WORLD TRADE
ORGANIZATIONWT/REG97/R/B/1
G/L/363
14 April 2000
(00-1529)
Original:  French
ASSOCIATION AGREEMENT BETWEEN THE EUROPEAN COMMUNITY
AND CYPRUS
Biennial Report on the Operation of the Agreement
Communication from the Parties
The report below presents the information rece ived from the Permanent Delegation of the
European Commission, dated 21 March 2000.  It is organized in accordance to the standard format
(WT/REG/W/6).
_______________
I. BACKGROUND INFORMATION ON THE AGREEMENT
2. Type of agreement
Since 1973, Cyprus has been linked to the European Community by an association agreement
which provides for the establishment of a customs union in two stages over a period of ten years.
After several successive extensions of the first stage, a protocol on stage two of the Agreement was
signed in Luxembourg on 19 October 1987.  Pursuant to this protocol, the final phase of theestablishment of a customs union, itself broken down into two phases, began on 1 January 1988.
The first phase provides for:- Reduction by Cyprus of customs duties, and quantitative restrictions on industrial
products (with a few exceptions) and on 43 agricultural products covered by the
Agreement;
- adoption by Cyprus of the Common Customs Tariff (CCT);  and
- harmonization of accompanying policies:  competition rules, state aids, approximation
of laws.
The second phase provides for totally free movement of industrial and agricultural products
and the adoption of the accompanying policies necessary to complete the customs union.
4. Trade data
The member States of the European Union (EU)  are the major suppliers of goods to Cyprus,
accounting for 55 per cent of total imports in 1998.WT/REG97/R/B/1
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Imports into the EU from Cyprus amounted to ECU 427 million in 1998, while exports to
Cyprus totalled ECU 2,106 million.
Supplementary statistical information, which also covers the rest of the world, appears in the
Annex.
II. TRADE PROVISIONS
1. Import restrictions, and
2. Export restrictions
Since 1 January 1998, Cyprus has:
(i) Abolished all customs duties on manufactured goods originating in the EC and
referred to in the Protocol;
(ii) abolished all quantitative restrictions;  and(iii) aligned its tariffs completely with the CCT for manufactured goods from third
countries.
The transitional measures of the additional protocols signed in 1987 following the accession
of Spain and Portugal to the European Communities and relating to imports into these two countries
of industrial and agricultural products from Cyprus have now expired.
3. Rules of origin
4. Standards5. Safeguards
6. Anti-dumping and countervailing measures, and
7. Subsidies and State aid
Within the framework of the accession negotiations, Cyprus will gradually take up all of the
EC's trade policy instruments.
8. Sector-specific provisions
On 28 July 1989 the EEC-Cyprus Association Co uncil granted a two-year exemption from
rules of origin for certain textile products manufactured in Cyprus;  a request for an extension to this
exemption was turned down in August of this year.
The provisions of the agreement relating to agriculture have remained unchanged.WT/REG97/R/B/1
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III. GENERAL PROVISIONS OF THE AGREEMENT
5. Institutional framework
The institutions established by the Association Agreement, including the Association Council,
are working smoothly. In the framework of preparations for the accession of Cyprus, they were
completed through structured dialogue followed by the process of accession negotiations.
IV. OTHER
Financial aspects
Cyprus has benefitted from a total contribution ECU 136 million (including loans from the
European Investment Bank, EIB, and venture capit al) under three successive financial protocols,
spread over the years 1977 to 1994.
A fourth financial protocol was signed on 30 October 1995 for a total of € 74 million, made
up of  € 50 million in loans from the EIB, € 22 million in grants and € 2 million in venture capital.
Pre-accession
The Luxembourg European Council decided on an individual pre-accession strategy for
Cyprus based on participation in a number of targeted activities, particularly in the fields of
administrative and judicial capacity building, justice and domestic affairs, on participation in various
programmes and community agencies, and on the use of the technical assistance offered by TAIEX.
Services and intellectual property
These aspects are not covered by the Association Agreement.  No specific agreement has
since been signed in these areas.WT/REG97/R/B/1
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Page 4ANNEX1
Table 1 – EU Imports from the World and Cyprus 1980-1998
(Millions of ECU)
S I T C : 0 123 4 56789 T O T A L
1980 (EU 9)
      World 23,908 1,929 27,501 85,384 1,579 11,374 37,648 37,853 22,176 20,502 269,853
      Cyprus 109 12 10 9 0 1 4 29 38 54 265
1984 (EU 10)
      World 33,643 2,810 36,139 107,594 2,803 19,968 48,969 71,432 34,537 24,205 382,100
      Cyprus 145 10 8 - 0 2 8 13 52 45 284
1988 (EU 12)
      World 32,221 2,152 35,752 47,393 1,499 25,067 59,078 106,689 49,968 27,937 387,757
      Cyprus 124 5 12 5 0 15 21 101 109 6 400
1992 (EU 12)
      World 34,580 3,215 32,218 65,183 1,748 33,888 69,355 146,277 76,771 23,900 487,135
      Cyprus 111 14 8 1 0 6 23 238 166 29 597
1996 (EU 15)
      World 41,305 3,599 34,829 75,910 2,423 44,328 75,479 189,056 93,962 20,131 581,065
      Cyprus 141 16 15 5 0 10 16 245 112 4 564
1997 (EU 15)
      World 44,248 4,072 40,131 85,155 2,554 51,485 87,685 229,346 108,779 17,690 672,413
      Cyprus 70 15 21 3 0 10 23 120 109 2 372
1998 (EU 15)
      World 45,198 4,458 39,370 64,843 2,891 55,290 94,672 264,153 116,092 22,676 709,643
      Cyprus 86 14 16 1 0 13 19 169 105 3 427
                                                     
1 Source for all tables:  Eurostat (COMEXT)WT/REG97/R/B/1
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Page 5Table 2 – EU Exports to the World and Cyprus 1980-1998
(Millions of ECU)
SITC: 0 1 2 3 4 5 6 7 8 9 TOTAL
1980 (EU 9)
      World 13,662 3,422 4,327 10,071 717 23,228 46, 455 84,154 21,333 13,716 221,084
      Cyprus 44 13 2 14 1 40 105 146 47 111 522
1984 (EU 10)
      World 21,120 5,784 7,319 18,087 1,343 38,465 65,412 129,088 39,835 24,806 351,259
      Cyprus 93 24 8 53 18 96 227 378 94 102 1,093
1988 (EU 12)
      World 19,588 6,205 7,602 8,232 1,158 44,449 65, 673 141,249 48,507 20,256 362,917
      Cyprus 88 21 9 48 8 98 221 406 95 60 1,053
1992 (EU 12)
      World 24,887 8,778 8,068 10,552 1,491 54,200 71,091 180,838 59,247 16,939 436,091
      Cyprus 122 69 14 63 10 135 326 988 224 123 2,073
1996 (EU 15)
      World 30,646 10,339 11,414 15,431 1,998 79,14 4 102,957 283,081 79,287 12,695 627,011
      Cyprus 146 60 18 75 10 176 336 782 241 45 1,938
1997 (EU 15)
      World 33,504 12,374 13,084 17,109 2,575 93,04 6 114,927 331,113 88,686 13,717 721,109
      Cyprus 172 62 22 67 7 215 331 725 312 26 1,958
1998 (EU 15)
      World 31,772 12,005 11,554 13,833 2,831 95,88 5 112,815 343,435 89,424 16,869 730,423
      Cyprus 161 49 23 67 10 214 351 844 341 34 2,106WT/REG97/R/B/1
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Page 6Table 3 – EU Trade with Cyprus by HS Section
(Millions of ECU)
EXPORTS IMPORTS
SECTION 1988 1992 1996 1997 1998 SECTION 1988 1992 1996 1997 1998
TOTAL 1,053 2,073 1,938 1,958 2,106 TOTAL 400 597 564 372 427
I2 1 2 6 2 7 3 2 3 2 I 3 4 5 8 7
II 27 26 41 54 33 II 104 96 125 55 73
III 9 12 11 9 12 III 0 0 0 0 0
IV 64 141 140 151 148 IV 24 26 27 22 22
V 5 1 6 8 7 87 17 1 V 1 5 9 1 11 2 9
VI 71 115 146 184 190 VI 16 7 9 10 13
VII 48 56 72 76 76 VII 2 2 6 5 5
VIII 13 14 12 13 14 VIII 13 8 4 5 3
IX 8 13 22 25 27 IX 0 0 0 1 0
X2 9 4 6 8 2 9 6 9 5 X 5 6 4 5 5
XI 89 111 122 142 166 XI 89 133 87 79 74
XII 5 7 17 23 27 XII 3 5 1 1 3
XIII 30 53 61 59 60 XIII 0 0 1 1 1
XIV 15 37 22 24 30 XIV 0 0 2 1 2
XV 69 127 128 124 137 XV 10 6 11 20 16
XVI 199 335 342 355 464 XVI 12 17 44 54 57
XVII 208 655 448 382 388 XVII 89 221 201 65 110
XVIII 19 47 31 49 44 XVIII 2 17 13 15 15
XIX 10 48 5 3 5 XIX 2 1 1 1 1
XX 18 32 47 50 58 XX 5 9 9 11 9
XXI 14 41 16 16 16 XXI 2 4 2 2 4WT/REG97/R/B/1
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Page 7Table 4 – EU Trade with the World by HS Section
(Millions of ECU)
EXPORTS IMPORTS
SECTION 1998 1992 1996 1997 1998 SECTION 1988 1992 1996 1997 1998
TOTAL 362,917 436,091 627,011 721,109 730,423 TOTAL 387,757 487,135 581,065 672,413 709,643
I 7,060 8,001 9,980 10,897 10,062 I 8, 349 10,300 10,897 12,227 13,296
II 6,372 8,511 8,819 9,757 9,145 II 17,55 5 17,353 23,130 25,437 24,992
III 1,341 1,673 2,286 2,977 3,156 III 1,542 1,781 2,250 2,390 2,693
IV 13,817 19,194 24,510 27,744 27,279 I V 13,638 15,595 18,511 19,019 19,518
V 9,723 12,152 17,487 19,630 16,711 V 55,920 73,081 84,793 95,737 75,508
VI 37,393 46,951 68,968 81,772 85,215 V I 22,179 29,303 39,774 46,234 49,432
VII 15,521 16,914 23,128 27,148 27,504 V II 10,125 13,862 17,132 19,323 21,043
VIII 4,119 4,084 7,159 7,375 6,435 VIII 6,121 5,701 7,590 8,498 8,224
IX 1,771 2,035 4,045 4,927 5,182 IX 9, 615 10,926 9,118 10,973 11,434
X 7,937 10,271 18,033 19,764 19,803 X 17,605 19,227 11,110 11,996 12,571
XI 20,244 25,208 31,611 34,724 35,221 X I 28,639 39,478 47,467 55,248 57,903
XII 3,440 4,526 5,922 6,313 6,043 XII 3,325 5,451 7,029 8,308 8,274
XIII 7,153 8,120 11,257 12,916 12, 894 XIII 2,593 3,883 4,386 5,090 5,648
XIV 13,026 12,425 16,992 19,285 17,990 X IV 17,526 15,037 21,620 23,890 26,981
XV 30,826 30,864 42,214 46,944 45,623 X V 26,101 29,345 33,661 40,312 44,472
XVI 93,666 120,842 193,730 226,482 234,539 XVI 81,389 106,397 146,298 173,122 195,378
XVII 46,674 59,351 89,086 104,705 110,049 XVII 25,240 40,386 42,797 56,275 68,476
XVIII 14,107 17,067 23,982 28,129 29,109 XVIII 14,869 19,652 24,343 27,814 29,926
XIX 402 388 1,097 1,326 1,656 XIX 118 194 466 603 510
XX 7,819 9,378 13,350 15,177 15,242 XX 6 ,655 12,072 14,394 17,529 19,046
XXI 8,204 5,727 13,354 13,115 11,565 XXI 5,733 5,511 14,298 12,387 14,318
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