6

Today Catalonia declared independence from Spain.

The European Union and the United States have stated they will only deal with Spain, meaning they do not recognize Catalonia as a country.

Which disadvantages does this have for Catalonia, aside from the fact that they can't negotiate directly with the United States, and countries of the European Union? How does this affect, for example, exports and imports from the United States and the European Union to the region of Catalonia?

Improve this question
2
  • 2
    I'm not sure this is really answerable. But the most obvious disadvantage is that without international recognition, their 'declaration' will probably end in a (likely successful) police action on the part of Spain.
    – Jack Of All Trades 234
    Oct 27, 2017 at 19:20
  • Those are the things you should consider when independence is secured. But not it doesn't look that way.
    – user3528438
    Oct 27, 2017 at 20:33

1 Answer 1

Reset to default
4

TL;DR: The lack of recognition leads to a "corruption tax" paid by the citizens of an unrecognized territory. That's why the recognition is the key factor for any region.

Consider this (the US is just for example below):

Politically, the US is an ally of Spain, and many international treaties recognize the territorial integrity of Spain, in its existing borders. Hence, the US will not co-operate with any entity that undermines this integrity.

Economically, imagine that an US exporter/importer signs a deal with a company based in the independent Catalonia. A legal Spanish competitor would seek justice and be able to win the case in the court.

So, the direct answer to your question,

How does this affect for example, exports and imports from United States and the European Union to the region of Catalonia?

— There will be zero direct exports and imports in this case.

However, there will be indirect trade, just the way how ISIS trades oil via the corrupted proxies located in recognized countries. Most obviously, such trade assumes significant discounts (also called "corruption tax", CT).
In other words, if a recognized entity sells something for $1, an unrecognized one would be able to sell the same good for $1-CT so that, after being "legalized" through a chain of corrupted proxies who take CT as a premium, the item could be legally sold for $1.
The same applies to import: an unrecognized entity would be able to buy something for $1+CT.

So, the people who live in an unrecognized country, will suffer by paying the corruption tax twice: both for import and export. This is the main disadvantage.

A country can also rely on its own resources. For instance, Juche, the official state ideology of North Korea, is based on self-sustenance, relying solely on its own resources, and denying the international trade.

Improve this answer
6
  • 5
    Has Spain declared an embargo?
    – user9389
    Oct 27, 2017 at 19:59
  • 2
    A fair amount of its citizens is effectively putting it in practice
    – Whimusical
    Oct 28, 2017 at 23:30
  • 3
    (1/2) I am unsure about the economical part of this answer. Why would the Spanish government consider Catalan businesses "illegal"? From their point of view, except very specific cases where the business declared himself pro-independence and has a "rebellious" behavior, this business is Spanish. A possible problem point could be if the business pays his national tax to Catalonia instead of Spain. But why would the US company care about it? From the US point of view, this is just a Spanish problem.
    – Taladris
    Oct 29, 2017 at 6:11
  • 3
    @notstoreboughtdirt No, no embargo has been declared. It would be a)highly unpopular both in Catalonia and the rest of Spain and b) probably difficult to enforce (although it could be possible) in the context of free trade inside the EU. Also, when someone declares an embargo against a region of its own country, it is a tacit recognition that they no longer control the country (if you control the region, you can already decide what gets in and out and what does not). All of which makes embargo a "last resort" measure.
    – SJuan76
    Oct 29, 2017 at 12:15
  • 3
    Some people have been asking for a boycott of Catalonian products but that a) is a different action and b) is not ordered, organized or advised by the government and c) has been opposed by many Spanish politicians. I have no actual data about how effective that boycott is.
    – SJuan76
    Oct 29, 2017 at 12:28

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .