U.S. Policy Toward Cyprus: Looking Forward

Thank you very much for the invitation to speak tonight. It is a great pleasure to be with you, representatives of the American business community. After more than two years as the U.S. Ambassador, I have found my work in the business field to be among my most satisfying endeavors.

Due to your hard work, Cyprus and the United States enjoy solid commercial relations, which I hope we can advance further. Dozens of U.S. companies are represented here, including new ones set up over the past two years.

As the U.S. Ambassador, nothing pleases me more than to see the success of American business, services and products. CyABA is a good partner in this effort. The U.S. Embassy, and especially our commercial section, is at your disposal.

Let me also say we were very pleased to participate in CyABA's workshop last spring on Intellectual Property Rights (IPR). In the knowledge-based economy that Cyprus seeks to develop, strong IPR protection, including meaningful and deterrent enforcement against piracy and counterfeiting, is critical to promoting the creativity and innovation of local entrepreneurs. There is much work to be done here as elsewhere. A recent survey by the Business Software Alliance ranked Cyprus 21^st out of 25 EU members in terms of IPR protection.

To enhance our efforts to combat trade in counterfeit and pirated goods, President Bush has launched a new initiative called "STOP"--the "Strategy Targeting Organized Piracy." We look forward to expanding our cooperation with the business community and the government of Cyprus and the EU to strengthen IPR protection worldwide.

I have spoken in the past about new areas of cooperation that would open up as Cyprus joined both the European Union and the transatlantic partnership between the United States and Europe. Tonight I would like to update some of those issues as well as talk about the Cyprus problem.

Cyprus and U.S.-EU Cooperation

"Meeting the challenges of the 21st century," Secretary Powell has said, "rests to a large degree on a broad, strong and lasting partnership between Europe and the United States. We must work together, whether the issue is combating terrorism and weapons of mass destruction, fostering global growth and good governance, or stemming infectious diseases."

Terrorism and Proliferation

First and foremost is the challenge of terrorism and weapons of mass destruction. The events of 9/11, Madrid, Bali, Istanbul and many other cities make the urgency of this effort abundantly clear.

Cyprus has been a solid partner on this score, including steps to stem terrorist financing and good cooperation on the police front. We work closely with the government of Cyprus through mutual support for the Proliferation Security Initiative (PSI). We hope to conclude a new agreement in the near future to make our PSI cooperation more concrete. In June, the Embassy also welcomed the addition of an American export control and border security program advisor.

We must also make sure that our infrastructure underpinning commerce and travel is secure. The U.S. has worked closely with the European Union to improve the safety and security of transatlantic travel. We applaud Cyprus's efforts to increase the security of its airports, ports and ships and stand ready to assist in any way we can.

Trade and Economic Issues

By joining the transatlantic partnership, Cyprus has joined the largest economic relationship in the world. The U.S. and the EU enjoy a 2 trillion dollar trade and investment relationship that has created millions of jobs on both sides of the Atlantic. While the U.S.-EU trade relationship is strong, we are not resting on our laurels. In June we launched a process of consultations with all stakeholders--businesses, consumers, unions, etc.--on how we can make this vibrant relationship even stronger. We welcome your ideas and suggestions.

Over 97 percent of U.S.-EU trade and investment occurs without any difficulties or problems. Nevertheless, on a road with that much traffic, problems happen. When disputes do occur, we will work with EU members to ensure that differences are resolved quickly to the benefit of both our business communities.

The U.S. and Europe must work together to open global markets and expand trade and economic growth for developing and developed economies alike. A more prosperous world is a safer world. Together we have traditionally taken the lead in expanding the boundaries of development and prosperity. To continue this vital effort in the 21st century, we must push ahead on all fronts to liberalize trade globally, regionally and bilaterally. The Doha Development Round is a once-in-a-generation opportunity to liberalize trade and expand economic opportunities throughout the world. Following the successful conclusion of the July framework agreement, the Doha Round is back on track. The core negotiating groups have already begun their technical work in Geneva. We look forward to engaging Cyprus as part of the EU on these and other issues.

Foreign Policy Cooperation

Foreign policy cooperation is our third major agenda item. We must also continue to work together to help foster a secure and democratic Afghanistan and Iraq, and to accelerate the search for peace between the Palestinians and Israelis. In short there is no issue on which we do not regularly consult our European partners, including here in Nicosia. We welcome Cyprus to the transatlantic partnership and look forward to seeing Cyprus engage more fully with us, bilaterally and within the EU, to help create a safer, freer and more prosperous world.

Cyprus Problem

Cyprus, however, will not be able to achieve its full potential as a strong partner within the EU, with the U.S. or in the region as long as the Cyprus problem persists, causing Cyprus’ energies to be focused inward.

We have just come through the most intensive UN settlement effort in the more than four-decade history of the Cyprus problem. I do not propose to revisit the heated, at times misleading, debate about the Annan Plan. Out of respect for the hundreds of thousands of Cypriots who embraced it as their future, I don’t think it is helpful to hammer away at the plan’s perceived shortcomings in an effort to further demonize it or even bury it. Similarly, out of respect for the hundreds of thousands who voted against the plan, I don’t think it is productive either to ignore areas that caused concern.

The time for heated debate has passed. This is a time for more objective reflection and feasible proposals on the way forward.

The plan is, of necessity, a compromise. The question is not whether it is a good plan or bad plan. The question is how to move forward with the plan. A majority of Turkish Cypriots approved it, and Mr. Talat regularly reiterates their continuing commitment to this solution. President Papadopoulos has made clear that Greek Cypriots will seek a solution within its framework, parameters and philosophy, even though a majority voted against it. Last June, in fact, he told an American audience in Boston, "Our position should not be mistaken or misunderstood: We do not "reject" the Annan Plan. We still believe it is a good basis for an eventual solution." Finally, the Greek and Turkish governments also support it.

Settlement efforts, however, are stalemated. How can this stalemate be overcome? That should be the focus of reflection.

The international community cannot answer that question for Cypriots. In recent months, much has been said about the role of the international community--real or imagined. Frankly, as we have just discussed, the world has a full plate with many pressing issues. We would be delighted if Cypriots could take matters in their own hands and present the UN Security Council with a negotiated solution. Unfortunately, there is no reason to expect that any time soon.

So, we are prepared to assist settlement efforts, but proposals on next steps must come from Nicosia, not foreign capitals. Renewed steps toward a solution must begin with those on the island who have to grasp it, live with it and make it work.

As Under Secretary Grossman discussed recently with President Papadopoulos, the United States is committed to help, if we can, achieve a settlement, and the fundamental question you have to consider is this: Given the April 24 outcome, what will it take to have majorities on both sides vote "yes" next time? What can be done to assuage concerns of those who voted against the Annan plan, so they will vote "yes," while at the same time retaining the support of those who voted for it last April? Outsiders cannot weigh those concerns and answer those questions. We need to hear feasible answers first from Cypriots in order to assess how we might assist.

Although settlement efforts between the two leaderships are stalemated at present, the outlook is not all gloom. First and foremost, the security situation is increasingly benign. A recurrence of fighting is increasingly unlikely, according to the UN. Membership in the EU is giving Greek Cypriots a greater sense of security, which could diminish some concerns about the Annan Plan.

And there is more. We are in a new era in Europe, one whose fundamentals were defined many years ago. This era is characterized by the promise and attraction of democratic values and European unity. Walls have come down and divisions have been bridged all across Europe, as the Cold War ended and both NATO and the European Union expanded eastward. Despite turmoil surrounding some transitions, the overriding themes of this era have been cooperation over conflict, compromise over confrontation, and reconciliation over provocation.

We have seen the impact of this thinking in the eastern Mediterranean--in improved relations between Greece and Turkey, in Turkey’s drive to join the EU, and even in the unprecedented progress made toward a Cyprus solution with the recent UN initiative.

Consolidate A New Spirit

This trend has to be further consolidated on the island itself by promoting a new spirit of reconciliation, cooperation, and compromise. I see four key elements, some of which are already taking hold.

First, and most significantly, was the removal 18 months ago of restrictions that prevented contact across the Green Line. For the first time in many decades, Greek Cypriots and Turkish Cypriots have begun to get back in touch on a significant scale--almost 5 million crossings with no major inter-ethnic incidents. That’s just a beginning, but a portentous one. Individuals from different sides, in their own way, at their own pace, have met, even on disputed pieces of property, to share coffee and to begin to air issues.

It’s not an easy process, but a necessary one. Stereotypes and myths are called into question when individuals from both sides, all of whom have suffered, meet face-to-face and talk. Old friendships are being renewed and new friendships are being formed across the Green Line. Confidence in a shared future is being built. The people themselves are preparing the ground for a future solution. By showing they want to live in peace and work together, people of goodwill can make even complex plans workable.

Such contacts, over time, should help drive home the significant shift that has taken place in Turkish Cypriot political views over the past few years, symbolized by those dramatic street demonstrations in north Nicosia that caught everyone’s imagination. Both in speeches during his May visit to Washington, and in recent interviews, Mr. Talat has stated he does not want a separate, independent state, but a unified Cyprus. Similarly, contacts across the Green Line may also provide Turkish Cypriots with first-hand understanding of Greek Cypriot concerns and answer doubts whether they are prepared to share the island.

The way forward is to expand, not restrict, this contact and to give greater expression to this spirit of reconciliation. Initiatives on the part of individuals, NGOs and some political parties to expand it further are to be welcomed. Many of you in business here this evening have an opportunity--and I mean opportunity--to help accelerate the process. What better way to make peace than by making business together?

For our part, the United States will continue to encourage, as appropriate, openings for practical cooperation, as we have done over the years in many fields. There is much individuals and groups can do to cultivate habits of cooperation that will help any future settlement more quickly take effect. This is especially important for the youth who lack first-hand experience of Cyprus’ multi-cultural heritage. We stand ready to help individuals and groups on both sides get together.

Second, this new era calls for a break from past practice of viewing the Cyprus problem through a zero-sum lens: the idea that what hurts the other side must necessarily benefit my side and vice versa. Seeking to put the other side at a disadvantage neither fosters trust between the two sides nor brings them closer to a settlement. Too often what looks to the international community as an overall win-win solution is regarded with suspicion on the island as a "trap." That way of thinking must yield to a broader acknowledgement that no solution will be workable unless both sides have strong stakes in making it work.

Third, any solution to be agreed between the two sides will necessarily involve compromises, and people need to be prepared by their leaderships to accept such compromises. The spirit of modern Europe is all about democratic accommodation and tolerance. What better time than now for people to get used to some of the fundamental compromises embodied in the parameters of the Annan Plan?

I heard in April, for example, criticism of the Annan Plan that it was unfair for 200,000 Turkish Cypriots to have the same number of seats in the upper chamber of the federal legislature as 700,000 Greek Cypriots. This is the time to think those things through. In America, for example, our lower house is based on the one-man one vote principle; in the Senate, by contrast, every state has two Senators, whether you are from California with a population of 35 million or from Alaska with a population of only 600,000.

Finally, while reflection on the way forward proceeds, it is important to ease the isolation of Turkish Cypriots and promote their economic development. Such steps will enhance the prospects for an eventual settlement and reunification. Continued Turkish Cypriot acceptance of painful compromises incorporated in the Annan Plan should not be taken for granted. We will all be worse off if political forces opposing the Annan Plan regain ground in the north on the back of disappointment with the international community.

The United States is working in line with the UN Secretary General’s recommendations and in parallel with the EU. Narrowing the economic gap between north and south and bringing Turkish Cypriot laws and institutions in line with European norms will advance the goal of a settlement. We have an assessment/design team on the island now, examining how we can use our new $30.5 million assistance program for the north. Our new program seeks to advance development of SMEs, to promote needed restructuring of the financial sector, and to support infrastructure and energy. We are also exploring ways to strengthen trade ties with the United States and examining obstacles that stand in the way of possible air connections.

Some have expressed concern that support for Turkish Cypriots will further cement division by allegedly upgrading the status of the north. Our view is different. We see such support from the international community as part of a win-win approach, well within the bounds of our unchanged recognition policy. Reducing economic disparities between the two sides will enhance, not reduce, the prospects for reunification. Improving the skills, standards and procedures in the north will enhance, not reduce, the workability of a solution. Our efforts over time should help the Turkish Cypriot community better shoulder its share of the economic costs of a settlement. Our measures will help address Greek Cypriot concerns that a settlement will be disproportionately and prohibitively expensive for the Greek Cypriot side. Our measures will also bolster support within the Turkish Cypriot community to continue to back a settlement and reunification

Conclusion

At the dawn of a new millennium, with its trend toward greater integration and resolution of ethnic based conflict, a Cyprus settlement is long overdue. What a powerful signal for tolerance and reconciliation in Europe--indeed the greater Middle East and across the world--if Greek and Turkish Cypriots can resolve their differences and reunify the island. Two communities with distinct identities and different religions but sharing a small island together! A solution will enhance Cyprus’s position as a choice tourist destination and business bridge in the region. Cyprus will be better able to achieve its full potential in Europe, and in the transatlantic partnership. As we cross the threshold of this new millennium, a settlement on Cyprus is long overdue.