Foreign Investment in Cuba: From Conflict to Resolution

Author
Rafael-Andrés Velázquez-Pérez, Miguel-Ángel Michinel-Álvarez, Margaret Crahan, Gabriel Vignoli
Content Type
Book
Institution
Institute for Latin American and Iberian Studies at Columbia University
Abstract
This manuscript originates from research initiated in 2010 at the University of Vigo in International Private Law with a specific focus on International Investment Law. The objective was to analyze the impact of the new paradigm of sustainability on this sphere of the law, with an emphasis on developing countries, and more specifically Cuba. This line of research has resulted in several publications intended for a Spanish-speaking scientific-juridical audience. Yet there is no scholarly work directly aimed at US investors as a prioritized target group. Being the first single Foreign Direct Investor in the world, and given its geopolitical and economic proximity, the US is bound to play a prime role in the field of investments in Cuba—despite political complications. As a consequence, we opted for a bilingual monograph on this topic with a dual purpose. The first part of the book, which is aimed at reaching a wide audience, examines the role played by foreign investment in Cuba and the country’s interest in attracting it by providing investors with a modern, stable, and coherent legal framework that is in line with current international standards. The second part of the book delves into specific technicalities of international investment law— with an emphasis on the conflict resolution system, which finds in arbitrage its main mechanism. This part, technical in nature, is not directly aimed at potential investors as much as their legal advisers, legal firms, arbitrators, and specialized scholarly communities—without whose input the success of foreign direct investment would be impossible. The text also engages critically with the specificities of US-Cuba relations in the context of Foreign Direct Investment. As shown in the first part of this monograph, it seems clear that the strategies pursued by different US administrations have thus far failed. It would be to the US’ benefit to forego the current policy of confrontation in favor of one of cooperation, as exemplified by the approaches taken by Latin America, xiv Europe, and Canada. The US should not lag, if it wants to attain a strategic position in the global repositioning toward the developing Cuban market. There is a need for targeted diplomatic and legislative efforts aimed at strengthening cooperation between the two countries in terms of investment. Among the challenges is the absence of a Bilateral Investment Treaty (BIT) between Havana and Washington. The obstacles faced by the Trump administration in the political, diplomatic, and financial sphere indicate that excessive isolationism and protectionism are not only counterproductive from a financial viewpoint, but they also imply for the US a loss of sovereignty and a diminished capacity to influence the international context. Should the US not change its current policy, it will be outperformed by other international actors such as the European Union and the BRICS (Brazil, Russia, India, and China) as investors in Latin America and in Cuba.
Topic
Treaties and Agreements, Bilateral Relations, Foreign Direct Investment, Law, Economy, Legislation
Political Geography
Cuba, Latin America, Caribbean, United States of America