Green Line Reg­u­la­tion not fit for pur­pose

Trade be­tween Turk­ish and Greek Cypri­ots suf­fers as talks re­main in limbo

Financial Mirror (Cyprus) - - CYPRUS - By Kyr­i­a­cos Kil­iaris

As re­u­ni­fi­ca­tion talks seem to be go­ing nowhere, con­fi­dence build­ing mea­sures (CBMs) to re­build trust like Green Line trade has also stag­nated.

One of the most im­por­tant CBMs in en­cour­ag­ing peo­pleto-peo­ple con­tact is trade through the EU Green Line Reg­u­la­tion, but fig­ures are sig­nif­i­cantly lower than ten years ago.

While the Green Line Reg­u­la­tion, im­ple­mented in Au­gust 2004, seemed to be a promis­ing step, fig­ures for prod­ucts sold by Greek Cypri­ots to Turk­ish Cypri­ots have re­mained sta­ble for a decade, while sales of Turk­ish Cypriot prod­ucts to the south have plunged.

Stake­hold­ers on both sides of the di­vide agree that trade be­tween the two com­mu­ni­ties is prob­a­bly the most im­por­tant CBM which could lay the ground­work for peace­ful co­ex­is­tence in the fu­ture, and that trade fig­ures could be a lot bet­ter.

Since its in­tro­duc­tion 14 years ago, Greek Cypri­ots have sold prod­ucts worth a to­tal of EUR 14 mln to traders in the north, while Turk­ish Cypriot prod­ucts worth EUR 54 mln have passed to the south.

An amount con­sid­ered by an­a­lysts and stake­hold­ers as poor, given that Greek Cypri­ots sell only EUR 1 mln worth of goods on av­er­age each year, while Turk­ish Cypri­ots sell EUR 3.85 mln.

Turk­ish Cypri­ots feel that lim­i­ta­tions ap­plied to their prod­ucts al­lowed through the Green Line is un­der­min­ing the reg­u­la­tion’s man­date. Cur­rently, mostly fresh pro­duce and raw ma­te­ri­als oc­cupy the list of items be­ing traded.

An of­fi­cial of the Turk­ish Cypriot Cham­ber of Com­merce (KTTO) told the Fi­nan­cial Mir­ror that re­stric­tions on prod­ucts such as pro­cessed food is ham­per­ing the reg­u­la­tion’s true po­ten­tial. The of­fi­cial said that the trade of pro­cessed foods is not al­lowed as the Greek Cypri­ots want to see health con­trols ap­plied to the prod­ucts which cer­tify they are EU stan­dard.

Ac­cord­ing to the KTTO, the prob­lem could be solved eas­ily with the in­tro­duc­tion of a con­trol mech­a­nism set up by the Euro­pean Com­mis­sion, such as the one in­tro­duced for the fresh fish trade.

“Spe­cial­ists are sent by the EC pe­ri­od­i­cally to per­form checks on the ves­sels and the lo­ca­tions where they are treated and cleaned. A sim­i­lar mech­a­nism ex­ists for fresh pro­duce, with an EC mech­a­nism is­su­ing phy­tosan­i­tary doc­u­ments.”

“Cer­tainly, one can be ap­plied for pro­cessed food, but un­for­tu­nately the mat­ter is stuck as the Greek Cypriot side does not con­sent to such a mech­a­nism”.

He added that fresh fish was not in­cluded in the orig­i­nal list of prod­ucts al­lowed, but was added in 2007.

Ac­cord­ing to data pro­vided by Fi­nance Min­is­ter Har­ris Ge­or­giades while re­ply­ing to a ques­tion posed by Greens MP Gior­gos Perdikes, al­most EUR 800,000 worth of fresh fish has been sold to Greek Cypri­ots in 2017. longer be do­ing busi­ness with Turk­ish Cypriot pro­duc­ers.”

Mete Hatay, a con­sul­tant at the PRIO Cyprus Cen­tre, and re­searcher who has been fol­low­ing Green Line trade over the years, feels that whereas the reg­u­la­tion should have been the pil­lar on which in­ter-depen­dence of the two com­mu­ni­ties should have been built, it has led to reper­cus­sions due to the lack of proper con­trol.

He said the reg­u­la­tion came as a breath of fresh air for many Turk­ish Cypriot pro­duc­ers, how­ever, there were cases where in­stead of pro­mot­ing co­op­er­a­tion, it has ac­tu­ally fed the re­sent­ment be­tween the two com­mu­ni­ties.

Hatay re­ferred to the potato trade say­ing: “Be­cause of the al­ready ex­ist­ing prej­u­dice, Turk­ish Cypriot pota­toes are not pre­ferred by Greek Cypri­ots. So Turk­ish Cypriot pro­duc­ers lower their prices, which causes un­fair com­pe­ti­tion for the Greek Cypriot pro­duc­ers, thus in­creas­ing their re­sent­ment to­wards the Turk­ish Cypriot com­mu­nity.”

He ar­gues that the list of prod­ucts al­lowed to cross over has to be re­vised as lim­i­ta­tions on food prod­ucts is giv­ing way to smug­gling in­stead.

“One of the big­gest prob­lems is smug­gling of meat from the south to the north. Be­cause the Greek Cypri­ots do not al­low food prod­ucts to pass, our side has mir­rored their prac­tices. This has led to tens of tons of meat be­ing smug­gled ev­ery year from the Greek Cypriot side,” said Hatay.

The Turk­ish Cypriot re­searcher added that the Cyprus Repub­lic should also re­visit its VAT pol­icy when it comes to prod­ucts sold by Greek Cypri­ots to Turk­ish Cypri­ots.

Hatay said that Zi­va­nia pro­duced by Greek Cypri­ots is be­ing im­ported from Le­banon as it costs less than buy­ing di­rectly from a Greek Cypriot who has to ap­ply 19% VAT when deal­ing with Turk­ish Cypri­ots, but not when he ex­ports it to third coun­tries like Le­banon.

“Most im­por­tantly, trade be­tween the two com­mu­ni­ties has to be en­cour­aged and en­dorsed by the po­lit­i­cal elites of the two sides. The GLR is a great tool to build in­ter­de­pen­dence be­tween the two com­mu­ni­ties.

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