European Integration: The Case of Cyprus

Abstract

The article is concerned with the extent to which the Association Agreement with the EU has affected Cyprus's level, pattern and direction of trade and the implications
for EU membership. While there is evidence of constrained import trade creation between 1972 and 1993 there appears to have been net export trade contraction over
the period. The trade deficit with the EU has declined in relative terms and there is a healthy surplus on services, yet the experience of the last two decades suggests that
there are uncertainties about the benefits of EU membership. Nevertheless, careful planning can bring new economic opportunities, and more importantly, full EU membership can provide the conditions for enhanced mutual security and sensitive trust building between the two communities.