Free Trade; paving the path to economic integration
H.E Mr. Wilhelm SCHÖNFELDER
Permanent Representative of the Federal Republic of Germany to the EU
Brussels
Free Trade; paving the path to economic integration.
Your Excellency,
I believe that although, it is important to understand how the Turkish Cypriots ended up as such, it is more important to be capable of shaping the future in view of past experiences. Turkish Cypriots feel exhausted as a result of their continuous struggle on the way to a peaceful settlement of the Cyprus Problem and their EU membership, and are frustrated and confused under the deliberate misinformation going on. Consequently, they are expecting concrete initiatives and steps from the European Union as a way out.
Turkish Cypriots do not want to rely on unattainable and unrealistic policies based on political concerns any more. These policies are not based on Turkish Cypriots’ interests but primarily take others’ interests into consideration. After being bound to follow unrealistic and unattainable settlement models for years and years, the time has come for Turkish Cypriots to see solid steps that will help build their futures in “An EU member bi-communal, bi-zonal, Federated State based on political equality”.
High and usually diluted expectations were created within the Turkish Cypriot community through several scenarios put forward. On the failure of these scenarios, artificial “enemies”, were then created and be blamed. I find the lack of self-confidence within the community not instantaneous, but deliberately encouraged.
During the long process which began with the application of the Republic of Cyprus to accede the EU and ended with her membership, Turkey was given the Candidate Country status and, her accession negotiations have begun. Turkish and Cypriot processes were interdependent and in the end Turkish Cypriots felt left out in the cold, while everybody else getting their fair share. As a result, the Cyprus problem has become a focal point of the EU, and Acquis Communautaire became the primary law on which any measure and initiative should be based.
In particular, Protocol 10, annexed to the Accession Treaty of 10 new Member States, signed on 16th April 2003, redefined the Cyprus problem, EU becoming its primary actor. Following the description of the area where Turkish Cypriots live as:”the areas of the Republic of Cyprus in which the Government of the Republic of Cyprus does not exercise effective control”, the Cyprus problem entered into a new stage.
European Commission’s proposals based on the Council Decision of 26th April 2004 to facilitate the reunification of the island, and the Council Regulations based on Protocol 10 reflect the will and the determination of the EU in finding a solution to the Cyprus Problem.
The “Greenline Regulation” and the “Financial Aid Regulation” are now in force. The Council conclusions of 22nd January 2007 stated that “the Work aiming at the adoption of the Commission proposal for a Council Regulation on special conditions for trade with the areas of the Republic of Cyprus in which the Government of the Republic of Cyprus does not exercise effective control must resume without delay " in line with the Council Decision of 26th April 2004.
The written opinion of the Legal Service of the Council submitted on 25th August 2004, regarding the “Direct Trade Regulation” proposed by the Commission on 7th July 2004, which concerns trade between the ‘”the areas of the Republic of Cyprus in which the Government of the Republic of Cyprus does not exercise effective control and the Community” can be summarised as follows;
The legal basis should be Article 1 (2) of Protocol nº 10 to the Treaty of Accession, and not Article 133 of the EC Treaty,
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In the view of the Legal Service, the adoption of the proposal would be prima facie contrary to the rules of International and Community law, insofar it would ignore the sovereign right of the Government of Cyprus to declare the closure of the ports in the areas,
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The EU or its Institutions cannot recognise any authority in the areas other than the Government of the Republic of Cyprus,
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Article 2(2) of the proposal is not correct legally, insofar as it would allow the Commission to designate the Turkish Cypriot Chamber of Commerce or other body as a competent authority for the implementation of the proposed measure, without the agreement of the Government of the Republic of Cyprus.
Your Excellency,
The compatibility of the “Direct Trade” proposal with the 24th April 2004 Council Conclusions in view of the legal opinion and the maintenance of two separate economies side by side is disputable. It should be well noted that the Council’s statement was “to end the isolation of Turkish Cypriots, to integrate the economy of the island, to improve the contacts between the two communities and with the EU and to help to reunify the island”.
Considering the views of the Legal Office together with the analysis that the proposal does not cover the conclusions of the Council to its full extend; its easy to come to the conclusion that it’s not fully compatible with the statement “The Council is determined […] to facilitate the reunification of Cyprus”of 26th April 2004 which was reemphasised on 22nd January 2007. Insisting on such an initiative may signal that a new legal basis has been found for the proposal- which we might not be aware of- or more likely that another deadlock will be created serving no other purpose then disappointing the Turkish Cypriots one more and hence empowering the EU sceptics within both communities to blame the European Union once again.
I trust that the Cyprus EU Association’s long standing proposal of “Free Trade; Free movement of goods and services within Cyprus” continues to provide an answer to this dilemma and even more so at this moment in time and current state of affairs. I would like to emphasise once more that Free Trade, will help to achieve the results aimed by the EU and will result in a win-win situation for all parties involved. I am hoping that your Honourable Presidency will take this proposal into its agenda and elaborate on it. A short summary of the proposal is given below.
Free trade, suggests that northern Cyprus is de-facto included into an economic integration model with the Republic of Cyprus and the European Single Market. For this proposal to work, not only necessary steps should be taken to allow free movement of goods and services but also related Turkish Cypriot legislation should be promptly harmonised with the Acquis.
I am confident that, it’s possible to get the Republic of Cyprus’ consent on reopening the Turkish Cypriot ports and airports to international traffic provided that they are operated in line with the Acquis and under the supervision of the EU. It will thus be possible to trade all originating and non-originating goods all over the island, without creating unfair competition and without posing any threats to public health. As a result, besides free movement of people, which is now partially in force “free movement of goods” will also be achieved and the first steps towards the integration of the island’s economy will be taken. The Financial Aid of 259 million Euros, can also be partly used to harmonise with related chapters of Acquis Communautaire and to improve the infrastructure and the competitiveness of the Turkish Cypriot Economy.
“Free trade” will enable the Turkish Cypriot community to take part in the trade which though not to a great extend, has already started to be actualised between Turkey and the Republic of Cyprus. This trade is expected to substantially increase with Turkey’s extension of the Ankara Agreement to include the Republic of Cyprus. This will also help hinder the illegal activities that can currently not be tracked and prevented based on International Law and reverse their recent escalation.
Some Member States, including the Republic of Cyprus perceive Direct Trade as political upgrading of the Turkish Cypriot authorities and this creates more problems between the two communities rather then bringing them together. In addition, the Direct Trade proposal foresees two separate economies rather then one single economy and is therefore not compatible with the two Council Conclusions. Free Trade will transcend these problems, decrease the disparities between the two economies and pave the path to the framework of a settlement by creating joint ventures and interdependencies. This has become unavoidable and irrevocable following the europeanisation of the problem and will have to be put into process sooner or later, eventually making Turkish Cypriots live with European standards in addition to their current European citizenship.
It’s important to note that not only the Turkish Cypriots will benefit from this model but the economic integration of the island will also favour the Greek Cypriots. Such a positive step in Cyprus in addition will have favourable effects on the problem of opening the Turkish ports to the Republic of Cyprus and the Turkish Government will be able to do so without receiving any public pressure.
I wish you all the success during your Presidency in all your dossiers but specifically in your concrete steps towards the Settlement of Cyprus Problem. I would like to once more underline that I, in my capacity as the President of the Cyprus EU Association, together with my Executive Board am at your disposal to assist your efforts within this framework.
Yours faithfully,
Ali Erel-President