Mediator of Those Changes?

34 Pages Posted:  

Larry Catá Backer

Pennsylvania State University, Penn State Law
Date Written: June 18, 2018

Abstract

The essay considers the question: what internal Cuban legal adjustments will be necessary for Cuba to enter into a fully normalized relationship with the U.S. and the rest of the world? That raises three distinct questions made necessary by the profound changes that have occurred between the time U.S. Cuban normalization reached its high point in early 2016, and the changes in the world situation starting with the U.S. 2016 elections and its aftermath. The first question, examined in Part II, centers on consideration of the adjustments Cuba might have to undertake if it is to embed itself within the structures of global trade and finance. To that end, the chapter analyzes the legal changes Cuba would need to undertake to join international financial institutions and global and regional trade organizations. The second question, considered in Part III, examines the extent to which Cuba is disposed to consider these possible reforms. Against the objective of socializing Cuban legal and economic practices with global norms, the chapter will critically assess the extent to which the current Cuban socio-political framework can produce these modifications and the consequences for such limitations, including with respect to the limits of political reform and the relevance of human rights norms in the construction of economic legal and governance structures. The third question, considered in Part IV, then examines what may be possible in the aftermath of the U.S. Presidential election of 2016 (and its aftermath) and other global changes, including the emergence of a Chinese alternative to national embedding in global trade. These have considerably changed the terrain within with the consequences of U.S. - Cuba normalization can be considered. The examination considers the value of the European Union’s strategic initiative, the Political Dialogue and Cooperation Agreement (PDCA) as a viable basis for Cuban reintegration in the global economy.
Keywords: European Union, Cuba, Central Planning, normalization, international law, socialist markets, human rights, legalñ reform, internaitonal financial institutions, regional ytrade associations
JEL Classification: F02, K33, K39, P21, P33, P37, P48.

  
I. The Anticipated Shape of Cuban Reform and Reintegration: Expectation and Disappointment

“I have come here to bury the last remnant of the Cold War in the Americas.” These were the words that appeared to reverberate most strongly from the Gran Teatro de la Habana Alicia Alonso in the historic “Habana Vieja” section of the city on March 22, 2016 as then President Obama, on the first state visit of a sitting U.S. President since the Presidency of Calvin Coolidge in 1927, addressed the Cuban people (Obama, 2016a). This state visit appeared to cement the reality of efforts to normalize relations between the United States and Cuba begun with a declaration to that effect by both states on 17 December 2014 Obama, 2014).   It was a moment when many in the global community thought that one could imagine the reintegration of Cuba into the global economy.  That expectation was grounded on the anticipation that the United States would move forward to dismantle the legislative and administrative rules that together constituted the U.S. embargo on Cuba (Backer, 2004, n. 174). It was also grounded in the prospect of substantial concessions by the Cubans respecting an opening up of the economy. This was summarized nicely in President Obama’s press conference in Havana 21 March 2016: “And just as I continue to call on Congress to lift the trade embargo, I discussed with President Castro the steps we urge Cuba to take to show that it is ready to do more business, which includes allowing more joint ventures and allowing foreign companies to hire Cubans directly.” (Obama, 2016b).  The door then appeared open to Cuban integration within the global economy. There was an anticipation of the return to the Organization of American States (OAS), and Cuba joining the IMF and World Bank.  As well there was anticipation of a greater Cuban role in the World Trade Organization (WTO) form which Cuba never left but within which Cuba had been relatively unengaged (Jones, 2017).

But by 2018, these prospects had changed dramatically. The election of Donald Trump to the U.S. presidency altered the landscape of U.S. policy toward Cuba. These changes culminated in a well publicized initiative to roll back the steps toward normalization and reintegration that had been declared just months before by former President Obama (Trump, 2017). AT the same time, the European Union itself was roiled (Booth and McAuley, 2018) by the decision of the United Kingdom to seek withdrawal from the European Union in the aftermath of the so-called Brexit Referendum (Goodwin and Heath, 2016; Hobolt, 2016).  Simultaneously, China and its partners announced the One Belt One Road initiative along with the establishment of a multilateral development bank, the Asia Infrastructure and Investment Bank,  that was expected to operate on a model distinct from that of the International Monetary Fund (IMF) and the World Bank, and ultimately to displace the IMF (Chow, 2016).

The chapter will seek to answer the question: what internal Cuban legal adjustments will be necessary for Cuba to enter into a fully normalized relationship with the U.S. and the rest of the world?  That raises three distinct questions made necessary by the profound changes that have occurred between the time U.S. Cuban normalization reached its high point in early 2016, and the changes in the world situation starting with the U.S. 2016 elections and its aftermath. The first question, considered in Part II, centers on   consideration of the adjustments Cuba might have to undertake if it is to embed itself within the structures of global trade and finance.  To that end, the chapter analyzes the legal changes Cuba would need to undertake to join international financial institutions and global and regional trade organizations as then shaped by international conditions emerging after 2016. The second question, considered in Part III, examines the extent to which Cuba is disposed to consider these possible reforms. Against the objective of socializing Cuban legal and economic practices with global norms, the chapter will critically assess the extent to which the current Cuban socio-political framework can produce these modifications and the consequences for such limitations, including with respect to the limits of political reform and the relevance of human rights norms in the construction of economic legal and governance structures. The third question, considered in Part IV, then examines what may be possible in the aftermath of the U.S. Presidential election of 2016 (and its aftermath) and other global changes, including the emergence of a Chinese alternative to national embedding in global trade. These have considerably changed the terrain within with the consequences of U.S. - Cuba normalization can be considered. The examination considers the value of the European Union’s strategic initiative, the Political Dialogue and Cooperation Agreement (PDCA) as a viable basis for Cuban reintegration in the global economy. 
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