NICOSIA(Reuters)–Turkey and the breakaway enclave of northern Cyprus on Friday signed a deal forming a customs union which Brussels may see as undermining UN-backed efforts to unite the divided island before its EU accession next year. The framework agreement could also complicate Ankara’s efforts to secure accession talks with the European Union in late 2004. Northern Cyprus is recognized only by Ankara. The European Union expressed its regret that Turkey had not consulted it before the agreement was signed.
"With this agreement we will ensure the integration of the northern Cypriot economy with that of the EU and the international community," Turkish Deputy Prime Minister Abdullatif Sener said at a televised ceremony in the north. The Turkish Republic of northern Cyprus already enjoys cozy economic and political ties with Turkey. The two share the same Turkish lira currency and Ankara pumps tens of millions of US dollars into the Turkish Cypriot economy every year. It was not immediately clear how the agreement might affect Turkey’s own customs union with the European Union–which it hopes to join.
"We believe that we should have been consulted before this agreement was signed," European Commission spokesman Eric Mamer told Reuters.
"We will clearly be checking it with regard to all the association and customs union agreemen’s that we have with Turkey."
Turkey also keeps some 30,000 troops on Cyprus–divided since it invaded the north in 1974 after a brief Greek Cypriot coup engineered by the military then ruling Greece. Under the agreement–Turkey and the Turkish Cypriots vowed to reduce port and airport taxes to a bare minimum. Turkey would also raise credits to bolster infrastructure and foreign investment–Turkey’s state-run Anatolian news agency reported. Turkish Cypriot leader Rauf Denktash has called for further economic integration with Turkey since UN-backed peace talks with the Greek Cypriot south collapsed in March. Analysts said the agreement marked a setback for Ankara in its improving relations with Brussels after its parliament passed a swathe of EU-inspired reforms in recent weeks.
"Here we have a legal tangle and the reaction from Brussels will be very negative… It’s a political move–perhaps–to put pressure on the Greek Cypriot side for a solution," said Sami Kohen–columnist for Turkish daily Milliyet.
The deal comes just after the United Nations announced it had withdrawn its special envoy to Cyprus Alvaro de Soto and would not replace him–deepening a stalemate on the island.
"This is part of the overall illegality of the continuing occupation of northern Cyprus by Turkey," Greek Cypriot government spokesman Kypros Chrysostomides told Reuters.