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Thursday January 30, 2014 MYT 5:25:01 PM
Thursday January 30, 2014 MYT 5:25:57 PM
by robin emmott AND fiona ortiz
BRUSSELS/MADRID (Reuters) - The European Union will agree next month to deepen relations with Cuba in its most significant overture to the communist island since the bloc lifted diplomatic sanctions in 2008, people close to the matter told Reuters.
Foreign ministers from the EU's 28 countries will give the go-ahead on February 10 to launch talks with Havana on a special cooperation accord to increase trade, investment and dialogue on human rights. The pact could be agreed by the end of 2015.
"Cuba wants capital and the European Union wants influence," said one person involved in the talks who declined to be named because of the sensitivity of the issue. "This cooperation could serve as a prelude to much more."
Two other people with knowledge of the negotiations told Reuters that a consensus had been reached in Brussels to give momentum to Cuba's market-oriented reforms under President Raul Castro and to position European companies for any transition to a more capitalist economy there in the longer term.
While the initial impact of a cooperation agreement will be limited, the symbolism is huge for the EU, whose ties with Cuba had been strained since it imposed sanctions in 2003 in response to Havana's arrest of 75 dissidents.
Although the EU lifted those sanctions in 2008, the normalisation of relations has been tortuous because of resistance from Poland and the Czech Republic due to their own communist past.
Havana has rejected the EU's "common position" on Cuba that the bloc adopted in 1996 to promote human rights and democracy.
Furthermore, the United States, Cuba's long-time foe that has kept an embargo against the Caribbean island since 1962, had exerted pressure on Brussels to try to isolate Havana.
Washington has not sought to block the EU's latest efforts, people close to the talks said, while Poland and the Czech Republic now back a deal with Cuba.
In a sign of impatience with the status quo, the Netherlands sent its foreign minister to Havana in January. This first such trip by the Dutch since the 1959 Cuban Revolution broke with EU policy to limit high-level visits.
Spain, the former colonial power in Latin America and the Caribbean, has also been pushing for a change of approach since ailing, long-time Cuban leader Fidel Castro handed power to his younger brother Raul in 2008.
Some EU countries see the 1996 "common position" policy as outdated because 18 EU governments have bilateral agreements with Cuba outside the common position, making it hard for the bloc to speak with one voice.
Still, Spanish Foreign Minister Jose Manuel Garcia-Margallo has been adamant that the "common position" will remain for the time being while the European Commission, the EU executive, negotiates the cooperation pact.
"If Europe wants to have a presence when there's a transition in Cuba, the EU has to start working now. It's right to start dialogue now so that Europe isn't absent when a transition happens," said Carlos Malamud, head of Latin American research at the Real Instituto Elcano, a think-tank in Madrid.
A cooperation pact, which the EU has used as a tool in the past to strengthen relations with Central America and Asia, is not likely to increase trade greatly because Cuba sells very little to Europe.
Besides cigars and rum, Cuba's exports are not of huge interest to the EU, but Brussels believes developing business ties is the best way to press for change in Cuba.
The European Union is Cuba's biggest foreign investor and Cuba's second biggest trading partner after Venezuela, and a third of the tourists to the island every year come from the EU.
Cuba recently opened a Chinese-style special economic zone and is preparing a new foreign investment law. It is seeking foreign investment at its port facilities in Mariel Bay to take advantage of the expansion of the Panama Canal.
(Additional reporting by Adrian Croft; Editing by Mark Heinrich)
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