Sunday, May 09, 2021

Draft Posted: "The EU to the Rescue of the Cuban Economy? the Political Dialogue and Cooperation Agreement (PDCA) and the State of Cuba-EU Economic Relations"




Rafael Velazquez Perez and I have posted the draft of an essay, which we first presented at the Associativity of the Study of the Cuban Economic January 2021 Conference. The paper,"The EU to the Rescue of the Cuban Economy? the Political Dialogue and Cooperation Agreement (PDCA) and the State of Cuba-EU Economic Relations" considers the PDCA as a critically important template of European strategic aspirations--not merely with respect to trade but more importantly with the ideology of trade aligned closely to a preferred political model. We conclude that the lubricant that the EU attempts through this model form of agreement is dialogue, an that dialogue is spiced with a substantial effort to witness the EU's faith in itself through capacity building projects structured and financed by the EU to meet and then overcome the disjunctions between the EU approach and those of target (in this case Marxist Leninist) states. We conclude that:
It is this disjunction that continues to frame European approaches to trade and investment relations with Marxist Leninist State. This is one of developing deeper interlinkages with the expectation that this will permit them to use various for a to instruct, or at least engage, their trading partners in European values. That model, the Cuba PDCA model, is evident in the 2020 agreement with China as well.Where once the weaknesses of the PDCA were viewed as a means of flexibility in using trade to build capacity and naturalize the European approach to the principles of a sustainability and human rights based trade regime (if ever so slowly), now those provisions are viewed as both weak and threatening to the position and interests of Europe. The PDCA was a dry run for what will be the agreement with China. And what PDCA teaches is that such agreement pay lip service to European values while seeking access to markets or territories where Europe has an interest. And yet, that lip service, in the view of some, is precisely what is most valuable to Europe, even at the expense, in the short term, of the values it seeks to promote through PDCA type deals. And yet there is ultimately a thoughtlessness here: what may be possible against a small and struggling state (and even that is not clear) may actually backfire when used against a state whose own power and cultural self-confidence as great as that of Europe. And, indeed, the price now may be too steep.

The conclusion is helpful in a sense, but it is the richness within the approach itself that is worth savoring for the insight it provides on the way in which the EU both sees the world and seeks to bend it to a specific way of engaging with it.  Not that there is anything wrong with this  And certainly other states with post-global imperial aspirations are engaging in similar project.  PDCA exposes, in a sense, the way in which the EU seeks to make meaning and to impose it.  It uses the mechanics of legalization, and its internationalization, as a framework through which it can, by a process of intergovernmental dialogue with NGOS strategically on the sidelines and as useful instruments enhanced with funding , seek to align trade and strategic objectives. In this they follow a similar pattern as that employed by the Norwegian Pension PLan Global, through the stratetegic use of state power in the service of internationalized legalities (Sovereign Investing and Markets-Based Transnational Rule of Law Building: TheNorwegian Sovereign Wealth Fund in GlobalMarkets).  And the approach was attempted--though incoherently--in European responses to Chinese engagements in redeveloping its One Country Two Systems  principle in Hong Kong (here

The draft may be accessed HERE.  The Introduction follows below.

 

 

The EU tothe Rescue of the Cuban Economy? the Political Dialogue and CooperationAgreement (PDCA) and the State of Cuba-EU Economic Relations

Larry Catá Backer (Pennsylvania State University)

Rafael Velázquez Pérez (Universidade de Vigo y de Holguín)

 

                 

1. Introduction.

 

Despite an American embargo with various degrees of bite since the 1960s, European states have continued to do business with Cuba, and often served as that marginal additional source of trade  especially when Cuba experienced substantial financial and political challenges.  In 2017, even as the United States retreated from direct economic connections with Cuba, the European Union sought to step into the space left by the American action. 

 

That strategic initiative, the  Political Dialogue and Cooperation Agreement (PDCA)[1] took final form accelerated in the wake of the prior U.S. Administration's policy of opening up.

 

Negotiations for the Political Dialogue and Cooperation Agreement (PDCA) were launched in April 2014 and concluded on 11 March 2016. After the approval by the Council of the European Union, it was officially signed on 12 December 2016. In parallel, the agreement was submitted to the EU Member States' national parliaments and the Cuban National Assembly for ratification. The European Parliament gave its consent on 5 July 2017. Most parts of the agreement start to be provisionally applied as of 1 November 2017.[2]

 

The Europeans view this as the marker of a new and more intensely profitable relationship with the Cuban state--though one not without its costs to Cuba. As Ms Mogherini put it:  “También me siento alentada por el inicio del diálogo sobre derechos humanos en 2015 y su segunda sesión en La Habana el pasado mes de junio. Este foro ya ha demostrado su utilidad para profundizar el diálogo y el entendimiento en esta área sensible, con miras a desarrollar la cooperación y la consecución de los objetivos de nuestro partenariado reforzado.”[3]

 

PDCA is the successor policy to the EU's Common Position which was repealed 12 December 2016.[4] The older policy was focused on the use of trade and relations as a means  of promoting “respect for human rights and real progress toward pluralist democracy.”[5] It sought to use trade as leverage for political and economic reform t the liking of the E.U.[6] And it centered the evaluation of the EU-Cuba relationship  on an evaluation of Cuban progress toward democracy.[7]  As is traditional, the EU-Cuba relationship was to an important extent influenced by Spain,[8] and Spain remains a significant long term investor, though by no means the only one, within Europe.[9]

 

The finalization of the PDCA was capped off by an official visit to Cuba of Federica Mogherini, then the E.U. High Representative for Foreign Affairs and Security Policy. The EU's Press Release announced the visit this way:

 

The High Representative/Vice President Federica Mogherini will travel to Cuba on 3-4 January, reconfirming the strong EU-Cuban relationship. During her visit, she will meet with government representatives, with a view to an ambitious and swift joint implementation of the Political Dialogue and Cooperation Agreement (PDCA) between the EU and Cuba. Together with Cuban Foreign Minister Bruno Rodriguez Parrilla she will also prepare for the first EU-Cuba Joint Council meeting at ministerial level within the framework of the PDCA.[10] 

 

The object was to negotiate implementation of the  PDCA, but also to celebrate it as a model of E.U. relations with states whose political and economic systems were in some ways incompatible with those of Europe. Critically important, in that sense, and the core component of system bridging at the heart of the PDCA was the structuring of the Joint Council established by PDCA to oversee the fulfillment of the agreement (PDCA art. 81) and the Joint Committee (Art. 82) charged with the actual implementation of the PDCA (Art. 82).  Some factions of the Cuban independent and dissident communities were highly critical of this endeavor generally and the visit more specifically.[11]

 

The PDCA remains an important milestone for European foreign policy.  It has become the template for European engagement with states and a means of projecting European values (either in the form of capacity building or continuous dialogue through trade and structural elements) in trade.  Its importance was underlined by the late 2020 negotiations of a similar pact, a “Comprehensive Agreement on Investment,” with the People’s Republic of China.[12] It was designed, in imitation of the PDCA, to force the hand of the United States and drive relations between the liberal democratic and socialist camps, during that moment between American Administrations .[13]  And, indeed, the value of these agreements as a means of resisting American moves against these trading partners has proven useful.[14]

 

                  It makes sense, then, to consider the form and substance of Cuba-EU trade through the lens of the PDCA, and that is the object of this paper. The paper is divided into two parts, the first examines the PDCA in detail.  In that context it seeks to extract the core bargain the Europe has been willing to strike as the foundation of its trade relationships with states the conduct of which are incompatible with European values and its human rights law. Most interesting is the possibility that in return for stronger ties the EU might have effectively waived the application of its strong business and human rights measures to EU Cuba bilateral relations. The E.U. appears to be willing to pay for its influence--from supporting the realization of Cuba's sector driven 2030 Economic Plan, to the E.U.'s help in avoiding or weakening the effects of the Cuban Embargo. In effect, a discursive analysis of the PDCA suggest that it is essentially a political document, rather than one the principal objective of which is to rationalize trade.  It is also one that seeks to create a comprehensive normative framework within which the political objectives, expressed through trade, might be structured.  

 

Part 3 then examines the state of trade relations through 2020, and in the shadow of the global pandemic. What appears here is that despite the transformation of driving trade principles, the state of actual trade and investment remains little affected.  That, in part, may be driven by the realities that Cuba has little to offer other than its strategic place in the world order.  And yet the E.U. may well have purchased something of value through PDCE that was unavailable through the mechanics of the more overtly political 1996 Common Position.[15] PDCA is an important element in the project of international normative legalization, that is in the construction of a distinct “common position” grounded in the narratives of the foundational normative principles of liberal democracy, markets and human rights. To the extent that the EU may be able to purchase it--through aid and economic activity tie in, it can potentially more effectively project ideological conformity through dialogue, capacity building, and conformity to its regulatory model.  The template, then, provides insight into the way that the EU approaches its relations with China,[16] and suggests that challenges as well as the objectives of the European form of intertwining of political and economic relations



[1] Political Dialogue and Cooperation Agreement between the European Union and its Member States, of the one part, and the Republic of Cuba, of the other part, 2016/0297 (NLE) COLAC 76 CFSP/PESC 753, 12504/16 Brussels 25 November 2016; available [https://data.consilium.europa.eu/doc/document/ST-12504-2016-INIT/en/pdf].

[2] Delegation of the European Union to Cuba, “Cuba and the EU,” EEAS Homepage (27 October 2017); available [https://eeas.europa.eu/delegations/cuba_en/8106/Cuba%20and%20the%20EU; see also Press Release: “MEPs Back First Ever EU-Cuba Deal,” European Parliament News  (5 July 2017); available [https://www.europarl.europa.eu/news/en/press-room/20170629IPR78654/meps-back-first-ever-eu-cuba-deal]; “Initialing Ceremony of the Political Dialogue and Cooperation Agreement between Cuba and the European Union,” EEAS Website (3 March 2016); available [https://eeas.europa.eu/headquarters/headquarters-homepage/3719_en] (“Joint Declaration at the Initialing Ceremony of the Political Dialogue and Cooperation Agreement between Cuba and the European Union”).

[3] Intervención de la Alta Representante / Vice-Presidente Federica Mogherini en el acto de firma del Acuerdo de Diálogo Político y de Cooperación entre la UE y Cuba,”  Delegación de la Unión Europea en Cuba (12 December 2016); available [https://eeas.europa.eu/delegations/cuba/16936/intervencion-de-la-alta-representante-vice-presidente-federica-mogherini-en-el-acto-de-firma_es]. Ms. Mogherini noted:

Cuando nosotros, en Europa, hablamos de un vínculo transatlántico, se suele pensar en los Estados Unidos. Pero hay más. Nuestro vínculo trasatlántico con el Caribe, con América Latina, es tan fuerte como nuestro lazo con los Estados Unidos. Para una italiana como yo, esto es evidente. El acuerdo nos ayudará a aprovechar plenamente el potencial de nuestra amistad. Se crea un marco para el diálogo político aún más fuerte, para nuevos diálogos de políticas sobre sectores específicos y para ampliar y concretizar la cooperación en una gran variedad de temas. El Acuerdo también nos ayudará a cooperar aún más estrechamente para encontrar soluciones conjuntas a los desafíos globales, tales como la migración, la lucha contra el terrorismo, el cambio climático (Ibid.).

[4] Proposal of the High Representative of the Union for Foreign Affairs and Security Policy to the Council for a Council Decision repealing Common Position 697/96 on Cuba COLAC 77; RELEX 783; CFSP/PESC 754; 12505/16 Brussels (25 September 2016); available [https://data.consilium.europa.eu/doc/document/ST-12505-2016-INIT/en/pdf].

[5] Council of the European Union, Common Position (96/697/CFSP) No. L 322/1 (2 December 1996); available [https://op.europa.eu/en/publication-detail/-/publication/8804281d-389f-4256-9850-7575ba769ec2/language-en], ¶3(a).

[6] Ibid., ¶¶3(e( and (f).

[7] Ibid. ¶ 4.

[8] On the development of the economic relationship during the Special Period, see, e.g., Eric N. Baklanoff, Circumventing the Embargo: The Strategic Context of Spain’s Economic Relations with Cuba, Cuba in Transition, ASCE, 2001, p. 302, available [http://www.ascecuba.org/publications/proceedings/volume11/pdfs/baklanoff.pdf.

[9] Daniel P. Erikson, “Europe’s Cuba Problem: The Limits of Constructive Engagement,”  International Institute for Democracy and Electoral Assistance (Stockholm, 2009).

[10] Press Release: HR/VP Federica Mogherini on official visit in Cuba,” EEAS (Brussels 29 December 2017); available [https://eeas.europa.eu/headquarters/headquarters-homepage/37943/hrvp-federica-mogherini-official-visit-cuba_en].

[11] Discussed in Larry Catá Backer, “Democracy Part 41: The E.U. in Cuba: Reflections From the Cuban Independent Sector,” Law at the End of the Day (30 January 2018); available https://lcbackerblog.blogspot.com/2018/01/democracy-part-41-eu-in-cuba.html].

[12] Ebony Bowden, “China and EU advance on trade deal in spite of human rights abuses,” The New York Post (30 December 2020); available [https://nypost.com/2020/12/30/china-and-eu-advance-on-trade-deal-in-spite-of-human-rights-abuses/].

[13] Evelyn Cheng, “China scores an EU investment deal before Biden takes office — and it wants to do more,” CNBC (31 December 2020); available [https://www.cnbc.com/2020/12/31/china-eu-trade-deal-beijing-wants-more-agreements-after-europe-deal.html]

[14] Larry Catá Backer, “Feeding a "Spiral of Legal Actions"--The EU and Canada Respond to the New US Initiatives on Cuba and the Caribbean,” Law at the End of the Day (20 April 2019); available [https://lcbackerblog.blogspot.com/2019/04/feedins-spiral-of-legal-actions-eu-and.html].

[15] Discussed infra Part 2.

[16] See, e.g., Silvia Amaro, “China’s investment deal with the EU has raised 3 big concerns in Europe,” CNBC (6 January 2021); available [https://www.cnbc.com/2021/01/06/china-eu-trade-deal-what-it-is-and-why-it-might-fail.html].


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