THE ROLE OF TRADE IN FOREIGN POLICY: CYPRUS EXAMPLE Assist. Prof. Dr. Ozan Örmeci

THE ROLE OF TRADE IN FOREIGN POLICY: CYPRUS EXAMPLE - International trade is the exchange of capital, goods, and services across international borders or territories. In most countries, such trade represents a significant share of gross domestic product (GDP). While international trade has been present throughout much of history (see Silk Road, Amber Road), its economic, social, and political importance has been on the rise in recent centuries. - In recent decades, with the effect of globalization and developing communication and transportation technologies, the international trade increased all over the world and trading agents have become significant international political actors.

THE ROLE OF TRADE IN FOREIGN POLICY: CYPRUS EXAMPLE - While the rising international trade strengthens globalization, globalization also looks for increasing international trade to surpass national boundaries. - For many thinkers, the management of economics has become more important in many countries than the management of politics in the recent years. - The relative loss of power of the states and the capital’s search for profitable markets and cheap labor, turned politics into economic administration unlike what Mao’s famous dictum, “Politics take command”.

THE ROLE OF TRADE IN FOREIGN POLICY: CYPRUS EXAMPLE - While the supremacy of economic mentality over political mentality create problems related to social justice, in some cases in could help political problems to be resolved due to increasing economic integration on problematic sides which could create “win-win” situations. - A win-win game is a game which is designed in a way that all participants can profit from it in one way or the other. In conflict resolution, a win-win strategy In conflict resolution, a win-win strategy is a conflict resolution process that aims to accommodate all disputants.

THE ROLE OF TRADE IN FOREIGN POLICY: CYPRUS EXAMPLE - In International Relations, integration theories open the door for “win-win” situations. According to Reinhard Meyers, integration requires the emergence of common norms, values and targets with the opposing sides. There are different theories about integration. 1. Functionalism: As it was advocated first by David Mitrany in “A Working Peace System” (1943), integration should start from economics since creating “win-win” situation is much more difficult in politics. However, if economic integration is achieved successfully, then political integration can also be realized. European Union can be analyzed as a functionalist project that started with European Coal and Steel Community (ECSC).

THE ROLE OF TRADE IN FOREIGN POLICY: CYPRUS EXAMPLE 2. Transactionalism: Transactionalism was developed by Karl Deutsch in the 1950s. Deutsch believed that integration could be achieved best by managing communication on different sides by establishing a common language and culture. This will lead to political and economic integration in the subsequent process. 3. Intergovernmentalism: Developed by Andrew Moravcsik, Intergovernmentalism is based on the good governance of political and economic integration by governments on the both sides. Without effective political governance, Moravscik thought integration will not be successful. This will require negotiations but also at the same time consensus.

THE ROLE OF TRADE IN FOREIGN POLICY: CYPRUS EXAMPLE 4. Supranationalism: Supranationalism claims that integration will be successful only if supranational actors are involved. This could take place in 2 different ways. One is called “institutionalism” and is based on the creation of supranational actors having more power than national actors. The other way is called “socialization” and is based on the changing identities and the emergence of new supranational identities during the integration process. The new “European” identity that was created during EU integration process over the national identities, can be used as an example here. According to Ernst Haas, this will take place due to “spill over” effects that will follow economic integration.

THE ROLE OF TRADE IN FOREIGN POLICY: CYPRUS EXAMPLE CYPRUS DISPUTE AND EAST MEDITERRNEAN ENERGY RESOURCES AS A CASE STUDY

THE ROLE OF TRADE IN FOREIGN POLICY: CYPRUS EXAMPLE - - The discovery of natural gas resources in the Eastern Mediterranean, could be used as a leverage for the solution of the Cyprus Dispute or Cyprus Problem. - - The drilling and the safe transportation of Cyprus natural gas resources may direct two neighboring political entities; TRNC and Cyprus Republic to work together and reach a consensus for the settlement. - - This cooperation may be strengthened since Israel’s newly discovered natural gas resources may also be transported from the same pipeline route.

THE ROLE OF TRADE IN FOREIGN POLICY: CYPRUS EXAMPLE

- - Since European countries are in the search of new and cheaper energy resources as well as alternatives to Russian natural gas and an American company Noble Energy is the principal actor in this process, this new process will have the support of major international actors such as USA and EU. - - Turkey and Greece, two guarantor states for the 1960 Republic, also seem supportive of this process where another guarantor the U.K. and natural gas market leader Russian Federation do not seem disturbed. - - These are all signs of potential success for economic integration that could be followed by political integration.

THE ROLE OF TRADE IN FOREIGN POLICY: CYPRUS EXAMPLE “First thing first” - - According to integration theories that I summarized (Functionalist paradigm mainly and also Supranationalism), economic integration should take place first in order to encourage and facilitate political integration later. - - A hasty political integration that is not backed up concrete and guaranteed economic interests, could be problematic and even spoil further economic and political integration. - - Thus, it might be better to solve energy problem first and then to focus on political integration.

THE ROLE OF TRADE IN FOREIGN POLICY: CYPRUS EXAMPLE “Think Big”: Mediterranean Union - - With the recent discoveries in Israel and Crete in addition to potential new energy resources in the region, it might be also possible to look to “big picture” and bring into agenda a larger Mediterranean Union that was advocated by former French President Nicolas Sarkozy in the past. - - Non-EU countries such as Turkey, Israel, Lebanon, Tunisia, Egypt, Libya, Morocco, Syria and Palestine can work on a greater project with the help of Mediterranean EU countries such as Greece, Cyprus Republic, Italy, France and Spain together.

THE ROLE OF TRADE IN FOREIGN POLICY: CYPRUS EXAMPLE “Think Big”: Mediterranean Union

THE ROLE OF TRADE IN FOREIGN POLICY: CYPRUS EXAMPLE “Think Big”: Mediterranean Union - - But for sure, this will need visionary leaders in all major countries in the Mediterranean and also leader countries to assume such role. Israel, France, Turkey and Greece could be the leading countries of such a new geopolitical design. - - Main problems for such a design for the moment are; Syrian civil war, instabilities in Libya and Egypt, Arab-Israeli conflict, Turkish-Israeli tension, Turkish-Greek disagreement and the Cyprus Dispute.